Middle class growing in KZN

2009-01-15 00:00

A new report on income distribution patterns in South Africa has disclosed that although 79,2% of adults in KwaZulu-Natal receive an income of less than R50 000 a year, the province’s aspiring middle class is growing.

The report on personal income, published by the Bureau of Market Research (BMR) at the University of South Africa (Unisa), covers mid-2007 to mid-2008.

Co-author Professor Carel van Aardt told The Witness that provinces with major urban centres continue to create income opportunities.

During the period, the number of KZN adults in the R50 000-R100 000 a year category grew by 14,6%, compared with growth nationally in this category of 10,1%.

The number of KZN adults in the R100 000-R300 000 category also grew by 14,6% (SA: 11,4%), while growth in the R300 000-R500 000 category came in at 19,4% (SA: 25,1%). About 18,4% of KZN adults now fall in the R50 000-R300 000 category.

The 79,2% of KZN adults with incomes below R50 000 compares with about 61% in Gauteng and the Western Cape.

Many of these people receive social grants, noted Van Aardt, who is a population economist.

He said KZN has several challenges, such as the high HIV/Aids rate and the consistent exodus of professionals to Gauteng.

In addition, KZN is a recipient of smaller government capital investment projects compared with Gauteng and the Western Cape.

Local economist Kwanele Gumbi told The Witness that KZN lags behind Gauteng and the Western Cape in affluence levels.

“KZN still has more people, I would argue, in rural areas than any other province. There are more people who are not covered — who merely live a subsistence lifestyle.”

Group economist at Ithala Development Finance Corporation Dana Moore told The Witness that on the whole, the trends are encouraging.

“The income distribution pattern in KZN is less skew than for South Africa … and experience has shown that a more even distribution of income can contribute to a more sustained and stable pattern of growth in the medium to long term,” Moore said.

However, emphasis should be placed on increasing the number of adults in the middle-income group in KZN (R100 000-R300 000).

“In this regard, efforts to stimulate and support SMEs [small and medium enterprises] in KZN should be improved and accelerated.”

Gumbi and Van Aardt said skills development in KZN is a key area of concern. “The most skilled labour hopefully … will improve productivity and in turn improve profitability. The better the people are skilled, the more money they will likely command,” Gumbi said.

kavith@witness.co.za

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