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The “revolving door” and SA’s first generation middle class

(First published in City Press Voices, Sunday 30 June 2014)

For people who have managed to claw their way into the middle class, dropping out of it again is a much easier process. A recent article in the FT Weekend on Inequality in Africa (19/20 April 2014) reveals that this is not just a South African problem – they estimate that as many as “1 billion people in the developing world are at risk of slipping out of the nascent middle class and back into poverty if economic growth slows”.

A large, stable middle class is a critical component of any economy, buying the goods and services that keep economies buoyant and fuel growth. South Africa has seen a major shift into the middle class driven primarily by black South Africans. However, where the ‘old’ (mainly white) middle class has developed over several generations, futurefact finds that six out of ten black South Africans are the first generation to achieve this status. But the pressure on them is relentless: two thirds say they are paying for things they didn’t pay for previously (like education and medical care) and are helping to support family and relatives – substantially reducing their disposable income and ability to purchase goods and services for themselves. As a result, 38% say that they often don’t have money to pay their accounts and bills.

For this first generation middle class the distance between where they are now and where they’ve come from is frighteningly narrow. It is too easy to fail and get swallowed back. If the main income earner dies or is retrenched then the family’s lifestyle may vanish, leaving them with a lot of debt (bonds, HP on motor vehicles etc.) and the anguish of removing kids from good schools and falling back on the state health and education systems. Reinstatement would depend on finding that elusive high-paying job.

The FT article talks about the “fragility” of middle-class status which is highly dependent on keeping employed in an environment where there are very limited employment opportunities. It quotes Mthuli Ncube, chief economist at the African Development Bank who states that a move into Africa’s (or South Africa’s) new middle-class is not one-way but “a revolving door”.

Yet we don’t have a totally gloomy picture here: futurefact also shows that those in the first generation middle class are still positive and optimistic. The optimism that enabled them to make the leap into the middle class is clearly visible in their view that: “It is possible to start out poor in this country, work hard and become rich” (84%). In consumer terms they tend to be brand and status conscious but not excessively so. Most feel that their standard of living is better than that of their parents even though only 48% believe that the same will apply to their own children. 52% acknowledge they have more spending money than previously and that their families are still doing better financially and managing to save some money. The majority claim they are cautious about getting into debt, preferring to save for the things they want and that they are aware of the need to save and invest for the future.

Interestingly ‘tokenism’ holds little appeal for them on the job and sports field fronts - they believe it should be the most qualified person who gets a job or a position in a sports team, though almost three-quarters feel they have personally benefited from affirmative action which “needs to continue for several years more”. Their confidence in the future is palpable and they find it exciting to live in a time of so much change. On the technology front three quarters say they are much more confident in their ability to use technology such as that on their cell phones or computers. Their significant uptake in smartphones has enabled them to leap-frog ahead in their access to the internet and social media.

Thus one of South Africa’s many challenges is a need to keep this positive first generation middle-class inside that revolving door, to ensure they ‘Stay-Up’ and grow. In this way they will help to bridge the inequality gap that threatens our economic growth and prosperity.