Economic growth fattens pay cheques

JOHANNESBURG – The number of working adults in South Africa earning more than N$750 000 a year has increased by 52,1 per cent to 187 000 since 2007, compared with 25,8 per cent growth to 253 000 in the N$550 000-N$750 000 income group.

The figures are the result of income and expenditure research by the Bureau of Market Research (BMR), an independent think-tank attached to the University of South Africa.
The N$100 000-N$300 000 bracket recorded an 11,4 per cent increase to 3,3 million. The expected sharp decline in the number of adults earning less than N$50 000 did not materialise: this bracket shrunk a mere 0,8 per cent to 23,3 million.
The data showed that the already more affluent part of the population was becoming wealthier, while the proportion of low-income people joining the ranks of the affluent was minimal.
‘The picture, however, shows without question the widening economic gap between the rich and the poor. The Gini coefficient is at 0,67 per cent and is still rising,’ Professor Carel van Aardt, the research director at BMR’s income and expenditure division said.
A Gini coefficient of zero corresponds to perfect equality, with everyone in a population having the same income, and one corresponds to perfect inequality, where one person has all the income and everyone else has no income.
He said the earnings increases were the result of economic growth, job creation and the rise in entrepreneurship in the formal sector.
Van Aardt said: ‘Economic growth had given rise to job creation, educational attainment employment, equity policies and practices in formal sector entrepreneurship.’
He pointed out that growth in income was concentrated in Gauteng, KwaZulu-Natal and the Western Cape.
‘In these provinces there are higher levels of economic activity resulting in job creation that needed higher skills levels, and the levels of formal entrepreneurial skills were higher in these provinces, compared to the other six.’ – Business Report