Staying up

2014-07-01 12:00

For people who have managed to claw their way into the middle class, dropping out of it again is a much easier process. A recent article in the FT Weekend titled “The Fragile Middle: Rising inequality in Africa weighs on new consumers” reveals that this is not just a South African problem.

In the article, it was estimated that as many as “a?billion people in the developing world are at risk of slipping out of the nascent middle class and back into poverty if economic growth slows”.

A large, stable middle class is a critical component of any economy, buying the goods and services that keep economies buoyant and fuel growth. South

Africa has seen a major shift into the middle class, driven primarily by black South Africans.

But where the “old” (mainly white) middle class has developed over several generations, Futurefact finds that 60% of black South Africans in the middle class are the first generation to achieve this status.

The pressure on them is relentless: two-thirds say they are paying for things they didn’t pay for previously (like education and medical care) and are supporting relatives – substantially reducing their disposable income and ability to purchase goods and services for themselves.

As a result, 38% say they often don’t have money to pay their bills.

For this first-generation middle class, the distance between where they are now and where they’ve come from is frighteningly narrow. It is too easy to fail and get swallowed back.

If the main income earner dies or is retrenched, the family’s lifestyle could vanish, leaving them with a lot of debt and the anguish of removing kids from good schools, and falling back on the state health and education systems.

Reinstatement would depend on finding that elusive high-paying job.

The FT article notes the “fragility” of middle-class status, which is highly dependent on staying employed in an environment where there are very limited employment opportunities.

It quotes Mthuli Ncube, the chief economist at the African Development Bank, who states that a move into Africa’s (or South Africa’s) new middle-class is not one way, but “a revolving door”.

Yet we don’t have a totally gloomy picture here: Futurefact also shows that those in the first-generation middle class are still positive and optimistic.

The optimism that enabled them to make the leap into the middle class is clearly visible in their view that “it is possible to start out poor in this country, work hard and become rich” (84%).

In consumer terms, they tend to be brand and status conscious but not excessively so. Most feel their standard of living is better than that of their parents even though only 48% believe the same will apply to their own children.

Just more than half (52%) acknowledge they have more spending money than previously and that their families are still doing better financially and managing to save some money.

The majority claim they are cautious about getting into debt, preferring to save for the things they want and that they are aware of the need to save and invest for the future.

Interestingly, “tokenism” holds little appeal for them in the workplace and on sports fields – they believe it should be the most qualified person who gets a job or a position in a sports team, though almost three-quarters feel they have personally benefited from affirmative action, which “needs to continue for several years more”.

Their confidence in the future is palpable and they find it exciting to live in a time of so much change. On the technology front, three quarters say they are much more confident in their ability to use technology such as that on their cellphones or computers.

Their significant uptake of smartphones has enabled them to leapfrog in their access to the internet and social media.

Thus, one of South Africa’s many challenges is a need to keep this positive first-generation middle class inside that revolving door to ensure they “stay up” and grow.

In this way, they will help bridge the inequality gap that threatens our economic growth and prosperity.

Futurefact has been surveying the attitudes and beliefs of South Africans since 1998. The findings presented above are from Futurefact 2013, which is based on a probability sample of 3?025 adults aged 15 years and older, living in communities of more than 500 people throughout South Africa and representing 21.6?million adults

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