A message posted on Facebook claims that “50% of South Africans are chronically poor”. It was posted on 16 September 2020 with a screenshot that makes the same claim.
The screenshot also lists the distribution of wage income in the country – from the 10% who “have an income of R345 a month” to the 1% of “highest earners” with a monthly salary of R48,753 or more.
The screenshot’s figures are sure to have raised some eyebrows. And Facebook’s fact-checking system has flagged the post as possibly false. The claims, however, are true.
A Google search reveals that the screenshot is of a 2019 article by “good news” site Good Things Guy. The article discusses a comparison tool that helps people see how income is distributed in South Africa, and lists figures from the tool.
Developed by the Southern Africa Labour and Development Research Unit (Saldru) at the University of Cape Town, the income comparison tool can tell you where you place in South Africa’s income distribution and how you compare to the rest of the population.
How does this work?
You’re first asked to enter your monthly household income after tax and the number of people living in your household. You’re then asked to indicate on a sliding scale, where from poorest to richest you think you fit. The results are then presented in a graph that highlights where you thought you would be and where you actually are. Saldru says most people are wrong about where they think they are located.
For example, if your household income is R10,000 a month after tax and you live with one other person, only 15% of South African households have an income higher than yours.
If your household income is R20,000 a month after tax, and you live with two other people, only 10% of South African households have an income higher than yours.
Saldru’s research also found that 50% of South Africans were “chronically poor”. Only 20% of South Africans belong to the “stable middle class”; 4% belong to the “elite”.
The claims in the Facebook post are therefore correct.
The income comparison tool is based on survey data from the National Income Dynamics Study (Nids) – a panel study carried out every two years since 2008 on the same 28,000 South Africans selected to represent the population.
Participants are asked questions on a range of topics, from health and education to labour market participation and economic activity.
By surveying the same people each time, the study is able to directly compare the state of individuals from one period to the next. It can therefore tell us who is getting ahead, who is falling behind, and why.
But the data has limitations. For example, when it comes to measuring people’s wealth, surveys such as Nids struggle to collect data from all groups of people in the correct proportions. As a 2013 study by the European Central Bank found, wealthier households are more difficult to contact and less likely to respond.
“Another thing to be aware of is that many formal sector workers don't separate between the different types of their deductions in calculating net pay,” Vimal Ranchhod, chief research officer at Saldru, previously told Africa Check. Payslip deductions can include health insurance and pension fund contributions.
If we are interested in income after tax, these should be added to take home pay. “But most people don't do that and usually don't even know how much [their deductions are] when they're responding to surveys,” Ranchhod said. – Africa Check
The screenshot also lists the distribution of wage income in the country – from the 10% who “have an income of R345 a month” to the 1% of “highest earners” with a monthly salary of R48,753 or more.
The screenshot’s figures are sure to have raised some eyebrows. And Facebook’s fact-checking system has flagged the post as possibly false. The claims, however, are true.
Income distribution in South Africa
A Google search reveals that the screenshot is of a 2019 article by “good news” site Good Things Guy. The article discusses a comparison tool that helps people see how income is distributed in South Africa, and lists figures from the tool.
Developed by the Southern Africa Labour and Development Research Unit (Saldru) at the University of Cape Town, the income comparison tool can tell you where you place in South Africa’s income distribution and how you compare to the rest of the population.
How does this work?
You’re first asked to enter your monthly household income after tax and the number of people living in your household. You’re then asked to indicate on a sliding scale, where from poorest to richest you think you fit. The results are then presented in a graph that highlights where you thought you would be and where you actually are. Saldru says most people are wrong about where they think they are located.
For example, if your household income is R10,000 a month after tax and you live with one other person, only 15% of South African households have an income higher than yours.
If your household income is R20,000 a month after tax, and you live with two other people, only 10% of South African households have an income higher than yours.
Saldru’s research also found that 50% of South Africans were “chronically poor”. Only 20% of South Africans belong to the “stable middle class”; 4% belong to the “elite”.
The claims in the Facebook post are therefore correct.
How reliable is the tool?
The income comparison tool is based on survey data from the National Income Dynamics Study (Nids) – a panel study carried out every two years since 2008 on the same 28,000 South Africans selected to represent the population.
Participants are asked questions on a range of topics, from health and education to labour market participation and economic activity.
By surveying the same people each time, the study is able to directly compare the state of individuals from one period to the next. It can therefore tell us who is getting ahead, who is falling behind, and why.
But the data has limitations. For example, when it comes to measuring people’s wealth, surveys such as Nids struggle to collect data from all groups of people in the correct proportions. As a 2013 study by the European Central Bank found, wealthier households are more difficult to contact and less likely to respond.
“Another thing to be aware of is that many formal sector workers don't separate between the different types of their deductions in calculating net pay,” Vimal Ranchhod, chief research officer at Saldru, previously told Africa Check. Payslip deductions can include health insurance and pension fund contributions.
If we are interested in income after tax, these should be added to take home pay. “But most people don't do that and usually don't even know how much [their deductions are] when they're responding to surveys,” Ranchhod said. – Africa Check
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