Tuesday, June 3, 2014

Poverty Statistics

The country has made significant progress in reducing grinding poverty and hunger through a combination of social grants and dramatically improved incomes, pulling millions "above the line".  This is according to a Statistics SA (Stats SA) poverty trends analysis. The study shows that the percentage of South Africans living below a poverty line of R620 a month per person declined from 57% in 2006 to 46% in 2011. However, despite this success, large numbers of people — 23-million — still live in deprivation with incomes lower than the line used in the analysis.

The poverty trends report draws on information Stats South Africa collected in its living conditions, and income and expenditure surveys. The data show both the success of government programmes and the long road ahead for poverty elimination.  The study uses an "upper-bound" poverty line of R620, defined as the "the level of relative deprivation below which people cannot afford the minimum desired lifestyle".  A lower-level line of R321, described as the food poverty line, below which a person cannot afford to buy enough for their daily energy intake, also shows significant improvement over the five-year period. It shows the proportion of people in absolute deprivation falling from 27% to 20%.

But 10.2-million South Africans still fall below the lower-level line.  Further, the five-year period under review includes the global financial crisis and recession during which more people fell into extreme poverty. This was reversed shortly afterwards and, at an overall level, by 2011 poverty levels had declined despite the effects of the crisis.  The key factors responsible for reduced poverty levels, according to Stats SA, are the expanding social safety net; real income growth above inflation wage increases; and decelerating inflationary pressures on households. In addition, there was an expansion of credit and growth in formal housing.

The number of people receiving social grants has grown from 2.6-million in 1997 to 16.6-million in 2012. In the five years under review, the number of grant recipients jumped 46%.  The expansion of credit — unsecured lending doubled over the period — and growth in incomes also contributed significantly to lowering poverty levels. Incomes grew 16.7% in real terms over the period.  The biggest gains went to middle-income earners, where income growth was 34.5%.

According to Stats SA, social grants were responsible for reducing "self-reported hunger" dramatically. While an estimated 13.4-million people experienced going to bed hungry in 2002, by 2011 this had dropped to 6.6-million.  Further, the poverty trends report shows a small improvement in inequality levels — with income inequality, measured by the Gini coefficient, declining from 0.72 in 2006 to 0.69 in 2011.

National Research Foundation chair in poverty and inequality research at the University of Cape Town Murray Leibbrandt said the report largely echoed other social surveys, with small differences.  "The mild decline in our very high inequality, along with the more substantial declines in multidimensional poverty and income poverty, are in line with the existing work on South African poverty and inequality.  "The same is true of the resilience of real incomes over this period of the recession. The reported magnitude of the decline in the numbers of income poor is a little larger than other available estimates."

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source :  Stats SA

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