Economist explains why whites earn more | Fin24
White people earning six times more than blacks, screamed the headlines after the release of the 2011 census.
I do not doubt that whites earn more than blacks – although in a way it is too simplistic to state it as such.
The 2011 census provides several reasons why white households earn six times more than black households.
One can explore the reason in two parts. Firstly on an individual basis where whites earn on average about four times more than their fellow black South Africans. The second part has to do with household dynamics and why it is that White households – again on average – earn six times more as households than black household do.
There is also more to this than the article allows for.
What would be really interesting would be to compare what and black earnings are at the toip and middle management level.
I know of at least one instance where a white person, who was earning a very good salary, left, and was replaced by a black person, who demanded, and got, a salary a third higher than his white predecessor, simply because he was black, not because he was better qualified.
The difference in pay could have funded three entry-level positions for young people, most, or all of whom would probably have been black.
Now this is just one example, and I’m not sure how widespread this is, but economists somewhere perhaps have figures to show what is actually happening.
But I have a suspicion that because of BEE, there is a greater demand for black people in middle and top management than there is for white people, and by the law of supply and demand that means that black people can command higher salaries at that level for the same job.
And that is why BEE is not Black Economic Empowerment, but Black Elite Enrichment, because if the black guy had been satisfied with the same salary as his white counterpart, three more young people could have been employed.
We don’t need a youth wage subsidy, we need less greed in top management.
The problem is not primarily one of race, although that may play a part. It is primarily one of class.