More than 320 000 new hawkers?

More than half the 658 000 jobs claimed by Statistics South Africa’s Labour Force Survey as having been created in South Africa in 2004/05 were in the informal hawker sector, leading critics to question Stats SA’s definitions and measurement of informal employment.

The head of the Congress of South African Trade Unions’s fiscal, monetary and public-sector policy unit, Neva Makgetla, said that an examination of the figures showed a 30% increase in hawkers in the past six months. It was difficult to justify calling these new jobs.

‘There is probably something wrong in the numbers,” said Makgetla. ‘The informal sector stats are bizarre and I would put it down to a definitional problem.”

Makgetla said it was difficult to believe that so many people had suddenly decided to start trading on the streets. It was more likely that vendors previously ignored in surveys had now been included. ‘It’s not as if anything has changed. If the government had a programme to support informal traders, I might be more inclined to accept the figures.”

Makgetla said the definition of unemployment in the informal sector needed to be scrutinised more closely and that South Africa should be taking a closer look at income distribution.

‘How do you define who is employed?” she asked. ‘If you go to a bus stop and sit behind a bunch of tomatoes every day, are you employed?”

Merrill Lynch economist Nazmeera Moola said many people who were hawking were underemployed and that a rise in hawking should not be regarded as job creation, rather as a measurement error.

‘A lot of what people are doing is not what they want to be doing, and is hardly enough to feed them,” said Moola.

She added that it was very difficult for the government to create jobs for the unemployed while raising the minimum wage. ‘There is a danger of doing too many things at once. I would rather focus on creating jobs for the unemployed. It is very difficult to create well-paid unskilled jobs.”

According to Makgetla, 35% of people working in the formal sector and between 70% and 80% of those in the informal sector report earning less than R1 000 a month.

The survey highlights significant employment growth in the trade, construction and finance sectors, while mining, agriculture and manufacturing have experienced job losses in recent years.

Critics argue that job creation in construction is driven by South Africa’s favourable economic performance and resulting residential investment, and that unless the focus shifts to infrastructure development these jobs may not be sustainable.

But as Makgetla remarked, although some of the jobs created in construction might be temporary, at least they were real.

‘Most of the jobs have been created through housing, but there is the hope that they will shift across to infrastructure development,” she said.

Despite 658 000 jobs created between September 2004 and September last year, there was a marginal increase in the rate of unemployment from 26,2% to 26,7%.

Stats SA has pointed to the increase in discouraged workers who have returned to actively seeking employment as a result of the solid economic growth rate of about 5% last year.

But, when the unemployment rate dropped in 2001 and 2002 as more workers became discouraged, Stats SA did not highlight this factor and was now using it to put a positive spin on the unemployment rate, Makgetla said.

Although unemployment among South African men steadily decreased between 2001 and 2005, the unemployment rate among women increased over the survey period.

Debbie Budlender, a researcher with the Community Agency for Social Enquiry, said more women who were previously discouraged jobseekers might actively be looking for work again. Women who had previously felt it was not worth looking for work and stayed at home to look after their children might have been emboldened by the economic climate.

Between September 2004 and September last year, the number of women classified as discouraged workseekers decreased substantially, from 16,5% of the population of working age to 13,9%.

‘More women are out trying to get jobs, as they feel they can be absorbed into the economy,” said Moola.

According to the survey, Gauteng was responsible for half of the new jobs created, while the Free State, Mpumalanga and Limpopo experienced a substantial rise in unemployment rates.