South African racial transformation starting – but painfully slowly

Next year will mark the 20th anniversary of South Africa’s transition from white minority rule to democracy, and the latest indicators are that when it comes to this whole transformation project, we’re getting there. We’re just getting there really, really slowly.

This piece of uncharacteristically upbeat news is brought to you courtesy of theSouth African Institute of Race Relations, whose latest report looks at the status and economic performance of black people over the last two decades. “The widely-held notion that racial transformation in South Africa has failed is not true,” the report notes, while qualifying this with the reminder that much remains to be done, in a press release optimistically entitled Racial transformation not ‘complete failure’.

Here’s the kind of stuff they’re talking about. The number of employed black people has doubled since 1994. There are almost three times more black, coloured and Indian business owners than there are white business owners. Black people who own cars have doubled over the past eight years alone. 5.8m black households own their own property – although this does include the provision of housing from the state in some cases.

But the picture looks substantially less rosy when outcomes for black South Africans and white South Africans are directly compared. One of the reasons why there is still a chasm of difference between white per capita income and black per capita income is because of the percentage of black people who aren’t working or have given up looking for work which sits, at its most expanded estimate, at 42%.

Nonetheless, in 1994, for every employed black person there were 4.9 unemployed. Today there are 3.3. This is possible despite the rising unemployment rate, the institute explains, because total employment has increased and birth rates are dropping. White people are also better off in this regard; 1994 saw 2.2 jobless white folk for every white person with a job, and now that’s down to 1.4.

One of the survey’s important findings is that if the income gap between white South Africans and black South Africans is to be reduced, the key will be reducing unemployment rather than just “equalising earnings”. Things are equalizing, but painfully slowly. In 2005, the average monthly earnings for white people were more than five times more than the average monthly earnings for black people. In 2011, whites earned four times more. But it’s unemployment that’s the real kicker here. To quote the report: “Rising earnings among Africans relative to whites (and the roll-out of social grants to mostly African recipients) has not been enough to counteract the effect rising unemployment has had on African income relative to white.”

When it comes to social grants, their dispensation between 2001 and 2012 has more than quadrupled. But they are working: poverty dropped 11% on average between 1996 and 2011. Speaking to Business Day late last month, however, the deputy CEO of the institute, Frans Cronje warned that the country’s reliance on welfare was unsustainable. “Consider that there are more people in South Africa on welfare than people who work,” he said. “The alternative to a welfare system is job creation.”

Though more black people have jobs, they’re not necessarily very good ones. At the higher echelons of the workforce in particular paint a sombre picture. In 2000, black people made up just 6% of top management. Thirteen years down the line it’s just 12%, with whites still holding on to 73% of those roles. A tier down, in senior management, black people are slightly better represented at 18%, but whites still dominate disproportionately at 62%.

Similarly, though black people are leading the way in business ownership (69%), it’s not clear exactly what type of businesses these are, since the black dominance doesn’t translate into representation on the Johannesburg Stock Exchange, where only 17% of businesses are black-owned. (Thirty-one percent of businesses listed on the JSE are foreign-owned.)

Stats focusing specifically on the legal profession suggest that recent discussions about transformation in this sector are much needed, with just 16% of the Bar being black in 2012 (and only 4% and 8% respectively being coloured and Indian). Advocate Izak Smuts suggested in an address in Cape Town this week that – to cite a running theme in the report – education is critical in levelling this field. But more positively, transformation in the judiciary is progressing much quicker, with white judges in the minority at 38%.

When it comes to education, degrees awarded to black students outstrip those awarded to white students, though by a far, far slimmer margin than should be the case (1.7 to 1).

One of the most dramatic stats has to do with cellphone ownership. The rise in numbers of black adults who own a cellphone has been dramatic: from 26% in 2004 to 84% in 2012. But although many more South Africans are using cellphones, the findings for internet usage are rather surprising. Based on asking respondents whether they had used the internet during the last month, only 18% of black people and 57% of white people answered in yes.

While the figures show that in general, black people are moving out of poverty, they also show that black people have less time to do this. Life expectancy for black people is on the rise since its greatest dip in 2005, but the impact of HIV/Aids means that it is still lower than it was in the late 80s.

In a statement accompanying the report, researcher Lerato Moloi writes that turning around the existing “glaring racial inequalities” exposed by the figures will depend on “the three Es – education, entrepreneurship and economic growth”. Progress in the future, Moloi suggests, “may therefore come to depend less on racial policies like Black Economic Empowerment and more on ensuring access to sound education while fostering a climate conducive to economic growth”.