Apartheid, the Job Ladder, and the Evolutionary Hypothesis: Empirical Evidence from South African Manufacturing, 1960-1977

Abstract

Culture and custom, increasingly reinforced since 1948 by official policy, have created in South Africa a dualistic labor market and a highly inequitable income distribution. Behind the middling figure for South Africa's GDP per capita (US $1,550)' stand two very different groups. The white minority-educated, skilled, and privileged-has attained a standard of living comparable to that of Western Europe and North America; meanwhile, the nonwhite peoples live at standards comparable to the rest of less developed Africa.2 Precise estimates of the degree of income disparity are of course much disputed, but the figures in table I give a rough picture.3 In 1970, white workers in industry earned nearly seven times as much, on average, as nonwhites; and this multiple had increased over the period 1950-70. The ratio of white to nonwhite earnings fell dramatically in the 1970s, but it was still more than four in 1977. Moreover, almost all the income accruing to entrepreneurial activity, capital, and land was earned by the white minority. Despite the faster of the nonwhite population in South Africa, its share of the total income showed relative constancy over 1925-70; only in the past decade have some seen rapid growth in this share.4 But by other estimates, the nonwhite living standard has continued to fall even in the 1970s.5 This inequity of income and opportunity is well known, and most of the people of the world are agreed that reduction in this inequity is desirable. What divides people, both inside of and outside of South Africa, is the question of what sorts of policies would mitigate most effectively the economic inequities of apartheid. One group calls for radical intervention; the other envisions an ongoing endogenous process that will gradually erode the economic excesses of apartheid with-