25/01/2018 16:06 SAST | Updated 25/01/2018 16:37 SAST

Do Learnerships Perpetuate The Black-White Earnings Gap?

If business is genuinely interested in transformation, a good starting point is to pay employees fairly.

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It is a bitter pill to swallow that so many years after apartheid, there exists such a huge gap in the average monthly earnings between black and white professionals in South Africa. According to earnings-monitoring firm Analytico, white professionals earn on average almost three times more than their black counterparts: R20,000 and R8,000 respectively.

A string of reports by Statistics South Africa (Stats SA) highlights alarming disparities between races at all levels of society, that continue to grow. These reports demonstrate how black South Africans remain in a downward spiral, because they continue to face the host of structural drivers of inequality.

Last year, reflecting on findings of one such report, statistician-general Pali Lehohla warned that South Africa faced a "cocktail of disasters", because their report noted that black and coloured youth experienced unemployment at a disproportionate rate, correlating with poor levels of higher education in both population groups.

The report, which assessed the vulnerability of South African youth, found that youth unemployment was strongly linked to those who have not completed matric – around 57 percent of youth in this category are without a job, compared to an unemployment rate of 38 percent among those who completed matric. It also found that employability increased with higher levels of education.

Lehohla has since stressed that tertiary education is key in tackling unemployment in South Africa, as young people obtain specialised skills at institutions of higher learning that not only increased the likelihood of finding employment, but their market value too.

However, recent research by the Studies in Poverty and Inequality Institute shows that while unemployment levels among those without matric far outweighs that of university graduates, the number of unemployed people who have a tertiary education has increased by more than 150 percent since 2008.

Government-incentivised programmes, such as corporate learnerships, aim to achieve the New Growth Path goals of restructuring the South African economy to improve its performance in terms of labour absorption, composition and growth rate.

While collaborative efforts between government and business to curb unemployment seem like a win-win situation, low wage benchmarks set by the department of labour have lasting consequences for workplace entrants enrolled in such schemes.

International studies show that earnings received in the beginning of a worker's career have a profound impact on the trajectory of income growth over the course of their life. A report by the U.S.'s Federal Reserve Bank of New York analysing the career paths of five-million people found that workers could expect a 38 percent pay swell by the end of their careers.

Current learnership allowances are set at around R3,500 per month for persons with a degree; that is less than half the national average starting salary for persons with a bachelor's degree, at R8,270, according to Analytico.

It is not surprising, then, that there exists this huge pay gap, since those professionals starting out in learnerships are so poorly valued at the onset of their career, compared to fairer counterparts who have an easier time walking into jobs after university, according to SA's private-sector employment trends.

While there exists no data to verify this, the absence of such data makes it very difficult to dismiss either. In fact, the absence of any kind of monitoring makes it very hard to gauge the exact social impact of such schemes – positive or negative.

Yes, learnerships are an entry point for many black professionals into corporate SA. But the ease with which business is able to create positions for black graduates when promised tax breaks shows that the demand is there, just not the will.

That business is only ready to employ black labour at a discounted rate clearly demonstrates the need for the transformation that these programmes aim to achieve. However, perpetuating wage inequality in order to do so is counterproductive, especially looking at the negative impact low wages have on deepening poverty.

If business is genuinely interested in transformation, a good starting point is to pay employees fairly. Even if learnerships don't count as formal employment, enrolled graduates contribute to a business like any recently qualified employee would; they deserve reasonable reimbursement. Anything less is superficial and contributes to the problem.