Beyond the Inequality Debate, Education Makes the Difference

2015-01-07 07:49

By Vivian Atud,

Johannesburg- Every year, Statistics South Africa conducts in-depth surveys on the South African labour force, (Labour Force Survey), income, economic spending, standard of living and poverty, education, deaths and other variables for South African consumers. According to the most recent publication on inequality- the gap between the rich and the poor in South Africa continue to increase.

Figure 1: Employed and Unemployed South Africans 2008-2014

Source: Stats SA

According to table one, there has been a slide increase in the levels of unemployment in South Africa since 2008. Over five million of the population are currently unemployed conservatively speaking. There are currently an estimated 15 million people working in the country which is less than half the potential working population of over 35million. The majority of workers, low income earners and unemployed remain predominantly blacks .

Figure 2: South African Average Household Incomes by Race 1996-2010

Figure two shows two important trends both incomes and inequality have increased over the years. While this may not come as a surprise to many of you, there is one statistic that is worth exploring – the role of education in this divide. According to the quarter labour force survey report by Stats SA, 77% of the unemployed have less than matric, 20% have matric and less than 3% have tertiary qualification

While cost of tertiary eductaion remain high in the country, there are significant benefits to changing the inequality story.

It is not surprising that students and parents have become more conscious of this fact as we can see the increases in student loans. The department of higher education on its part has also increased student funding to try and bridge this gap. Despite the increase in cost of higher education in the country-the benefits far outweigh the cost.

Despite the cost of tertiary education increasing over the years in South Africa, the value of a post matric degree in reducing inequality in the country far outweighs the cost.

Vivian Atud is an Economist at Atud and Associates and Market Analyst at Sunburst Africa. Contact me at follow me on twiter #Vivian Atud,

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