It’s more than money: telling the story of racial wealth divides in the UK and South Africa
Defining the Divide
Defining the Divide
Important research in the US and UK has begun to consider trends in the racial wealth gap over time, and have indeed generated a vital, and underappreciated possibility – that the racial wealth gap is not only large but may be increasing. These differences can no longer be referred to as gaps, but chasmic divides across racial and ethnic groups.
This digital storytelling project, a part of the LSE International Inequalities Institute’s Wealth Elite and Tax Justice research programme, cofunded by LSE EDI, draws together original research, bodies of critical scholarship, and oft-silenced voices exploring the nature and experience of entrenched racial wealth divides. Beyond the accumulation of money and assets, what is wealth? And why do racial wealth divides matter?
These stories are told from Cape Town, the first permanent European settlement in South Africa, and London, the heart of the British Empire, in the afterlives of slavery, apartheid, conquest, settler colonialism and forced displacement. In both contexts, the racial wealth divide is embedded in these long-term colonial projects of control.
Adele Oliver
What is Wealth Anyway?
The Hidden Iceberg
Wages
Salary
Benefits
‘In-kind' resourcing
‘Social’ wage
Housing assets
Savings
Investements
Public entitlements
The commons
And even further down, in the murky depths lie the more intangible forms of wealth, the sociopolitical privileges that concretise these divides:
Goodwilll
Benefit of the doubt
Security
Access
Knowledge
Support
Confidence
Community
Entitlement
Wealth doesn’t just exist in itself, get ‘created’, or trickle down. It is extracted and appropriated. We need to recognise the fluidity of this switch between the narrow economic measurement of wealth, and the much broader historical usages of the term, always being aware that narrow economic definitions can be a brutal abstraction from more public and collective understandings of wealth.
Professor Mike Savage, Professor Corinne Squire & Dr Annalena Oppel
Relative household wealth in UK
In the UK, Indian households have 90–95p for every £1 of White British wealth, Pakistani households have around 50p, Black Caribbean around 20p, and Black African and Bangladeshi approximately 10p.
Source: Omar Khan, Runnymede, The Colour of Money
Relative household wealth in South Africa
In South Africa, for every R1 in wealth held by the typical white household, the typical Black household held 5 cents in wealth.
Source: Chelwa et al, 2023, The Racial Wealth Gap in South Africa and the United States
Wealth as Home/land
Colonial urbanism: imperial legacies in home and land ownership
I think for me, housing. I'm in my early 30s, living in London, not able to buy a house, knowing lots of people who have bought a house because they've inherited wealth or being gifted wealth from their parents. That's like a personal thing that I think about a lot with access to being able to buy your own home right now.
Focus group participant, London
Housing property assets are central to any enquiry into racial wealth divides. The importance of home and the land on which it stands extends beyond housing as an asset. Access to the sense of belonging, security, self-sufficiency and in-community grounding that home/land brings extends beyond the physical asset has historically, through the European colonial project, been gatekept along racialised lines.
The Empire at Home: Windrush-era migration, gentrification and losing out in the London housing market
In 1948, the year the HMT Empire ship arrived at the Tilbury Docks, the British Nationality Act was passed, creating a new category: ‘Citizens of the United Kingdom and Colonies’, giving people from British the right to live and work in Britain. Denied access to loans and bank accounts, these communities turned to, such as Pardner, to generate collective forms of wealth.
England was constructed as the homeland in colonial education, though home and land ownership is continually slipping through the fingers of their descendants. Rising housing costs, austerity and gentrification of many of the areas where the ‘Windrush generation’ settled, means that housing assets, often the most important and only asset households will ever own, are being sold off to cover more immediate needs.
The area I grew up in has changed so much. We sold the house my parents owned a few years ago and moved further out. It was worth a lot – much more than they paid in the 80s. We wanted to keep it in the family, but my siblings and I couldn’t justify keeping it when there were so many other things to pay for.
Focus group participant, London
The parents of Awaab Ishak, who died of black mould in a rented flat, told their landlord to 'stop being racist'.
As James Gleeson points out in his report on housing and race equality in London the housing aspirations of Black, Asian and minority ethnicity Londoners (including eventually buying their own home) are similar to those of White Londoners, but Black Londoners are less able to realise these aspirations because of factors including the high cost of market housing, lower levels of savings and less access to inherited wealth.
Home ownership rates among ethnic minorities in the UK
Spatial inequalities colonial master planning, and the myth of ‘post-apartheid’ South Africa
European settler colonialism was a land-based project, nowhere is this more visible than in Cape Town where apartheid spatial segregation laws have been abolished in law but substantively are still in effect.
Photo credit: South African History Online
Thirty years after the end of apartheid, hundreds of thousands of Black families living in South Africa’s urban townships are facing the same tenure insecurity and the threat of homelessness as they fiercely contest the ownership, occupation, control and rights to access so-called ‘family homes.
