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An overview of poverty and inequality in South Africa - Working Paper prepared for DFID (SA)
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6. Why is there poverty and inequality in South Africa?
Past policies of segregation and discrimination have left a legacy of inequality and poverty and, in more recent decades, low economic growth. The apartheid system was heavily biased towards providing health, education and housing services to the white minority, to the detriment of the black population who were denied the opportunity to accumulate human and physical capital. Labour market policies were aimed at protecting the position of white workers through active policies such as job reservation, while inferior education, influx control and the Group Areas Act ensured little competition from other race groups. Apartheid also unequally distributed resources (including land, mining rights and access to capital) thereby marginalizing a large sector of the population to menial and poorly paid sectors of the labour market, if granting access at all.
The massive investment in state education for white schoolchildren in the 1950s and 1960s resulted in white workers securing the skills that enabled them, in the 1970s and 1980s to command high incomes without the need for policies such as job reservation [15]. Restrictive past economic practices thus prevented much of the population from vertical mobility within the labour market, leading to a skewed income distribution which was in turn reinforced by an unequal distribution of skills and training.
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