Johannesburg - French economist Thomas Piketty yesterday said a wealth tax and minimum wage could begin to ameliorate South Africa’s sky-high wealth gap. His book, Capital in the Twenty-First Century, has recalibrated the global discussion on inequality.
The 44-year-old is the youngest world thinker to deliver the annual Nelson Mandela Foundation lecture, which was held yesterday – the second lecture after the death of the revolutionary, statesman and icon two years ago.
The auditorium at the University of Johannesburg’s Soweto campus was packed to the rafters. Former deputy president Kgalema Motlanthe, Gauteng Premier David Makhura and former finance minister Trevor Manuel attended the lecture. Professor Njabulo Ndebele, who chairs the foundation, hosted the event.
Members of the public, many economists and activists were also in attendance. So was musician Sipho “Hotstix” Mabuse, who ended the lecture by inviting Piketty to dance as he played up a storm.
“South Africa has an unusually high level of inequality,” said Piketty.
The top 10% of South Africa’s wealthiest citizens earn between 60% and 65% of the total pie. He attributed this to unemployment and the cost of transport. He said that South Africa’s inequalities were still highly racialised.
The democratic era had seen income inequalities rise, he said. A national minimum wage, now under consideration, would avoid extreme exploitation but was not the panacea to inequality. Dealing it a death blow would require better and more effective public health and education systems. The economist also said the first generation of black economic empowerment had not been very successful at redistributing wealth.
In his lecture, he called for an annual wealth tax, greater transparency in corporate finances and tax probity, employee share ownership and for worker representatives to hold seats on company boards.