Poverty hits SA children

A new OECD working paper on trends in poverty and income inequality in South Africa has found that more than half of all South Africans (54%) are poor but, among children below 10, as many as two out of three are poor.

"This implies that among all poor South Africans, one in three is a child," said the OECD in the report that was released on Thursday.

These high values are based on the national poverty line of 515 rand a month, or about US$ 4 a day, which is used for national policy making.

International comparisons of lower-income countries often use the World Bank poverty line which is US$2 a day.

Under this lower line, the aggregate poverty rate in South Africa is 30% but if the standard OECD poverty line, which is below half the average income, the poverty rate is 26%.

"That said, under all poverty thresholds, younger children have a disproportionally high risk," said the OECD.

The report, which is the first analysis based on the most recent information on incomes available, for the year 2008, indicated that South Africa's high aggregate levels of income inequality and income poverty did not decrease between 1993 and 2008.

According to some estimates, aggregate inequality even slightly increased.

"Income inequality in South Africa now is at a significantly higher level than in Brazil, one of the former 'inequality world champions'," OECD said.

Inequality between racial groups decreased, especially during the 1990s.

This did, however, not lead to a decrease in the aggregate because inequality within population groups increased, especially among Africans, the report found.

"Poverty has increased, especially in urban areas. On the other hand, there have been continuous improvements in non-monetary well-being - access to piped water, electricity and formal housing - over the entire post-apartheid period up to 2008," said OECD.

Key issues that arise from the report's findings included the fact that intra-African inequality and poverty trends increasingly dominate aggregate inequality and poverty in South Africa.

"Race-based redistribution may therefore become less effective over time relative to policies addressing increasing inequality within each racial group and especially within the African group," suggested the OECD.

Also, rising inequality within the labour market - higher unemployment and greater wage inequality - lies behind the increased levels of aggregate inequality.

"These labour market trends have prevented work from playing a more positive role in reducing poverty," the organisation said.

It also said social assistance grants - the child support grant, the disability grant and the old-age pension - alter the levels of inequality only marginally but have been crucial in reducing poverty among the poorest households.

OECD said there are still a large number of families that are ineligible for grants because of the lack of appropriate documents.