This article is focused on the following UN Sustainable Development Goal:
The concept of reducing inequalities can be boiled down to the government’s ability and willingness to intervene to reduce poverty by using the tax benefits system. This can be achieved after a long and tedious process of employing a progressive tax benefits system, which takes more money from those with a higher income, as opposed to lower-class citizens.
This being said, it is important to note that currently, South Africa has the highest measured rate of inequality on the planet, even though it has a fairly progressive system of taxation, wherein taxation can range from 18%-43% of the annual income, depending on how much someone earns. In theory, this should mean that South Africa would have a fairly low inequality rate, but that is simply not the case. This is because although progressive taxation/ social transfers can help reduce inequality, more has to be done before the issue is solved entirely.
In South Africa, the main form of inequality present is wealth inequality. Even still, there are lots of forms of inequality present, such as racism, sexism, and homophobia. The gender pay gap is a problem in South Africa, too. The key to overcoming inequality lies in equalising the salaries of workers and their wages, too. The expansion of social grants has had a strong equalising effect in the country, but this effect has been offset by the much bigger role that earnings inequality plays. Inequality in labour income has by far the largest effect on aggregate inequality.
Currently, most economic gains go to South Africa's top 5% of earners.
Between 1993 and 2014, there was a large increase in the earnings per household. Despite this, inequality in the household labour market remained incredibly high. Due to this, most people reached the conclusion that the best way to reduce inequality is to reduce the inequality in wages. There is, however, another way to reduce inequalities alongside this method.
“Levelling the playing field at birth through expanding coverage of quality education, health, and basic services to disadvantaged populations in the SACU region is critical to reducing inequality and breaking the intergenerational cycle of poverty,” said Marie Francoise Marie-Nelly, World Bank Country Director for Botswana, Eswatini, Lesotho, Namibia, and South Africa. In recent years, it has become clear that lack of access to assets such as education, skills and housing is halting progress to a more equitable nation.
Wealth inequality is also ridiculously high, with the top 5% of earners in South Africa getting the most economic benefits.
“To accelerate inequality reduction, SACU countries can build on what they are already doing well with the same resources through improving the efficiency and effectiveness of social spending,” said Pierella Paci, World Bank Practice Manager of the Poverty and Equity Global Practice for Eastern and Southern Africa. Thus, we need to encourage South Africa to reduce its inequalities amongst it's citizens to create a better place for all.
Remember, change starts with you.
World Bank Group (2022) In Southern Africa, leveling the playing field at birth critical to reducing inequality, intergenerational poverty, World Bank. World Bank Group. Available at: https://www.worldbank.org/en/region/afr/publication/in-southern-africa-leveling-the-playing-field-at-birth-critical-to-reducing-inequality-intergenerational-poverty (Accessed: December 13, 2022).
Reducing inequalities in South Africa (2021) UNU. Available at: https://www.wider.unu.edu/publication/reducing-inequalities-south-africa (Accessed: December 13, 2022).
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