Legacies of Apartheid - Economic Inequality and Black Economic Empowerment

Economic Inequality and Black Economic Empowerment

Many of the inequalities created and maintained by apartheid still remain in South Africa. The country has one of the most unequal income distribution patterns in the world: approximately 60% of the population earns less than R42,000 per annum (about US$7,000), whereas 2.2% of the population has an income exceeding R360,000 per annum (about US$50,000). Poverty in South Africa is still largely defined by skin colour, with black people constituting the poorest layer. Despite the ANC government having implemented a policy of Black Economic Empowerment (BEE), blacks make up over 90% of the country's poor at the same time they are 79.5% of the population.

Part of the policy of Black Economic Empowerment is the imposition of 'employment equity' targets. In terms of this, companies are assessed based on their racial composition. To attain the 'correct' racial balance in a company, the Employment Equity Act allows for legal discrimination against White males and to a lesser extent White females when appointing staff. Government contracts and a few in the private sector are also preferentially awarded to companies with good BEE ratings. In September 2006 the Labour Ministry ordered private companies to classify their employees according to race. The classification was to be done based on a form that every employee had to complete, which used the apartheid-era racial categories. On the form the employee had to confirm whether they regarded themselves as White, Indian, Coloured or African. This caused some controversy and some employees refused to classify themselves saying it was a return to the race classification system of the Apartheid era. In such cases employers were forced in terms of the Employment Equity Act to do a classification based on the general appearance of those employees who refused to classify themselves.