Southern Centre for Inequality Studies

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沙巴体育官网_沙巴体育app the project

Our Project examines how the production system can be reconfigured to generate outcomes that improve equity within society and support vulnerable households and communities.

Policy discussions on solutions to inequality tend to focus on ex-post redistributive measures – for example, tax policies – or on policies that create new opportunities – for example, through investments in healthcare or education.

These solutions are often preferable because they don’t interfere with market outcomes and don’t challenge distributions of wealth and power. Consequently, very little analysis has been done of how the production system itself and the associated financial architecture in developing countries is generating increasing levels of inequality and how policies may be designed, within production and finance itself, to achieve more equitable outcomes.

As such, the pre-distribution and ownership project aims to investigate how the production system itself can be reconfigured to generate outcomes that improves equity within society, prior to fiscal transfers to support vulnerable households and communities.

Five areas of proposed policy intervention

  • Policies within the firm that could lead to more equitable distribution of worker ownership and profit sharing, wage increases for low-income workers and those under-represented.
  • Policies between firms, using competition policy to address market power.
  • Policies between firms and communities that better integrate industrial activity with local communities – either through ownership by the local community or through social-economic investment agreements.
  • Economy-side policies which consider technological change and the role of public sector actors in creating better outcomes to address inequality.
  • Policies at the international level and unequal power relations in global supply chains.

Current work

Competition and Market Structure

Market power accumulates in the hands of dominant firms when markets deviate from competitive norms. This can lead to upward redistribution within the firm, price increases which disproportionately harm low-income consumers and market distortions that hamper efficiency and deter investment. Competition policy therefore has crucial - though underexplored -inequality dimensions to it. This project will investigate how the production system itself can be reconfigured to generate outcomes that improves equity within society, prior to fiscal transfers to support vulnerable households and communities 

Pay Gaps and Disclosures

The labour market remains a key site to view and understand how inequality is perpetuated in the South African society.

Despite advances in the post-apartheid era, women still lack access to the formal economy. Furthermore, where employed, women typically earn less than men. In 2020, the National Business Initiative approached the Southern Centre for Inequality Studies to jointly develop a pilot project with the following objectives: Firstly, to develop a simple and standardised methodology that firms of different sizes can apply across various sectors. Secondly, to apply the devised methodology to a selection of firms to calculate gender wage gaps. Lastly, based on emerging results to determine solutions to improving and correcting identified wage gaps. Subsequent to this initial engagement, an online tool has been developed to enable more firms calculate and track their pay gap.

Although current Employment Equity reporting structures require firms to report salary information, major inconsistencies in measurement and calculation make it difficult to compare trends over time and across firms. If passed, two bills tabled in 2023 - the Companies Amendment Bill and the Companies Second Amendment Bill would make it compulsory for companies to disclose their pay gap ratios. The team submitted a report in support of such disclosures.

Corporate power

Corporations are paramount political actors in South African society. Their influence of the Apartheid regime was fundamental, as has been their influence on democratic politics. Yet opinions on the status of corporate power diverge – with some seeing big business as a resilient hegemonic force and others stressing its loss of influence. Extant research offers little insight into this debate, as empirical work on business politics has been extremely sparse in recent years. This project hopes to correct for that. It will investigate different resources of business power – structural, instrumental and infrastructural – and how these have risen and fallen over the post-Apartheid period. It will examine changing structures of production, firm demographics and governance institutions and how these have aided or disempowered different coalitions in the corporate sector. It will examine the personal, commercial and political networks of firms and corporate elites and how these shape political influence. And it will examine the growing role of business actors in economic governance and the provision of basic services. Ultimately this project hopes to provide a holistic picture of the shifting modes and mechanisms of corporate power under democracy. 

Corporate financialisation and accumulation dynamics

Financialisation is widely deemed to be a dominant trend of development in contemporary capitalism. Central to how financialisation shapes forces of distribution and accumulation is through its influence on the governance of non-financial corporations. An extensive literature argues that shareholder value orientation leads firms to become increasingly short-termist and to adopt a “downsizing and distributing” orientation – prioritising shareholder rewards and financial profits over investment and growth. Yet while these theories are extremely influential they are empirically shaky. This project will take a critical lens to corporate financialisation theories, clearing up conceptual ambiguities and re-testing core hypothesis. It aims to investigate just how important shareholder value and financial logics have been relative to other structural forces shaping patterns of capitalist development.  

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