W(h)ither the whites? - City Press, 19th May 2013.

May 20, 2013
The 1994 transition liberated black South Africans from oppression, but also liberated whites, writes Frans Cronje.

Many whites argue they had a tough time after the 1994 transition, as equity and empowerment policies ensured economic opportunities were closed off to them.

Others argue that poverty and unemployment figures have risen sharply within the white population.

The SA Institute of Race Relations has published data that shows the truth is very different.

Following the transition, 75% of whites in the country had a matric qualification and just 10% had any higher education.

But by 2012, almost all white children were passing matric while 60% of those aged 20 to 24 were enrolled for higher education.

The comparative figures are that fewer than 50% of black children are going on to pass matric and only 14% of those aged 20 to 24 are currently enrolled for higher education.

This despite the fact that the white share of total tertiary enrolment has dropped from roughly 40% to 20% since 1994, while the black share has increased to 65%.

Between 1994 and 2012, the rate of unemployment among white people increased from 3% to 5.7%.

While this is a significant increase, the actual rate remains remarkably low by national standards. For example, in 2012, 29% of black South Africans were unemployed. Black people were therefore five times more likely to be unemployed.

The white unemployment rate was low, even when compared to a host of international benchmarks. In the US, for example, the rate in 2012 was 7.6%, in Britain 7.9% and in Canada 7.2%.

At first glance, these low levels of white unemployment stand at odds with the white exodus from the civil service and the shifting employment equity profiles of large corporations.

This paradox is best explained by the renowned historian, Professor Hermann Giliomee, who notes in his book, The Afrikaners: “In 1994, 75% of the white population earning over R500 000 per year were formally employed, receiving salaries and bonuses.

“By 2009, this figure had been completely reversed and 75% of whites in this income category were self-employed, either as owners of a business or as consultants or agents.”

The point of whites turning to entrepreneurship can be further reinforced by data that suggests that, while a black university graduate is more likely than a white graduate to find a job within 12 months of graduation, white graduates are four times more likely to start and operate businesses.

It is important to note, however, that only 10% of white adults fell into the R500 000-plus-and-above income bracket in 2009, while 50% were estimated to receive an income of less than R100 000 annually.

With increasing levels of education, high levels of entrepreneurship, and low levels of unemployment, it must follow that white poverty levels are low. South Africa has no official poverty line.

We therefore take a monthly household-income level of less than R5 000 as a benchmark of relative poverty. Using this benchmark, the proportion of white South Africans living in poverty declined from approximately 2% in 1994 to less than 1% in 2012.

The figures for black South Africans were significantly higher, having declined from about 50% in 1994 to 45% by 2012.

This despite the fact that the roll-out of taxpayer-funded welfare grants to more than 15 million mainly black South Africans saw the extent of desperate poverty, measured at $2 (R18.50) a day, decline from a peak of 17% in 2002 to 5% in 2010.

With such high education, employment and poverty differentials evident, high income differentials must be expected.

The most striking way to point out such inequality is to measure how many cents a black South African is likely to receive in income for every rand received by his white compatriot.

In 1994, on a per capita basis, black South Africans could expect to receive approximately 12 cents for every rand received by a white South African. In 2012, almost 20 years into our democracy, black South Africans were receiving only 13 cents for every rand received by white people.

Here it must be explained that the key driver of such continued inequality is not white wealth but, rather, abysmal education and labour-market outcomes for black South Africans.

We estimate that, on current trends, only 40% of black South African children are set to pass matric, and only 4% are set to pass maths in matric.

Likewise, the labour market absorption rate, which measures what share of the working-age population is employed, has fallen sharply for black South Africans since 1994 and now sits at just 36%.

The indicators cited in this article force two new conclusions about the white experience since democracy.

Firstly, whites have seen their education profile improve rapidly since apartheid ended and are today four times more likely to be in higher education than their black compatriots, who receive an appallingly poor standard of schooling.

Secondly, employment equity and empowerment policies have not driven whites into unemployment or poverty on a significant scale. Whites resident in South Africa are more likely to be employed than residents of the world’s leading economies.

While history will record that the 1994 transition liberated blacks from oppression, it is an important footnote of history that whites were also liberated.

They were liberated, first, from the guilt and pariah status that had been attached to their support and enforcement of apartheid.

They were freed from the failing economy they had brought about in which low growth was ironically curtailing improvements in their own living standards.

They were also unburdened from any sense that the state would look after their interests.

Herein lies one of the great paradoxes to emerge from the 1994 transition: as the focus of government policy turned to drive black economic advancement, so the whites were driven into entrepreneurship, which today explains their continued relative economic prosperity.

First published in City Press on 19th May 2013.

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