KZN middle class in job squeeze

2010-11-13 00:00

THE financial fortunes of unemployed lower middle-class residents in KwaZulu-Natal hang in the balance. Their chances of finding jobs have steadily diminished during the recession, increasing the risk that they will be forced to “integrate their lives backwards” by selling off key assets such as property and vehicles.

This is according to Professor Carel van Aardt, research director in the income and expenditure research division of the Bureau of Market Research at Unisa.

Van Aardt told Weekend Witness that the levels of wealth accumulation during the boom years between 2002 and 2007 have kept many KZN lower middle-income families afloat.

“People are holding on to their assets, such as houses, but their ability to spend has been severely inhibited. If they do not find jobs in good time, they will be forced to integrate their lives backwards.”

The latest statistics show that KwaZulu-Natal lost more than 35 000 jobs between July and September this year.

KZN’s unemployment rate is now 19,7% and 563 000 count themselves among the ranks of discouraged job seekers.

Van Aardt this week released the bureau’s annual personal income estimates in South Africa for 2010.

One of the most interesting statistics to emerge is that the more than five million people in KZN who fall into the R0 to R50 000 per annum income category collectively earn less than the 68 834 people who fall into the R500 000 + income category.

Van Aardt said income inequality in KZN continued to increase in 2010, partly as a result of the recession. He added that many black middle-class earners lost their jobs during the recession. There is still a high concentration of wealth in urban areas, particularly the eThekwini region.

“The migration to urban centres like Durban is more permanent. Families are settling in these centres as opposed to individuals settling there.” KZN’s total personal income represents about 16,1% of the national total.

“The higher-income groups experienced much higher levels of growth than the middle-income groups during 2009 to 2010, thus showing that the recession had a particularly severe impact on the growth of the emerging middle class in South Africa,” the report said.

Van Aardt stressed that people with higher education levels have a much better chance of securing jobs.

“Labour demand is becoming more and more knowledge-intensive. Many people in KZN between the R100 000 and R300 000 per annum income range will remain unemployed for some time.

Although the R0 to R50 000 income group are the most vulnerable group, the R50 000 to R300 000 income group has been hardest hit by the recession,” Van Aardt told Weekend Witness.

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