The Narrowing of Wage Differentials in South Africa

Nattrass, Jill

doi:10.1111/j.1813-6982.1977.tb00537.x

Cited by 15 publications

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“…This anomalous situation simply makes the rich richer and the poor poorer. The trend towards greater equality of incomes evident during the 1970s (Nattrass, 1977) will certainly be reversed. It is difficult to visualise how such a result can be reconciled with the stated aims of sanctions, if indeed we are to take them at face value.…”

Section: Resultsmentioning

confidence: 99%

On Income Distribution and Economic Sanctions

Cooper

1989

South African J Economics

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1) ALTHOUGH numerous individuals and organisations have voiced opinions about the impact of economic sanctions on the distribution of in-come in South Africa, there has to date been no attempt to frame the arguments in a theoretical model of any rigour. The purpose of this paper is to present the outline of one possible means of analysis that can be fruit-fully employed to investigate this aspect of the sanctions problem. The approach employed is based on the orthodox neoclassical trade theorem developed by Stolper and Samuelson (1949) in the Heckscher-Ohlin tradition. The appropriateness of using this approach to examine the South African pattern of trade in manufactures and also her overall trade pattern has been examined theoretically and empirically by Holden (1981), Holden (1983) and Roque (1984) who all find support for the explanatory powers of the Hecksher-Ohlin model, albeit in extended form. According to Holden (1984) the empirical findings reported by Ariovich (1980) which repudiate the applicability of this model to South African conditions, do not constitute a satisfactory test of it. Nevertheless, the Stolper-Samuelson theorem does not depend on the validity of the Hecksher-Ohlin theorem. It only depends on how the marginal productivities of the factors are affected, for which incomplete specialisation and different factor intensities are the sole requirements (Chacholiades, 1978). Thus Stolper and Samuelson themselves argue that: 'It does not follow that our results stand and fall with the Hecksher-Ohlin theorem ' (1941, p. 72). As long as there is a fairly consistent relationship between factor prices and marginal products, the theorem is likely to be a good predictor of income redistribution, irrespective of whether the Hecksher-Ohlin theorem holds or not. The standard argument in favour of economic sanctions is that a weakened economy will reduce the absolute income of capital more than labour, which, given the highly unequal distribution of income, has little to lose anyway. In other words, the impact of sanctions is expected to fall most heavily on capital. This isbelieved to be desirable on the grounds that capitalists control the pace of political reform in South Africa. According to this line of reasoning, the pace of reform will be speeded up by reducing profits. But, on the basis of orthodox trade theory, it is not clear why sanctions should imply any loss of income to capital at all. Contrary to popular belief, economic theory predicts that the position of capital is likely to be strengthened, not weakened, by sanctions. If politicians are indeed manipulated by capitalists, the effect of sanctions will be to slow down, not speed up, the pace of political change, whilst making the income distribution in South Africa more unequal still.

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Section: Resultsmentioning

confidence: 99%

On Income Distribution and Economic Sanctions

Cooper

1989

South African J Economics

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“…Despite the faster growth of the non-white population in South Africa, its share of the total income showed "relative constancy" over 1925-70; only in the past decade have some seen "rapid growth" in this share (McGrath, 1977;Nattrass, 1977). But by other estimates, the non-white living standard has continued to fall even in the 1970s (Rogers, 1976).…”

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confidence: 99%

Apartheid, the Job Ladder, and the Evolutionary Hypothesis: Empirical Evidence from South African Manufacturing, 1960-1977

Porter¹

1984

Economic Development and Cultural Change

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This paper explores various conceptions of the South African "evolutionary hypothesis", whereby non-white economic opportunities are perceived as rising over time as a result of innate market forces. It then develops in detail one of these conceptions, whereby the scarcity of white labor induces a gradual switchover of jobs from whites to non-whites, permitting the latter to move up the "job ladder". The evidence from South African manufacturing over 1960-1977 is then examined. This evidence is largely consistent with the jobs ladder view, but only a small part of the growth of non-white employment in manufacturing can be attributed to such switchovers of white jobs to non-whites. RESUME Ce document explore diffirentes opinions relatives a "l'hypothese 6volutionniste" sud-africaine voulant que les opportunitis &conomiques offertes a d'autres qu'aux blancs soient pergues comme dtant en hausse au Cur et a mesure que le temps passe, ceci en reponse aux pressions innees du march6. Apres cet expose initial, le rapport precede au developpement ddtaill6 de l'une de ces opinions. Celle-ci avance que la raret6 de la main-d'oeuvre blanche entraine le deplacement graduel de la demande pour les blancs vers les gens de couleur, permettant a ceux-ci de gravir "les echelons de l'emploi". Des donndes sur 1'industrie sud-africaine de 1960 a 1977 sont ensuite offertes en guise de preuves a l'appui. Elles semblent parfaitment soutenir la these de 1' chelle du travail. Et pourtant, seulement une petite proportion de la croissance de l'offre d'emplois pour gens de couleur dans le secteur industriel peut Stre attribuee a un tel revirement de situation.

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