Cecil John Rhodes and SA’s 1%ers

Cecil John Rhodes – businessman, mining magnate, politician, colonialist and subject of transformative debate. Also, not surprisingly, one very rich South African.

In 1907, five years following a fatal heart-attack at his Muizenberg home, the British-born Rhodes’ estate would eventually be valued at an impressive £3,345,000, a figure that even today would leave a twinkle in any SARS representative’s eye . Take into account a hundred years of inflation, however, and the contemporary value of Rhodes’ fortune rapidly inflates to a statue toppling £307 million, or R5.5 billion* at the current exchange rate. Although not quite enough to secure the colonial fat cat the distinguished honour of being the country’s richest person it is enough to ensure a respectable 19th spot on the SA richest list just behind Raymond Ackerman, best known for being the only billionaire ever to have been fired by Checkers.

“Cecil John Rhodes’ fortune would have been worth R5.5 billion in 2015”

Rhodes’ R5.5 billion would have been enough to treat every one of 53 million South Africans to a whole, deliciously prepared, chicken from Nandos – a considerable purchase when taking into account that 10.7 million people are currently living under the food poverty line of R11 a day and are barely able to afford even a daily dipping sauce (R10.90) from the providers of periperi poultry. It is this massive gulf between the tiny club of wealthy few and the destitute masses that has earned the South Africa story the tragic sub-title of the most unequal country in the world in terms of income distribution.

In 2012, American resentment regarding unequal income distribution popularised the term onepercenter –  a derogatory title reserved for the richest percentile of Americans. The extraordinary wealth of the onepercenters were exposed to illustrate the massive imbalance between the top earners and the rest, the 99%, whose earnings were minute in comparison. In the states, the average annual income of the top 1 percent was R8.6 million* in 2012. The interesting question is: how many millions of Rands do the top 1% of South Africans earn per year?  The disappointing answer is: none. At least not to qualify as the top 1%.

In South Africa, according to data on monthly earnings from STATSSA (adjusted for inflation), one  need only earn R24 390 per month* (R292 680 per year) in 2015 to qualify as being in the top one percent of all South Africans in terms of monthly income (more accurately 1,3% – the nature of the data made it difficult to identify a value closer to 1%). Naturally most earners in the fields of engineering, financial services, and Information Technology are able to surpass this 1,3% income threshold quite comfortably, even at the junior level, according to available data, but it is interesting to note that also a skilled senior artisan and/or draughtsman could eventually break the prestigious R25 000p/m salary barrier  needed to join the earning elite.

“If you earn more than R25 000 per month in 2015 then you earn more than 98.7% of South Africa”

To illustrate the relatively small size of this 1% group, imagine that these top 647 550 fortunate individuals, all earning in excess of R24 390 p/m, could comfortably be seated in as few as 7 Soccer City stadiums –  presumably watching Bafana nearly win 7 excruciating times. If one of them were to emigrate every second then it would only take about a week for the current group of onepercenters to bolster the ranks of the lower middle class in Australia, earning less than an 21 year old employee at Mcdonalds*.

“Every South African earning more than R24 390 per month in 2015 could be comfortably seated in 7 Soccer City stadiums”

So if you are lucky enough to be earning R24 390 or more per month in SA then remember that you are part of the income earning elite, and that statistically for every 100 people that you walk or drive past on your daily commute to your fancy high-paying job, only one of those will earn more than you.Earnings

 

 

 


* Data Calculations

Rhode’s R5.5 billion – Being nearly impossible to any reliable information on South African inflation data before 1960 there is thankfully a very good website that is able to calculate the effect of inflation all the way back to the 1205. Although limited to British pounds, thankfully so was Rhode’s early fortunate. The result of that calculation was the multiplied by the current exchange rate of R18.07 / 1 GBP (22 April 2015) resulting in the R5.5 billion figure.

American average income of 1%ers of R8.6 million  – Simply take the $717,000 presented in this Forbes article and mulitply by the current exchange rate of R12.27/$1 (22 April 2015).

1,3% threshold for South African income earners at R24 390This article from STATSSA states that in 2012 your needed no more than R18 900 to qualify as the top 5% of 12 951 000 income earners in South Africa. That top 5% translates to 647 550 people (12 951 000 * 5%). Those 647 550 are actually only 1,3% of the whole South African population (53 million). Therefore in 2012 one needed only R18 900 to qualify as the top 1,3% of ALL South Africans in terms of money earned per month. Using this handy inflation calculator we can change the R18 900 to the R24 690 used in the article, adjusted for inflation from 2012 to 2015.

Monthly wage of a 21 year old Australian Mcdonalds employee – This article states that Mcdonalds Australia has signed an agreement to pay an employee older than 21 years an average monthly salary of $2781.64. Converted to Rands at the current exchange rate of R9.5/$1Aus (22 April 2015) equals R26421.51 per month.

 

 

 

 

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