Beyond Redistribution: Market Power, Firm Structure, and the South African Labour Market

This paper examines how firm structure and market power shape inequality in South Africa. Moving beyond a narrow focus on fiscal redistribution, it introduces a pre-distribution lens that highlights the role of ownership patterns, industry concentration, and firm behaviour in driving wage disparities and unequal economic participation. Drawing on sectoral data from Statistics South Africa and the South African Reserve Bank, the study documents persistently high concentration in finance, telecommunications, and manufacturing, contrasted with more competitive dynamics in agriculture and construction. These patterns correlate with divergent labour market outcomes: highly concentrated sectors exhibit elevated markups, declining labour shares, and greater wage inequality, while less concentrated sectors display more inclusive wage dispersion. The analysis demonstrates that competition policy must evolve beyond a narrow interpretation of consumer welfare to address structural inequality. By integrating efficiency with social justice, reforms in market structure and labour institutions can foster a more inclusive and equitable South African economy.