Social income in South Africa, an economy marred by high unemployment, poverty and extreme inequality

Abstract

Disagreements in South Africa over what has happened to the severity of poverty and, less prominently, inequality, have served to stimulate debate about the social wage. Although government has made much of the few pieces of research on the question of the impact of the social wage on poverty, the truth is that, given the extreme difficulties of measurement, not much reliance can be placed on existing attempts anywhere to value the social wage. The paper offers an approach which, although it cannot cope with the big-ticket social wage expenditures (health, education and housing), could at least render income poverty estimates less vulnerable to the charge of neglecting all effects of social spending on people's welfare.