Entering unprecedented territory

The process of adapting to new rules of engagement since the national state of disaster was declared in South Africa on 15 March 2020 has been more drastic for some than others.

Some, who are continuously marginalised and lack access to the formal economy, have had to create alternative ways of surviving. For these traders operating in the informal economy – street vendors, spaza shop owners, local entrepreneurs – moulding a new way of life and adapting to external forces to survive is not a foreign concept. For many, while it has been business unusual, it has been business nonetheless and adjusting has just meant converting living-rooms into meeting rooms.

This article is not about those people. Rather, it is about the often neglected informal labourers who have been forced into a desperate choice between putting food on the table and keeping safe from a deadly virus. As a result, now, more than ever, we are confronted with the increased marginalisation and exclusion of the informal sector. 

For a long time, the informal sector has been positioned as the proverbial “safety net” against unemployment in this country. According to the Q1 Quarterly Labour Force Survey, there are 2.9 million people earning a living in the informal sector. In percentages, the informal sector accounts for almost 26% of total employment (traders at 17.8% and household or domestic workers at 8%).

Despite this, the informal sector continues to be largely overlooked by formal economic structures. The informal sector contributes notably to job creation and to the alleviation of poverty. As such, it should be praised and acknowledged as contributors to the GDP and economy, instead of being forced to operate on the peripheries.

Who is an informal worker?

Precarious work is normally characterised by a lack of a written contract and therefore by a lack of obligatory contributions for either employer or employee. Statistics South Africa defines an informal worker as a self-employed individual who is not registered to pay income tax or value-added tax (VAT).

This would include street vendors who sell amagwinya (vetkoek or fat cake), fruit, vegetables and other items on pavements; and spaza shop owners who provide various household items for their communities.

However, the informal economy isn’t just made up of those who trade in goods and consumables. It also includes taxi drivers, domestic workers, child carers and car guards in public parking areas. 

Lack of regulation in this sector has resulted in informal workers being vulnerable to insurmountable challenges such as having to rely solely on a low and sporadic income, as well as the uncertainty that comes with lack of permanence and security.

The National Income Dynamics Study – Coronavirus Rapid Mobile Survey (NIDS-CRAM) revealed that 42% of grant-receiving households had lost their main source of income since the beginning of the lockdown in March 2020. The survey also shows that the average informal business has experienced a massive 60% decline in revenue or income between February and April.

Not only are informal workers faced with hard-hitting economic challenges, but they also find themselves fending off gross human rights violations – more so during the lockdown period. There have been numerous accounts of police brutality reported by informal traders, especially street vendors, at the hands of law enforcement officers.

Stories like that of Itumeleng Lekomamyane, a 27-year-old father who sells sandwiches in order to provide a livelihood for himself and his family, have been plentiful. Lekomamyane had his entire stock arbitrarily confiscated by Johannesburg Metro Police Department (JMPD) officials because he was allegedly in contravention of trading bylaws. He was then told to pay officials the sum of R1,600 if he wanted his stock back.

The informal food economy is a lot larger than we think. According to reports from the University of the Western Cape’s Centre of Excellence in Food Security, it is estimated to account for about R360-billion a year. With such a notable contribution to the South African workforce and the economy, the informal food industry should not be an overlooked sector. 

Rescued by innovation

The informal sector exists today because the formal economy has failed to make space at the table for everyone. For decades, formal employment structures have been unsuccessful in keeping up with the growing number of South Africans who become eligible to exchange their labour for income. This is evident from the Quarterly Labour Force Survey, which shows that the participation rate increased to 60.3%, while the absorption rate is lagging at 42%. This means that people want to work, but simply do not have the opportunity to do so.

Once the doors of formal employment have closed, those who are shut out find themselves forced to innovate and create alternative ways to generate an income.

People who are subjected to chronic unemployment and are therefore structurally unemployed are more likely to seek economic refuge in the informal sector. The fact that 39% of South Africa’s poor have lost their jobs and have no source of income shows that the economic shock of this pandemic is felt most by those who are also the most vulnerable members of our society.

This creates a situation where people have to compete for survival due to the social negligence of the government. The burden of providing civic protection has shifted from the hands of the state and has landed at the feet of the people. Instead of receiving substantive support, informal businesses and workers are stranded on the outskirts as the “forgotten” sector.

As the saying goes: necessity is the mother of innovation. No one knows this to be true more than traders in the informal sector in this country. The sooner we do away with the mentality that precarious workers are out for government handouts, the sooner we can recognise the finesse required to navigate this sector. If these ways of innovating were recognised and respected, the state could perhaps learn a lesson or two in addressing the currently unforgivable situation of a 43% expanded unemployment rate.

The stories that follow are from informal workers who find themselves in very difficult situations, with no means of making a living since the lockdown began. These are the innovators who have had their ability to earn a livelihood undermined and disrupted, with very little to no state assistance to compensate for this. These stories are from people who have been failed by the social grant system and completely locked out from getting any wage support or benefiting from any relief programmes.

