Increases in poverty in South Africa, 1999–2002

Abstract

Analysis of the results in the 1999 October Household Survey and the 2002 Labour Force Survey suggests that the number of people in the bottom two expenditure classes (R0–R399 and R400–R799 per household per month) increased by about 4,2 million over the period. As the boundaries of these expenditure classes remained constant in nominal terms, there is a likelihood that the number of people in poverty will have increased as well. This article attempts to discover whether this is indeed the case. The possible increase in the number of people in poverty is not equal to the increase in the number of people in these two expenditure categories. Rather, it is equal to the difference between the numbers of people in poverty in the two years. Our first crude estimate of the maximum potential number of ‘new’ poor suggests that it could be as high as 4,5 million. This estimate, which excludes any adjustments for possible underreporting of expenditure, child cost economies and household economies of scale, and the ‘social wage’, is whittled down as we attempt to make the relevant allowances. Responding to claims that poverty is increasing in the country, the government has pointed to a failure to consider the contribution of the social wage to the alleviation of poverty. Accordingly, we have also attempted to estimate the impact of the social wage.

Notes

Respectively, Research Fellow, School of Development Studies; and Lecturer, Division of Economics, both of the University of Natal, Durban, South Africa. We are grateful for helpful comments made by the discussant of our paper, David Fryer of Rhodes University, to Nicoli Nattrass of the University of Cape Town, to Ingrid Woolard of the Human Sciences Research Council (HSRC) and to Michael Noble of the Centre for the Analysis of South African Social Policy (CASASP) at the University of Oxford. Thanks are due as well to colleagues and friends who attended a seminar in the School of Development Studies at the University of Natal, where we test‐flew the pre‐conference version of the article. The usual disclaimer applies – the remaining errors are all our own.

The newspaper article in question, which dismisses free water as a ‘sham’, is based on a recent Master's dissertation. The researcher found that although municipalities had water tariff structures that allowed poor households six kilolitres free of charge, in practice, municipalities such as eThekwini still charged for the first six kilolitres (R27,41). Commenting on this, Msunduzi's manager of water and sanitation said ‘most municipalities could not afford to implement the government’s free water policy'.

The figure comes from work conducted on the informal sector by a colleague in the School of Economics at the University of Natal, Colette Muller, to whom our thanks are due.

To estimate standard errors, we used the routine produced by Charles Simkins at the behest of the Statistics Council and the HSRC Employment Dynamics Committee.

Additional information

Notes on contributors

Rosa Dias