One paycheck away from poverty

A Durban Dad won a case at the Constitutional Court which protects the rights of children attending private schools. In the event that the parents cannot pay the fees the school cannot stop a child from writing exams.

Is it not bizarre that in a country where so many people barely make it to the end of the day, let alone month, that we have parents fighting in court to keep their children in private schools?

I am also involved with a local public school where we have seen a dramatic increase in bad debts and arrears on school fees over the last 12 months. The economy hasn’t exactly been firing with SA dipping in and out of recession so in this context it is understandable. What I could not reconcile in both these instances of why parents don’t just relocate their children to schools they can afford or adjust their lifestyles accordingly.

This is the non empathetic judgemental view. The area that our local public school is located is very affluent and the locals are not shy to display their affluent lifestyles. Property in the area is very expensive and owning is very difficult. So it does shock me that “these people” will struggle to pay fees to keep their children in school.

Thankfully there are researchers like Rocco Zizzamia who can provide insight into this phenomenon. From Zizzamia’s research the middle class in South Africa is shrinking. The accepted definition of middle class in South Africa being people who earn between R3 104 and R10 387 a month. The loss of income by one person in a household can have a dramatic impact on the household income and immediately move someone from middle class to poverty or low income. In one month.

Lets assume these middle class households are not the people sending their children to private schools as even at a household income level of R10 thousand per month, that would not be enough to meet all household expenses and afford private school fees. Here is a link showing the fees for the top 20 most expensive schools in South Africa. At over R200 thousand per year they are more expensive than double the annual household income of the so called middle class.

Basically, the people defaulting on their private school fees are several strata of income above the middle class. It is my theory, therefore, that these relatively well off people are also one paycheck away from poverty. In many cases the home you live in whether owned or rented, the vehicle you drive, food you eat, medical cover available and education you afford for your children is dependent on your ability to earn a certain level of income. What happens when that income is not available?

There are many angles to use in answering this question. One is financial and centred around the need to educate people to manage their finances better. There are people much more qualified to answer these questions than me, such as Kristia and Simon from the Fat Wallet Show. Or Maya Fisher- French with her excellent Maya on Money resources. Johan Rupert Jr just thinks it because we spend all our money at Taboo. Don’t drive a BMW and don’t go to Taboo and the problem is solved!

The other angle is to think of the role that aspirations and expectations play in driving human behaviour. Is it so wrong for a person who has managed to earn a particular level of income to aspire for the best for themselves and their children? Logic implies that lowering lifestyle costs can be the shortest route to financial freedom. But most people don’t do it. Maybe the lifestyle represents more than the products and services the income can buy?

Lastly, it also goes to show how competitive human beings are. The concept of relative deprivation is very real and alive. In summary when people compare their lifestyles with other people they feel like their lives are worse than they actually are. Many South Africans (17 million to be a bit more accurate), survive through government’s social grant system. For many people this is their only source of income and the concept of a private school requiring R200 thousand or even R40 thousand would be unheard of. Yet, we have a parent exercising his right in the highest court of the land defending his child’s right to remain in the school.

I’m really beginning to feel that we really are in the rat race. Everyone except the 1% of elites is waking up everyday trying to keep a wolf from the door. For the poorest of the poor it’s pure poverty and having a meal or not. For the middle class maybe the ability to live in a better suburb or move back to a township. For the high income earners the wolf could be the ability to service their debt and keep their homes. For the ultra wealthy maybe it’s about how to protect their asset base so the bubble may never burst.

I think this case just reminded me how for many people our financial and social status right now is really temporary. Even a huge paycheck can go away, temporarily or permanently. Always good to remember for ourselves and also to empathise with anyone going through a loss of income. Even those earning a lot are potentially one paycheck away from tough times.