Socio-Economic Rights Institute (SERI), A Gendered Analysis of Family Homes in South Africa Research Report
Wealth as Inheritance
Wealth is fundamentally a marker of ‘the weight of history’.
Professor Mike Savage
Key to understanding inequality generally and racial wealth divides specifically is the reproduction of wealth, or lack thereof, over generations. Though we often think of inheritance as a positive gain, often through the intergenerational gifting of assets like housing, racial wealth divides expose a broad spectrum of inheritance that includes debt and negative wealth.
As Eleni Karagiannaki shows, a much higher proportion of homeowners from all ethnic minority groups have mortgage debt than the White British homeowners. Not only are they more likely to hold financial debt but also some ethnic minority groups (e.g., the Black African and Black Caribbean ethnic groups) have high exposure to high-cost liabilities such as credit card debt and overdrafts.
We suffer because of that absence because you have to build from zero. There’s a bigger load that we need to deal with as opposed to certain other races. And as I say now, since all this happens, it’s almost like an unending cycle. There will never be a time for most folks to be able to leave something for their folks because there is almost like a massive deficit generationally. In fact, now we can even speak of something called generational debt. As in this is serious debt that has been inherited. That's how it plays out.
Focus group participant, London
Inheritance of, not just assets, but also the social currency of connections, status and knowledge allows the wealthy to navigate through dense, complex systems with a level dexterity that often evades those without this intangible asset.
For me it’s like you hear these things about tax avoidance, tax evasion, different loopholes - if you’re not really kind of acquired with these knowledge and terms, how do you know what to do? Whereas people that are very well established in terms of business and can access this financial advice, there’s ways they pay less taxes, that means they can retain more wealth than other people that are paying higher level of taxes in relative terms. I think for richer groups, these would be just conversations that are happening over the dinner table in the household, on where to invest your money, how to get on the property ladder, all of these things.
Focus group participant, London
The importance of wealth as inherited knowledge and connections is stark in South Africa here unemployment rates amongst Black and Coloured community remain some of the highest in the world.
South African unemployment rates by race
Source: Stats SA labour force survey data.
If my daddy had money and he was wealthy, we could just go to someone say, “Hey, let my son work for you.” And we would get the job [...] But there’s no opportunities for us. There’s just nothing for young people to do out there.
Focus group participant, Cape Town
Wealth as Community
Michael Hamnca, Snethemba Mteza and Nontsasa Mteza of Cape Town’s Movement for Change and Social Justice discuss the importance of knowing your rights, co-created knoweldge systems and community solidarity.
Giving back and ‘Black tax’: Ubuntu? Burden? Both?
Black tax is a diasporic phenomenon that describes the complex experiences of distributing wealth amongst the family and community, caretaking and the expectations that come with it.
If you know, even if you do get to a point where you might be comfortable, you have so much outgoing, not just for yourself, but then you need to support all the family members, or you know, sending money back home. It’s quite a big thing, even if that’s you know, even if that's just to support family rather than building houses and stuff, it can be a monthly way that money gets trained, even if it looks like there’s a lot of it to begin with. So, I think it is quite difficult, for younger generations at this point to benefit...
Focus group participant, London
Many argue that ‘Black Tax' should be reframed as a sign of affective, community-driven wealth, summed up in the Nguni philosophy of Ubuntu, which emphasises the importance of connection (“I am because we are”). The ability to give back could be seen as abundance rather than deficit.
Read more about this in project member Dr Annalena Oppel’s paper on Black Tax and coloniality – re-interpretation, emancipation, and alienation
For me wealth is just being able to, to be in a position to give back, for me that’s what I view wealth. Just doing and giving without worrying.
Focus group participant, London
The fact remains though, that in both Cape Town and London, Black people are much more likely to inherit negative wealth than their white counterparts.
Wealth as Health
The maxim ‘health is wealth’ may seem trite but public entitlements such as healthcare, are one of the key components of ‘wealth’. Access or lack thereof to health and healthcare features as a key feature of racial wealth divides in London and Cape Town.
A 2023 study on air quality, exposure and inequalities in Greater London found that air quality is the largest environmental health risk in the UK. Unsurprisingly, racialised communities (specifically, those who identify as Black, Mixed Multiple, and Other) are more likely to live in the most polluted areas. Areas in London with disproportionally white populations have the lowest air pollution concentrations.
What the stories speak to is the hierarchy of human value and how race, perceptions of ability, and perceptions of wealth intersect to dictate what kind of education, healthcare environment - essentially, what kind of wealth - you can access.
