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  • Populism will not fix problems of economy

    Tuesday, February 21, 2017

    Issues of poverty, unemployment and inequality threaten the fundamentals of South Africa’s democracy.

    Fast facts:

    • In late 2016 researchers convened to discuss the Research Project on Employment, Income Distribution and Inclusive Growth (REDI3x3), a three-year national project initiated by the Treasury to fill in key gaps in the evidence base in support of inclusive growth.
    • A major question sparked by this research is how to make growth more inclusive, but this is difficult to answer when it has barely nudged above 0.5% in the past year.
    • Research by Martin Wittenberg of the University of Cape Town (UCT) shows that earnings at the top end have increased faster than earnings at the bottom. Earnings in the middle, though, have stagnated.
    • Research by Arden Finn, Murray Leibbrandt and Vimal Ranchhod estimates that if your parents are poor, the chances of your being poor are 90%.
    • About 10% of the population owns 95% of the wealth. This profile, combined with youth unemployment of about 50%, is a recipe for anger and frustration.
    • Social grants, which now sustain more than 17-million people, have done much to alleviate poverty.
    • Personal income tax is the government’s largest source of revenue, yet only about 7-million people earn enough to pay income tax.
    • Only 4% of those who enter school are likely to get a tertiary degree — and most of those students attended former model C or private schools.
    • More than 80% of jobs are created in companies that employ 50 or more people.
    • People who live in urban areas and earn the least use up to 40% of their income to pay for transport because they live far from their work, researcher Andrew Kerr has found.

    Source: Business Day: Opinion, Murray Leibbrandt and Pippa Green, 09 February 2017

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