The current obsession with attacking wealth and capital is ignoring the tremendous achievements made since the 1980s in reducing global poverty, the Free Market Foundation (FMF) said on Thursday, adding that it was more important to focus on equal opportunity than on executive pay levels.

FMF economist Vivian Atud noted that, according to the Gini co-efficient, which was used to measure inequality, South Africa was the most unequal society in the world; however, she said this measurement was limited as it did not measure accumulated wealth or differential use of household income or the cause of inequality.

Most importantly it also did not reveal differences in opportunity or capability, Atud noted.

She said high executive pay did not matter as long as everyone, born with natural ability and potential had the equal opportunity to rise to the heights of million-rand salaries.

“It is the role of government to create the environment where everyone who is capable, has the opportunity to advance through education and employment. Governments should focus on where workers lack capacity [when] they have been denied opportunity,” Atud added.

She said inequality was an outcome driven by the natural state of society or by government’s interference in society.

“Inequality is often an unintended economic outcome of government social policy,” Atud said, highlighting that government intervention to regulate the labour market had been a blessing and a curse.

She said affirmative action and black economic-empowerment policies, while having succeeded in increasing the participation of blacks in the workplace, had done so at the expense of individual initiative and ambition, which drove a person to succeed on merit.

Atud also said analysis showed that overall African participation in the labour force had decreased as an unintended consequence of affirmative action evidenced by the increased dependency on the State rather than self-sufficiency.

“While these policies are born out of social or political ideologies, their actual consequences are a matter of economics,” Atud said, pointing out that black people were choosing career paths that would lead them into lower paid jobs while white people were choosing to train in more highly-prized scarce skills with higher earning potential.

Meanwhile, FMF executive director Leon Louw stated that those who were concerned about inequality were obsessed with wealth and not poverty.

“They want to destroy the rich at the expense of the poor. They ignore humanity’s greatest achievement – the virtual elimination of poverty and that many of the world’s poor today have a far higher standard of living than the middle class of yesteryear,” he said.

“They castigate free markets for enriching those who actually enrich the poor with capital, jobs, products and services,” Louw added.

Meanwhile, at a media briefing, on Wednesday, following the release of its 'Executive Directors’ Remuneration Practices and Trends' report, advisory firm PwC said it was important to note that the salaries of top executives were mostly based on company performance and reflected the responsibilities of the executives.

PwC economic adviser Dr Roelof Botha also noted that the average wage in South Africa was about three times higher than that of the rest of sub-Saharan Africa and was also higher than the wages earned in Brazil, Russia, India and China.

However, despite this, workers in South Africa were still striking for higher wages, with trade unions having been “opportunistic and clever” to point to the wage gap.

Adcorp labour market analyst Loane Sharp said that this was “economic nonsense”.

He said unions were fighting this battle for an entry-level wage above economic value out of jealousy regarding the wages earned by higher-level employees as well as to exclude the competition union members faced from younger, although less experienced, workers.

PwC Southern Africa human resources services partner Martin Hopkins added that, currently, junior workers in South Africa were being paid well, especially in the platinum mining sector, where the average entry-level employee earned about 6.6% more than his or her corporate counterpart.

Hopkins said this substantiated the claim that the unions were seeking these higher wages and focusing on the payment gap between executives and junior employees out of self-interest.