Meet South Africa’s new rich: young, black, self-employed, and on their way to the top.
South Africa is among the world’s most unequal countries in terms of income distribution, and the gulf between rich and poor has only widened since apartheid ended two decades ago.
But researchers have found a surprising change in the racial composition of the country’s wealthiest few: while a white minority still dominates the economy, there is an unexpectedly fast-growing number of wealthy black South Africans.
A study of South Africa’s richest 10 per cent -- once almost exclusively white -- found that today nearly 40 per cent are black, according to the University of Cape Town’s Unilever Institute of Strategic Marketing and RamsayMedia.
While only 29 per cent of the absolute wealthiest South Africans are black, this jumps to 50 per cent among the “entry-level” rich, according to the survey, which classifies the wealthy newcomers as those earning $4,000 a month and up, a relatively significant amount in a still-developing country.
Being young, entrepreneurial and having some post-secondary education appears to be the recipe for getting rich in the new South Africa, according to researchers. The study found that about 70 per cent of wealthy South Africans are between the ages of 25 and 49.
“In our changing society, rich people are actually younger than we think they are,” said professor John Simpson, director of the Cape Town institute.
South Africa’s new rich are keenly aware of where they came from, with this reflected in consumer habits and financial support for friends and family. They understand the risk of “falling backwards,” the study found.
Ten percent live in the townships -- unheard of in previous decades, and evidence of both family connections and the improving circumstances in some townships such as Soweto, Mr. Simpson explains.
Entry-level white South Africans are twice as likely as their black counterparts to view themselves as “not being very well off.”
Like the newly wealthy anywhere, South Africa’s entry-level rich tend to display status through the brands they buy.
“They acquire status possessions and consume conspicuously,” says Martin Neethling, a South African marketing expert.
And their numbers are growing fast, with members of South Africa’s top tax bracket increasing by 25 percent over the last four years.
Another surprise finding was a major difference in perceptions of customer service in South African shops and restaurants. Wealthy white South Africans felt that service is generally poor, and levels of service are declining. Black South Africans were far more likely to rate customer service as generally good, and to say that service levels have improved.