UCT Web tool drills into income inequality

Kgaogelo Letsebe
By Kgaogelo Letsebe, Portals journalist
Johannesburg, 12 Jul 2018
Economists at UCT have developed an online income comparison tool to help people understand inequality.
Economists at UCT have developed an online income comparison tool to help people understand inequality.

The University of Cape Town's Southern Africa Labour and Development Research Unit (SALDRU) has developed a Web-based income comparison tool to help South Africans explore where they are in the country's income distribution.

Professor Murray Leibbrandt, SALDRU's director, says the tool was developed to help South Africans realise the nature and extent of SA's inequality.

"We want to help citizens to visualise what income inequality looks like in the country. We want people to be able to locate themselves in the income distribution and see how their income compares to other South Africans.

"If anything, because inequality is such a big part of people's lived reality every minute of every day, some of its most distinctive features appear to have been internalised and normalised in society."

SA, in recent years, has developed a reputation of having the highest income inequality in the world. A 2017 Poverty Trends in SA report from Statistics SA showed this is not far from the truth as it revealed that a quarter of SA's population (13.8 million people) live below the food poverty line, and 55.5% (30.4 million people) live below the upper bound poverty line.

The report further indicates that in the past few years, three million people have joined the ranks of the impoverished, with four-fifths of the rural population living below the poverty line; almost double the rate of poverty in the metros.

"A lot of South Africans are oblivious to the extent of inequality at present. There is a tendency for South Africans to keep discussions about inequality at a comfortable distance from themselves and their daily lives.

"By making the story about the person who interacts with the tool, we hope that every South African who engages with it will reflect on where they fit in the bigger picture and consider what role, if any, they may play in changing the status quo," says Leibbrandt.

How it works

Once logged on, the tool will ask a few questions relating to household income after tax as well as family size, and then plot the provided info on a graph in comparison to other households.

"The tool does not use artificial intelligence or algorithms. We have used a simple script to develop a program that interfaces with a database that hosts the information about incomes in SA. The tool is intended for personal use and understanding, and we won't be collecting or saving the information submitted."

He explains that through the tool, SALDRU is able to demonstrate that a large share of local income goes to the top 10% of households in the country. "When you get to the results page on the tool, you are able to examine each percentile bar on the graph from 1-100 to see what the per capita income is for every bar on the graph. For example, 50% of individuals in South African households have an income of R1 149 or less per month. This shows that half of our population is chronically poor.

"Despite our familiarity with the data, plotting SA's income inequality on a graph and seeing what the disparity actually looks like is shocking even for us. The point about drilling into the data is to allow citizens to reflect on the texture of our society and how it works to distort the potential of our citizens in many ways. Middle-class South Africans may be surprised to see how privileged they are compared to the rest of the population."

Apartheid legacy

The World Bank Group Systematic Country Diagnostic for South Africa, released earlier this year, explored key development challenges and opportunities for the country, and identified constraints to tackling poverty and inequality. The report suggests inequality challenges in the country are linked to its long history of exclusion.

Paul Noumba Um, World Bank country director for SA, explains: "The government of SA has done much to address its most pressing development challenges, the triple challenge of high unemployment, poverty and inequality, but much still remains to be done.

"The persistent legacy of exclusion makes it difficult to build the post-apartheid social contract, resulting in contestation over resources, and undermining investment and economic growth as well as financial, fiscal and external sustainability."

Government is currently implementing Vision 2030 in the National Development Plan, a blueprint for how the country can eliminate poverty and reduce inequality by the year 2030.