Black middle class expansion may slow
South Africa’s black middle class is now as large as the white middle class but further growth will be difficult.
There has been a considerable growth in South Africa’s black middle class, which has now approached the size of the white middle class. Yet, warning signs should flicker as only economic growth, and not the expansion of the civil service can maintain this growth.
This is the finding of the Institute for Race Relations (IRR) latest report on the size, growth, and likely future expansion of South Africa’s middle class. The report relied in indicators ranging from household spending levels, to workplace seniority, educational levels, medical insurance cover, internet usage, property ownership, banking patterns, and appliance ownership.
The report concluded that at most 2 in 10 South Africans could lay claim to a middle class standard of living.
Yet, despite the small size of this middle class there has been significant growth in the size of the black middle class and can now lay claim to be as large as the white middle class. However, the IRR warned that as the first generation middle class the black middle class was very vulnerable to losing their status as a result of developments such as a sharp economic downturn or a period of rapidly rising interest rates.
The report also warned that the depressed domestic economic environment would put the brakes of any significant future middle class expansion. In addition the fiscal crisis meant that the size of the civil service could not be extended as a black middle class incubator – a role it has played quite successfully over the past 20 years.
The report found that any significant future middle class expansion would depend on South Africa securing an economic growth turnaround. The IRR warned that such a turnaround was unlikely in the current domestic policy climate.
According to the IRR’s CEO, Dr. Frans Cronjé, creating a policy environment in which any child born in South Africa might realistically aspire to reach middle class standard of living should be the single most important priority for any South African government. “The apartheid era government denied such aspirations to a majority of the country’s people. The post-1994 government has done better but too many areas of policy still undermine the educational outcomes, entrepreneurship, and investment driven growth that is so important to unlocking access to the middle classes.
“That a child might aspire to a middle class standard of living should be seen as moral as well as a social, economic, and political imperative. There is no doubt that under the government’s current policy framework this imperative is not being met,” he said.
