Research & Innovation 2015-16 - Page 38



Newsbytes
How can we grow
employment in South Africa?
One of the greatest challenges in postdemocratic South Africa is massive
and growing unemployment. In a
country with substantial resources and
a government that claims to be serious
about addressing the issue, this lack
of progress is not only troubling, but
puzzling.
The data remain controversial, but
even the more optimistic projections
show that large-scale unemployment
will remain an issue, even under
rapid-growth scenarios. According
to one estimate, the South African
economy would have to grow at an
average rate of 7% for about 15 years
in order to reach the average global
employment rate.
Economic impact of
informal sector not to be
underestimated
‘missing middle’ has previously
been recorded as experiencing
no growth. But the Unilever
study found that people in this
‘survivors’ category do not
present their full earnings to
official government sources, for
fear of losing their access to the
grants. This unrecorded income
draws a new picture of economic
activity in the informal sector.
Building on existing research into
consumer markets, the University
of Cape Town’s Unilever Institute of
Strategic Marketing has uncovered
hidden consumer markets
in a study titled Connecting
with Survivors. The research,
which focused on those whose
household income is less than
R6 000 a month (referred to as
‘survivors’) attempts to understand
the significant role the informal
sector plays in growing the
country’s GDP. The study revealed
a far higher rate of economic
activity in this sector than has
previously been recorded.
The research was conducted
in Tembisa and Ivory Park,
situated between Pretoria and
Johannesburg, and found that
there is on average one enterprise
for every 10 households, and more
than one million unregistered and
‘mostly unrecorded’ enterprises
countrywide.
Since 1994, economic activity
has gone up slightly among
the poor, due to social grants;
while the upper end of the
market has experienced
massive growth. The so-called
Sourced from Cape Connect: a
joint project between the Centre
for Film and Media Studies,
and the Poverty and Inequality
Initiative. Image by Vgrigas,
Wikimedia Commons.
33 UCT RESEARCH & INNOVATION 2015–16
In Towards Employment-Intensive Growth in South Africa, edited by Anthony Black, professor
in the School of Economics, a
common thread that joins the
various chapters is what policies
are needed to steer the economy onto a more employment-intensive growth path. There is
not one single policy change
that will achieve this, says Black.
What is needed, rather, is a host
of small and large interventions
in all sectors of the economy,
perhaps underpinned by an ‘employment compact’.
Towards employment-intensive
growth in South Africa by
Anthony Black is published by
UCT Press.

UCT PressWikimedia Commons





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