If you earn more than you need to spend to survive, you can buy property, vehicles, investment funds and have insurance policies; you are able to turn your income into investment and protect it. You have adequate resources to advance your economic status.
The ‘working poor’ spend their productive time in jobs that don’t pay them enough to build wealth. They only receive enough to survive on, not investment.
Income Inequality: How your job makes you poor
Income inequality refers to the gap between the well-off and the less well-off.
Some people in the economy get paid much lower wages than others, such as wages paid to ordinary workers and those paid to CEOs. Some people are paid less because they are black. Some women are paid less than male colleagues.
According to Oxfam’s ‘Inequality Report: An economy for the 99% in SA’, quoted in the Business Day, the richest 1% of the South African population has 42% of the total wealth.
In fact, inequality is so bad in South Africa that our economy is described as ‘broken.’
“Such inequality is a sign of a broken economy, from global to local, and lack of will from government to change the status quo,” executive director Sipho Mthathi said. “Governments including the South African government, can act to help everyone, not just those at the top.
The poor are not only the unemployed. When you earn minimal wages, your job is a poverty trap allowing you to earn enough to survive on, but not enough to secure financial security.
The working poor are dependent on low-income jobs as they lack the financial resources to see them through the tough times. Work conditions may prevent them from looking for other jobs as they don’t have the resources and time. They are stuck and dependent on a system that disadvantages them daily.
The 1% keeps the ‘poor’ poor by paying them just enough to survive on but not enough to build savings and negotiate or select their income.
‘Poor’ includes being deprived of information for economic decision-making, such as which interviews are financially worth attending.
Have you noticed how this decision-making right has been removed from recruitment?
Salary information is not provided upfront to applicants, creating an unfair information advantage to the benefit of the employer.
Job Applicants and Wage Negotiations
In South Africa, we see income inequality by race and gender. There are women who agree to work for less than men and black people who agree to earn less than other races.
Are job applicants accepting unfair offers based on incorrect assumptions of trust?
Legislation and Interviews
Labour relationships are guided by the Labour Relations Act, Basic Conditions of Employment Act, the Employment Equity Act and the South African Constitution.
If you are being interviewed for a job, the LRA and BCEA don’t provide relevant protection from unscrupulous hiring firms.
However, the Employment Equity Act and the Constitution can.
Recruitment and Employer Dominance
Hiring companies create an ideology, a system of ideas and ideals justifying unfair actions during recruitment and they need everyone to play along with them.
They assume dominant positions during wage negotiations to influence what an applicant is willing to accept.
Different types of applicants exist, each with different levels of vulnerability:
- poor job seeker
- the unemployed job seeker and
- the employed job seeker
These different applicants suggest different negotiating power or confidence e.g. An employed job seeker presumably has more power during a recruitment and selection process than an unemployed poor job seeker. The employed person may reject an offer while a more vulnerable poor applicant will agree to it.
Withholding pay information has become ‘widely practiced’ as it feeds profiteering ideology.
Hiring organisations manipulate the population’s trust and expect it to remain unconditional during processes that are flawed, both legally and morally unsubstantiated.
Question this Authority Publicly and Protest
The ‘not an unusual practice‘ must be questioned given that racism was also once considered ‘not an unusual practice’ in South Africa. The lack of upfront information and unwillingness to reflect on behavior and adopt authentic, democratic values must be legally addressed.
The lies that build millionaires
If we agree business has the right to decide what information society can question and what information job applicants have a right to – then they possess the ability to dominate and diminish society’s active interests in, and need for ‘fairness.’
According to the Oxfam report, “the economy of the top 1% was built on a set of false assumptions” that must be exposed, namely:
• The market is always right and the role of governments should be minimised;
• Companies need to maximise profits and returns to shareholders at all costs;
• Extreme individual wealth is benign and a sign of success and inequality is not relevant;
• GDP growth should be the primary goal of policy making;
• The economic model is genders neutral; and
• The planet’s resources are limitless.
This post touches on a range of large topics to be explored in the future, so keep visiting!
- Job adverts without salary information are untrustworthy as they are used to disadvantage applicants and treat them unfairly. Low salaries are as a result of what applicants are willing to accept during a wage negotiation.
- If you are a woman and if you are black, the evidence shows that you will be exploited in the labour market and offered lower wages. Job adverts that disclose pay information are less likely to require secrets to maintain the CEOs wealth.
- Applicants must study negotiation and be ready to argue for a fair wage.
- The lies that build millionaires exist in a society that is largely passive, ignorant of ‘fair’ and vulnerable to unfair.