South Africa’s inequality shame mirrors the world’s, and may yet explode: Dirk Hartford

Key topics:Youth uprisings are driven by deepening global socio-economic inequalityExtreme wealth gaps show CEOs earning hundreds to thousands times workersTechno-feudalism and AI risk worsening inequality without systemic reform.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Dirk Hartford.Scratch slightly below the surface of issues driving recent uprisings around the globe - in Madagascar, Nepal, Kenya, Angola, Morocco, Indonesia, Bangladesh and the Philippines for example - and you find socio-economic inequality.Inequality is the single biggest issue driving often youth led resistance to the status quo. Youth resistance is so often the precursor of things to come because in their idealism and hope for a better future, youth feel inequality acutely and have nothing materially to lose like their parents.Truly, who can deny that the richest 1% on earth (or Mars if you will) live on an entirely different planet to the 99%Recently the world’s richest man South African Elon Musk struck a performance related deal with just one of his companies Tesla that might make him a trillion dollars in ten years time. That represents nearly 1% of the wealth of the entire planet currently.Forget about 1 person, 1 vote and think about 1 person out of 8.2 billion people on the planet owning one hundredth of the world’s wealth from just one of his companies.Something's got to give eventually surely. The Greek economist and former Finance Minister Yanis Varoufakis calls the mode of production we are living in techno-feudalism. Where digital lords control cloud fiefdoms to extract value from cloud serfs.Whatever we want to call it, it conjures up Marx’s horrific image of capitalism over 150 years ago of “dead and living bodies chained together”.Small wonder that there are poor people who would prefer slavery to unemployment. Like some poor people prefer jail to freedom. At least the slave master needs to look after the slave instead of being left to fare for themselves.Trump is the world leader par excellence of the 1% and do they know it. Witness their fawning and obsequiousness in America and the Middle East especially where global wealth is concentrated..Since coming to office this “pro worker” President - Trump hung a giant portrait of himself over the Dept of labour building saying “American Workers First” - has, according to ex US Labour Secretary Robert Reich, stripped over 1m federal workers of collective bargaining rights and reversed Biden’s minimum wage hike for federal workers amongst a host of anti labour actions.Getting more down to earth, let's look at the big picture of inequality in the formal economy in the US.In the 100 lowest-paying major US companies, CEO pay averaged $17.2m in 2024. Median worker pay at these companies was $35,570. A ratio of 632 to 1.At Starbucks, which is busy slashing jobs in the US (at least 2000 this year alone), the CEO’s pay is 6,666 times the median employee. It's obscene for sure - it's the widest gap of any company on the S&P500.Closer to home, where we have the dubious reputation of having the worst gini coefficient in the world, 0.01% of South Africans (3500 people) own 15% of the country’s wealth, according to a recent report of Open Secrets.0.1%, who are mainly white of course, own 25% of all the country’s wealth. Make of it what you will.For its part, the government is trying to put its finger in the dyke through a minimum wage policy for employed workers.It's up for review next year and currently stands at R5610 per month for a 45 hour week. Expectations are that it will increase by R30 an hour next year.Research done by Active Shareholder, who regard a socially responsible ratio of CEO pay to the minimum wage as 60:1, assessed 73 companies in 2023 and found that the average CEO remuneration was 700:1.BHP Billiton’s CEO was nearly 5000 times the minimum wage; Caxton 85 times; Absa 129 times; Mondi 3821 times. Vodacom was flagged as having a positive correlation while MTN and Sasol were strongly negative.It's clearly wild out there with the minimum being regulated and the maximum being a free for all.What to do, especially with AI about to upset this whole applecart dramatically ? Can’t imagine a way out without permanent revolt and instability short of a basic living income grant for the 99% myself.

South Africa’s inequality shame mirrors the world’s, and may yet explode: Dirk Hartford

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