Having these perspectives is necessary to provide a lens for the lived experiences of informal traders. Proper and informed understanding is imperative to influence adequate and appropriate policy responses, which must be informed by the dismantling of harmful stereotypes.

These stories provide a glimpse into the lives of what ordinary South Africans have to do to survive, which often includes facing complex realities and experiences with conditions like police brutality and being terrorised by, and having to navigate, criminal vigilante gangs.

Precarious work made even more so

Robert Mazibuko* is a 38-year-old handyman who works as an informal plumber in the City of Ekurhuleni Metropolitan Municipality on Gauteng’s East Rand. When asked about his initial thoughts after the lockdown was announced, Mazibuko admitted that he didn’t fully understand what it meant. The only thing that was clear to him was that things were about to get a lot harder for him and his family.

“Ever since this whole lockdown thing started, nobody wants nobody in their house anymore because they are afraid of the virus,” he said. “Even the people that used to tell me about piece jobs are not operating, simply because there are no more jobs now.”

Mazibuko knows no other profession. After his schooling, he tried to get a qualification in computer literacy because he was told an “industrial revolution” was coming. Due to lack of funding and the increasing social demands of being a provider, Mazibuko decided to turn instead to his craftsmanship to make ends meet.

Over the years, his skills have opened many doors and opportunities for him, enough so that he was able to mentor other handymen and share work with them. As if the loss of income during lockdown was not hard enough, Mazibuko confessed that he felt a sense of responsibility for the people he worked with and the families they had to support.

This shows that precarious work creates additional opportunities for others, and that many households are surviving because of it.

At the moment, Mazibuko and his entire household of five dependants is surviving on his rapidly diminishing savings and child support grants for his two children. When asked about what he would like to see happen to the future of the informal sector, he said, “The same thing we’ve always wanted – that is to be recognised and considered in formal government things.”

This echoes the cry of many “casual” workers. The bottom line is that informal livelihoods are struggling to remain afloat under lockdown conditions, and adjusting to this new reality presents many hurdles. 

No one knows this to be true better than Debra Modise*, a 40-year-old waste-picker originally from Bushbuckridge in Mpumalanga. Modise lives in Mamelodi north-east of Pretoria, Gauteng, with her partner, who is unemployed, and two children. Like Mazibuko, Modise knows no other way of making a living other than as a casual worker.

Before collecting waste at dump yards, Modise was a street vendor and sold tomatoes and snacks. Asked why she exchanged a life of selling goods by the roadside for one of sifting through rubbish, she replied, “I used to accompany my friends to the dump yard to pick up recyclable material, and I saw first-hand how much money they would get from it. I realised that waste-picking would get me more money than selling cigarettes on the streets.”

Before the lockdown, Modise’s income was whatever she was able to collect at the dump yard and sell to local recycling plants, as well as a child support grant for her youngest child. Now, because of the lockdown restrictions, she can no longer depend on her recycling income, which leaves her entire household of four to survive on the grant money.

When the government tells traders to fold their tables and stay at home, there is an obligation to provide some form of relief and support for this kind of change. Asked if she had received any food parcels in her region since the lockdown started, Modise said that she had received only one, at the end of March, “but it was so insufficient, that it felt like we didn’t get anything. There was only one tin of beans and a small bag of rice and some other things that were finished in no time. How can we survive like that”?

Modise also confessed that when President Cyril Ramaphosa announced the lockdown, she felt very scared for her children and how they were going to survive as a family. “If conditions do not ease up soon, I don’t know how we can continue living like this. At least if they allowed the factories to open, we can go back to collecting and the materials can be sold to give us money,” she said.

According to a Food for Mzansi article, dominant retailers in the food industry are looking to push out spaza shops and open smaller franchises in communities. Big corporations such as Shoprite and Pick n Pay are in the process of taking a bigger piece of the township economy, which will further cripple already existing businesses in the community.

Other than more substantive food parcels, Modise would like to see more government intervention on some of the dump yards in the heart of the townships.

She related a worrying account of lawlessness being left unchecked at some waste-picking sites. Modise explained that some Metro councils had lost control of a number of dump yards in the townships to a group of vigilante rebels who refer to themselves as the “Boko Haram”. This group terrorises waste-pickers into paying “an operational fee” to be allowed access to the yard.

Nobody has been able to stand up to this mob group for two reasons: the first being the desire to live and see another day, as the mob is infamous for inflicting ruthless violence; and the second is the lack of an alternative. Without access to the dump yards, waste pickers can’t collect material to trade for money.

Because the mobs have “captured” these landfills, according to waste-pickers in the community, Metro police have long since stopped responding to emergency calls in these areas, which further legitimises the control that “Boko Haram” has established in “its” areas.

The informal sector has impacted on the lives of millions of people and households in this country, especially womxn-led homes and families who rely on the proceeds of street trading.