Babette May, project member and PhD researcher on ‘Living & labouring reproductive (in)justice: lifestories, histories, & fictions of epistemic disobedience’
Wealth is people that do not struggle. So, basically what I am saying is that out there, there is people that do not struggle; they have money and stuff, so they get first privileges like in hospitals. Say now they have an emergency, there’ll be there first. Like, they’ll be served first. And then you get other people that don’t have that much, they have to wait in line to get looked at, checked up at and actually they go to different hospitals. Because like, there’s hospitals that take in people that has money...you can’t go to Christian Barnard when you don’t have money...that’s a very expensive hospital and if you’re like me, you don’t have money then you are forced to go to those public hospitals...
Focus group participant, Cape Town
The Story Continues
This is just a short snapshot of some of the key features of wealth, racial wealth divides in communities in London and Cape Town. To find out more about how we can tackle and reduce these chasms through policy, community, and economic change, read our forthcoming book, to be published by LSE Press.
Read more about LSE’s current research on racial wealth divides in the UK and South Africa here.
Read more about racial wealth divides:
In the UK
Khan, O., 2020. The colour of money. London, UK: Runnymede.
https://www.runnymedetrust.org/publications/the-colour-of-money
Cummins, N., 2024. Ethnic Wealth Inequality in England and Wales, 1858-2018. Available at SSRN 4698062.
Karagiannaki, E., 2023. The scale and drivers of ethnic wealth gaps across the wealth distribution in the UK: evidence from Understanding Society.
Savage, M., Mahmoudzadeh, M., Mann, E., Vaughan, M. and Hilhorst, S., 2024. Why wealth inequality matters.
In the US
Derenoncourt, E., Kim, C.H., Kuhn, M. and Schularick, M., 2021. The racial wealth gap, 1860-
Shapiro, T.M., 2017. Toxic inequality: How America's wealth gap destroys mobility, deepens the racial divide, and threatens our future. Hachette UK.
Williams, R.B., 2017. Wealth privilege and the racial wealth gap: A case study in economic stratification. The Review of Black Political Economy, 44(3-4), pp.303-325.
Williams, R., 2016. The privileges of wealth: Rising inequality and the growing racial divide. Routledge.
In South Africa
Díaz Pabon, F.A., Leibbrandt, M., Ranchhod, V. and Savage, M., 2021. Piketty comes to South Africa. The British Journal of Sociology, 72(1), pp.106-124.
Branson, N., Hjellbrekke, J., Leibbrandt, M., Ranchhod, V., Savage, M. and Whitelaw, E., 2024. The socioeconomic dimensions of racial inequality in South Africa: A social space perspective. The British Journal of Sociology.
In general
Rodney, W., 2018. How Europe Underdeveloped Africa. Verso Books.
Pfeffer, F.T. and Waitkus, N., 2021. The wealth inequality of nations. American Sociological Review, 86(4), pp.567-602.
Piketty, T., 2020. Capital and Ideology. Harvard University Press.
Paidipaty, P. and Savage, M., 2021. Debating Capital and Ideology: An introduction to the special issue. British Journal of Sociology, 72(1), pp.3-7.
Read more on Ubuntu
Albertini, Julien, and Anthony Terriau. 2019. ‘Wealth and Health in South Africa’. Working Papers, Working Papers, , March.
https://ideas.repec.org//p/hal/wpaper/halshs-02073800.html.
Chatterjee, Aroop, Léo Czajka, Amory Gethin, and UNU-WIDER. 2020. Estimating the Distribution of Household Wealth in South Africa. 45th ed. Vol. 2020. WIDER Working Paper. UNU-WIDER.
Chelwa, Grieve, Mashekwa Maboshe, and Darrick Hamilton. 2024. ‘The Racial Wealth Gap in South Africa and the United States’. Review of Political Economy 36 (2): 423–40.
Gade, Christian B.N. 2012. ‘What Is Ubuntu,? Different Interpretations among South Africans of African Descent’. South African Journal of Philosophy 31 (3): 484–503.
Mbewe, Samson, and Ingrid Woolard. 2016. ‘Cross-Sectional Features of Wealth Inequality in South Africa: Evidence from the National Income Dynamics Study’. 185. SALDRU Working Papers. SALDRU Working Papers. Southern Africa Labour and Development Research Unit, University of Cape Town.
Metz, Thaddeus. 2011. ‘Ubuntu as a Moral Theory and Human Rights in South Africa’. African Human Rights Law Journal 11 (2): 532–59.
Mhlongo, Niq. 2019. ‘Keeping Our Ancestral Spirit of Ubuntu Alive’. In Black Tax: Burden or Ubuntu?, edited by Niq Mhlongo. Johannesburg: Jonathan Ball Publishers.
Nattrass, Nicoli, and Jeremy Seekings. 2001. ‘“Two Nations”? Race and Economic Inequality in South Africa Today’. Daedalus 130 (1): 45–70.
Praeg, Leonhard. 2008. ‘‘An Answer to the Question: What Is [Ubuntu]?’’. South African Journal of Philosophy 27 (4): 367–85.
Why Wealth Inequality Matters: some blogs and reports
Why wealth inequality matters & what to do about it! | LSE Inequalities
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