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Why do Whites earn more?

31 October 2012, 23:36

As you’re aware, South Africa has just published the results of its 3rd census after attaining democracy in 1994. The census provides mostly grim reading – not that we need a census to evaluate the state of our nation and her people. The one statistic that has seemed to cause quite a bit of stir is that white South Africans earn six times that of black South Africans.

This statistic is obviously an eye-opener, however, it would be irresponsible of us to make a comment on this statistic without viewing it in context. Hence, what follows is a dissection of why whites are earning 6 times more than their black counterparts.

To begin, the statistic in question: the average white household earns R365 134 per annum while the average black household earns R60 613. If you do the math, on average, whites earn 5.8 times more than blacks.

Now, for the perspective.

A major determinant of income is the education and the qualification attained by an individual. This is a fact. A newly qualified doctor/lawyer/accountant is going to earn more than a nurse/manual labourer. To push this even further, an educated person will out earn an uneducated person. Therefore, let’s look at the education statistics provided by Census 2011.

The following statistics apply to those who are 20 years or older. To start, 10.5% of blacks have no schooling compared to that of 0.6% of white people. Only 35.2% of black people have completed high school compared to 76% of white people completing high school. However, perhaps the most damning of statistic is that of higher education.

Amongst black people, 8.3% have achieved higher education compared to 36.5% of white people. Obviously, there are multiple reasons for the above statistics such as Apartheid and poor delivery service amongst education. However, the underlying reasons of the statistics are of no relevance in this analysis.

Level of Education

White

Black

No Schooling

0.6%

10.5%

Some Primary

1.3%

13.9%

Completed Primary

0.7%

4.9%

Some Secondary

21.4%

35.5%

Completed Secondary

39.5%

26.9%

Higher

36.5%

8.3%

Let’s now consider unemployment. Those unemployed are guaranteed to earn less than those employed. As per Census 2011, 46.3% of black are unemployed compared to only 10.2% of whites being unemployed.

Therefore, it’s impossible to look at the statistic and merely say that the average black person will earn 6 times less than the average white person. There are lots of variables in play, the most pertinent being level of education and employment. Hence, the “6 times” statistic is heavily skewed by the underlying issues in our country: education and unemployment. 

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