Earlier on in the pandemic, the International Labour Organisation predicted that any measures taken to try to curb the spread of the virus would disproportionately affect womxn labourers. Trying to navigate the lockdown space has been difficult for many informal workers, but more so for womxn of colour. A whopping three million people have lost their jobs since April, and two-thirds of these are womxn.

National lockdown has not been kind

It was abundantly clear, right from the start, that the lockdown conditions had not been designed with the informal sector in mind.

Where formal food traders have been categorised as “essential” and allowed to operate during this time, the fruit and vegetable street vendor was initially told to cease operations altogether.

These disparities between the formal and informal food industries have left the casual vendor with nowhere to turn. Even the proposed voucher-in-lieu-of-cash system, where recipients would receive a food voucher instead of money, has been delineated to keep benefiting the “retail giants”. The value of those vouchers would only feed into big supermarkets. Without the liquidity of cash and with the decreased flow of money in the economy, vendors and spaza shop owners will suffer even more, given the already scanty sales.

According to a Food for Mzansi article, dominant retailers in the food industry are looking to push out spaza shops and open smaller franchises in communities. Big corporations such as Shoprite and Pick n Pay are in the process of taking a bigger piece of the township economy, which will further cripple already existing businesses in the community.

Elvis Sekhaolelo, CEO of public benefit organisation eKasi Entrepreneurs, which aims at investing in the development of township and rural entrepreneurs, says this poses a threat to the local economy. If corporations start operating in the communities, “supplier development of township spazas, township farmers, manufacturers and agro-processors needs to be at the centre of their processes”. It would be unacceptable to have big retailers come into the communities and use their branding to crush local businesses.

“We need to ensure that wealth creation remains in the hands of the township entrepreneurs and [that] they benefit the most,” says Sekhaolelo. 

This behaviour from businesses in the formal economy is a blatant disregard of the informal food industry. Instead of being supported during these times of dwindling resources, local vendors and food shop owners are made to unfairly compete not only with one another but with big retailers too. 

Relief! Oh, never mind…

The Covid-19 Temporary Employment Relief Scheme (TERS) had raised many hopes in terms of relief during the lockdown period. This initiative was to allow for precarious workers to receive financial support with the help of their employers. Unfortunately, this relief had a very short lifespan (three months) and was far from being extensive, as was envisioned.

The short-lived relief scheme was not without administrative glitches that left millions of qualifying recipients without payments for the months of May and June. According to comments made by Business for South Africa, the Department of Employment and Labour has attributed the TERS shortcomings to the oversight of some employers, claiming that employers have failed to properly distribute benefits to employees.

The fact that the closing down of informal hawking has hit some harder than others, and that these happen to be the already vulnerable members of our society, is evidence of a need for more formal support of the informal sector.

Of course, this accusation did not take into account the fact that the Unemployment Insurance Fund online system was user-unfriendly and call operators were less than adequately able to resolve queries, which resulted in May payments being processed only in June. 

The City of Cape Town has also started rolling out Covid-19 toolkits to informal traders in the Mother City. Each one of these toolkits is free and contains three litres of hand sanitiser, a social distancing mat to ensure customers stay 1.5m from traders, two cloth masks and a beanie, along with safety measures to be taken during this pandemic.

Immediately, this initiative raises questions of implementation and the accessibility that traders will have to these toolkits.

The City of Cape Town requires that informal traders register on the City’s trading database before being issued with one. This registration process needs traders to produce adequate paperwork, which includes a trading permit and a concession letter from the municipality. The Mother City has stated in an Eyewitness News report that receipt of this toolkit is on a first-come-first-served basis, as there are only a limited number available.

What we’ve seen so far in terms of relief schemes, is that they do not begin to adequately meet the social support needed during this time. The data suggests that many households are still battling to remain afloat and millions of livelihoods continue to be disrupted and left out of the conversation to rebuild the economy.

Minister of Social Development Lindiwe Zulu has indicated that the feasibility of a social relief package such as the Basic Income Grant (BIG) will be explored. Amid the rising unemployment rate and poverty levels, calls are mounting for the immediate implementation of a BIG. 

A long road worth taking

The economy is likely to take a while to recover from the devastating effects of this health crisis, but one thing that remains resoundingly clear is that we cannot go back to “normal” after this pandemic.

For one thing, what we have normalised is a structure that is not conducive to poverty alleviation and all-inclusive social development. The state has turned its back on a sector that not only makes a significant contribution to the country’s GDP, but has paved a way of life for millions of South Africans. Without this sector, many households would not have been able to avoid destitution in the worst of times.

The fact that the closing down of informal hawking has hit some harder than others, and that these happen to be the already vulnerable members of our society, is evidence of a need for more formal support of the informal sector.

There is no going back to “normal” because we can’t continue to “normalise” poverty and inequality. We have an ethical obligation to define a better South Africa – for everyone. DM/MC

*Not real names

Lelona Mxesibe is a researcher and budget analyst at the Studies in Poverty and Inequality Institute (SPII). Her research interests range from social justice and advocacy to economic policy reform.