Economy / 2 October 2016, 11:17am / SINOLWAZI APRIL and NOLOYISO MTEMBU
Cape Town - Tougiedah Hendricks is a former clothing factory worker and now sells socks, caps and hats.
She has been trading since 2012 and with the little bit of money she generates, she supports her 86-year-old mother, a brother and a son.
Hendricks, 55, is one of countless South Africans involved in what is regarded as the second economy.
She said there were times she did not make a sale and went home empty handed.
“It’s not easy but I thank God for everything. He is my motivation to keep going even though at times get tough,” said Hendricks.
Another contributor to the second economy is Zubeida King, 49, from Delft, Cape Town. Bubbly and charismatic, she sells socks, tights and headbands at an informal trading area in Gatesville near Athlone. King is also the breadwinner in her family.
“My greatest motivation to keep pushing is my mother and son. I’m grateful for the little that I make. At least I’m not waiting around for things to be handed to me. I’m very independent, I like to do things for myself, I don’t like asking people for things that I can provide for myself.”
The term “second economy” might no longer be in use officially, but it is key driver of the country’s economic wellbeing. The second economy has been putting bread on the table for millions of South Africans.
It refers to economic activities that are marginal or fall outside of regulation and are typified by vulnerable forms of employment, explained Kezia Lilenstein, an economic researcher at the Development Policy Research Unit at UCT.
“This really speaks to fact that in South Africa we are experiencing a country of ‘two nations’ - it is as if the economy is split into two parts, made up of the included, wealthier individuals and the excluded, vulnerable individuals. This is apparent in the excessive levels of inequality in South Africa and the inability of the poor to utilise the labour market in order to break the cycle of poverty.”
According to Lilenstein, the second economy could include individuals who are unemployed, those in low-paid or part-time jobs, those unable to find full-time work.
According to Statistics South Africa, the informal sector is made up of employees working in establishments that employ fewer than five people, who do not deduct income tax from their salaries/wages; and employers, own-account workers and persons helping unpaid in their household business who are not registered for either income tax or value-added tax.
“Using the term 'informal employment' as a synonym for 'second economy', around 4.6 million, or 29 percent of the employed are informal workers,” Lilenstein said.
The Quarterly Labour Force Survey, a household-based sample survey conducted by Stats SA revealed that in 2016, employment was dominated in three industries: community and social services; trade; and finance and other business services. The survey report also revealed that larger proportions of Indians/Asians were employed in trade industry and the white population was employed in large proportions in finance and other business services and in community and social services.
The national Department of Economic Development was approached for comment but failed to respond by the time of publication.