Wednesday, November 13, 2013

How to be rich

Is this the million dollar question? How do we get to be rich? There is a very interesting article at and hat tip to Steve Hayes for picking it up.

This is economist Mike Schussler's basis for the article:

White people earning six times more than blacks, screamed the headlines after the release of the 2011 census.

I do not doubt that whites earn more than blacks - although in a way it is too simplistic to state it as such. 

At first this might seem like an article trying to justify white people having a privileged position and it might seem to be coming from a defensive position, but some of the points he makes are very useful. They are useful because they move us out of the realm of victimhood and into the realm of agency.
How can I be rich? You need to be white. I'm not. End. Victim.

Schussler points out a number of things, of which I am only going to mention four.

Median age: The median age of black people in South Africa is 21, that of white people is 38. This means that if you put every black person in the country in a line in order of age, the middle person in the line would be 21. Or in other words half of the black population is 21 or under and half is 21 or over. As Schussler points out, older people earn more. They have experience and have often been promoted to higher positions.

Message to people of all races: You are not a victim. Be patient. Income grows with age.

Educational level: White South Africans have a significantly higher level of education than black South Africans. 77% of white people have matric or more compared to 35% of black people. It goes without saying that better skills mean greater income. This is undoubtedly an effect of apartheid, but it can be overcome.

Message to people of all races: You are not a victim. Fight for an education and a matric, even if you are already an adult.

Commitment to work: I am combining two of Schussler's points here. The one is that over 73% of white people are either working or looking for work. Fewer than 54% of black people are trying to be part of the labour force in the country. This means that approximately 46% of black people between the age of 15 and 64 are not working or looking for work. There can be all sorts of reasons for this, but if hopelessness is learned it can also be unlearned. The other statistic regarding work is that white people stay in one job for an average of 71 months while black people remain in the a job for an average of 51 months. Longer commitment to a job tends to result in specific skills being acquired and an increase in remuneration.

Message to people of all races: You are not a victim. Look for a job. Accept a job. Stay in the job.

Schussler has other angles. The article is worth reading and you can find it here. Many of the stats quoted can be found at Stat SA here (it is a pdf).

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