Fighting Poverty: Labour Markets and Inequality in South Africa (review)

Bhorat et al's book, Fighting Poverty, represents a timely and welcome contribution to the burgeoning literature documenting the extent and nature of poverty and inequality in South Africa that has emerged over the past decade. Its publication occurs at a time when there is much public concern over the rising incidence, depth and severity of poverty. This is evident at the level of the state, as indicated by the government's commitment to eradicating poverty and underdevelopment by means of, for example, its commitment to the Millennium Development Goals and the New Partnership for Africa's Development (NEPAD). It is also a critical issue amongst civil society, as reflected by the Speak Out on Poverty Hearings (1998) and the War on Poverty declaration. It is also worthwhile mentioning that the book's release comes on the eve of the 20^th anniversary of the Second Carnegie Inquiry into Poverty and Development, which in the words of the authors themselves represented 'a daunting benchmark of the mountain that had to be climbed' (2001:15), especially in terms of the enormity of the country's poverty and inequality challenge. The book's focus on the intersections between labour markets, poverty and inequality is also germane given rising unemployment trends and the continued decline in formal sector employment growth in spite of government's anti-poverty strategies, including the Poverty Alleviation Fund, Integrated Rural Development Programme and Public Works Programmes (Department of Social Development 2002, Aliber 2002).

This book, which is based on a collection of working papers (some of which were published elsewhere earlier), provides an excellent account of the relationship between poverty, inequality and labour markets in South Africa. The study's genesis dates back to the African Economic Research Consortium's (AERC) training workshop on Poverty, Inequality and Labour Markets held in Kampala in August 1997. The country study, which was jointly funded by the AERC and the South African Department of Labour, partly involved the twinning of the research team with an international researcher and university, in this instance Gary Fields of Cornell University. This collaboration exposed the authors to a range of eminent labour and development economists, which resulted in an awareness of the limitations of the South African literature and the prospects for the application of various 'new' techniques. The circumstances surrounding the book's creation and publication has meant that it has an appeal not only to students and academics interested in the field being studied, but that it also has immediate relevance to policy makers.

The overarching purpose of the book is to:

make a contribution to the analysis of poverty and inequality in South Africa by addressing four major issues that are pertinent to this policy milieu, namely: household inequality and poverty; vulnerability in the South African labour market; labour market participation and household poverty; and labour market and social policy interventions.

(2001:16)

The structure of the book is arranged according to these four research themes. The initial section, comprising Chapters 1 and 2, attempts to develop a deeper understanding of the nature of household-level inequality, with specific reference to the labour market, and construct a profile of poverty in contemporary South Africa. In so doing, the authors have sought to complement existing descriptive research on poverty and inequality with a clear but methodologically rigorous approach. This is achieved partly by applying recently developed techniques in poverty and inequality decomposition analysis to several nationally representative data sets. For instance, in the inequality chapter, various categorical decomposition techniques (Theil-T, Theil-L and Atkinson measure) are employed, allowing for an in-depth exploration of the racial dimensions of South African inequality, in particular the relative importance of inequality between the different race groups on the one hand and inequality within race groups on the other. The authors additionally conduct income source analysis, a form of decomposition analysis that exposes the income sources that dominate [End Page...