Shattering the myth of high unemployment rate: Why 29% closer to 12% – GG Alcock

High unemployment is commonly quoted as the rationale for emigration from South Africa. However, look beneath the official statistics and you will note a vibrant financial system constructed by tens of hundreds of small enterprise operators and entrepreneurs. That is the message that GG Alcock, who calls himself a white Zulu after being introduced up in a rural group, is bringing dwelling to economists. His number-crunching makes for fascinating studying. Trying on the particulars of the road distributors and small-time landlords, the incomes being generated are pretty spectacular – and definitely not simply subsistence dwelling. GG Alcock reckons it’s time to take a contemporary have a look at the South African economy and realise that the statistics being bandied about can’t be true. – Jackie Cameron

By GG Alcock*

Within the crescendo of shock and horror about unemployment of 29% I have to disagree with these numbers.

These numbers ought to be prefaced by the phrase “formal” unemployment.

I’ve written in regards to the big scale of casual companies at some size in my books Kasinomics and Kasinomic Revolution. There are a mess of casual and kasi companies – some small, some fairly giant – which aren’t measured in unemployment stats.

That is for just a few the explanation why they don’t seem to be thought of:

1. They aren’t measured by formal analysis;
2. They’re thought of survivalist or subsistence enterprise individuals who would on the drop of a hat settle for a proper job if they may have one (which is complete bull);
3. They don’t contemplate themselves employed as they don’t have a payslip or work for a boss which defines what a job is, they are saying “anginamsebenzi, ngiyasebenza”;
4. They function in an off-the-cuff and largely invisible financial system, effectively invisible to the formal world. The previous Minister of Small Enterprise even mentioned “we have to create extra entrepreneurs within the township”. Astounding there are tens of hundreds of entrepreneurs and micro companies on the market within the casual and kasi sectors.

In a current Kyknet present on the casual financial system and youth unemployment the programme requested me to help them to interview some younger entrepreneurs. One I linked them with was a woman from Limpopo who sells vetkoek in downtown Joburg. This younger 24-year-old sells 6,000 vetkoek a day for R1 every and employs 5 employees, one her brother. She turned to vetkoek promoting as a result of she couldn’t discover a formal job. She positively was not measured as employed within the stats nor have been her 5 employees.

What about revenue producing actions, are these seen as jobs? I wrote in Kasinomic Revolution a few gogo who earns round R1,600 a month in outdated age pension. But she rents out a shisanyama and a hair salon in entrance of her little home for R1,500 every and three backrooms for R1,200, R900 and R900. So, she earns an extra R6,000 a month from rental. Let’s briefly have a look at the kasi rental sector. The immigrant spaza sector hire their shops from South Africans, paying between R2,500 to R25,000 for the shop rental relying on the dimensions. I estimated the rental revenue to South Africans is within the neighborhood of R30bn a 12 months. That’s loads of good cash being earned. Pity this isn’t featured in xenophobic rants about immigrants taking jobs.

And backroom rental? Virtually each single township dwelling has a again room, a garage-sized room rented or occupied by prolonged household and infrequently a mixture of each. I estimated that over and above the rental of spazas, backroom residential rental brings in one other R20bn a 12 months.

So are the greater than 20,000 hair salon homeowners employed or are their stylists who in kasi type hire stations from the salon proprietor in a gig financial system sort association. They aren’t employed however every stylist who rents a station within the salon is self-employed making something from R5,000 to R15,000 a month in styling, nails, extensions and so on.

What in regards to the quick meals sector within the townships, what I name kasi kos with 50,000 retailers promoting kotas, amaplati, inhloko, isibindi, isishebo, burgers, rooster mud, mogodu. A sector using 200,000 odd employees “informally” and turning over in extra of R85bn a 12 months. Are all of them unemployed?

Or the muti sector, inyangas and sangomas shelling out natural plant primarily based concoctions estimated in 2004 to be price R3bn a 12 months and using 150,000 plus herbalists.

What in regards to the college mamas, the varsity tuckshops of the townships, I wrote in Kasinomic Revolution of a woman in Thembisa who has been promoting meals and snacks on the similar college for 26 years, incomes R6,000 a month in income. She has put her two youngsters via college and her husband has been unemployed the entire time. There are 12,000 odd township faculties every with 5-Eight college mamas, if every solely earn R3,000 a month (the minimal wage for domestics) then that may be a sector price simply R2bn a 12 months in incomes. However these college mamas are unemployed, aren’t they?

I’m not even going to say the auto sector with its kasi mechanics, panel beating, automobile washes and so on.; nor the tavern sector; nor the township constructing and assist sectors similar to electricians, plumbers, builders, tilers; nor the web cafes or goat farmers; I can go on.

We’re NEVER going to create one million jobs within the formal sector regardless of how many electoral manifestos or authorities guarantees are made on this regard. Initiatives just like the YES programme are designed to encourage mentorship, internship and job learnership alternatives within the formal sector which is shedding jobs. Why would you get a job shadowing or intern alternative at Commonplace Financial institution whereas they’re closing branches and retrenching employees for instance. WTF.

The casual sector is remarkably much like the gig financial system. Whereas governments and municipalities try to control or restrict AirBnB, Uber and so on these are the economies of the longer term which ought to be supported (and taxed) as the longer term employers and economies.

The casual sector is the place the chance is, we have to deliver the casual financial system into the formal financial system, not by formalising however by creating fostering and development environments.

My easy place to begin and three steps to addressing formal unemployment is about rising and giving safety to the casual sector in order that it might probably develop, in order that it might probably formalise, in order that the members have safety and thus make investments extra into their companies, and so that there’s an incentive for this financial sector to pay hire, tax, PAYE and so on:

1. Give safety of tenure via a PTO (permission to occupy) sort mechanic, to casual merchants and in change cost rental. An astonishing instance of that is the Warwick Avenue Market in Durban with work carried out by the Asiye Etafuleni organisation in cooperation with the municipality.
2. Enterprise capital sort credit score for small companies permitting them to develop; get inventory and develop. Utilising completely different means to measure credit score worthiness and profitability to present fashions. For example, the vetkoek vendor I described purchases 50 x 12.5kg baggage of flour every week from an area wholesaler. It is vitally straightforward to measure these enter prices and do a easy extrapolation to calculate margins and as such valuate these companies for credit score.
3. BEE sort mannequin for immigrant merchants. These merchants are going nowhere, let’s deliver them into the financial system and allow them to add worth. This easy mechanic would supply, enterprise licences, residency and so on in change for the outlet following a BEE sort code incomes factors for e.g. pay VAT and Tax, pay rental to a South African at a set rental charge, make use of x quantity of South African employees,  procure safety, transport providers and so on from a South African small enterprise.

I reckon actual unemployment i.e. the place the particular person has no revenue producing alternative or revenue for any type of everlasting work, might be nearer to 12%. Show me incorrect in case you can?

As an alternative of banging our heads in opposition to the formal sector wall doing the identical factor again and again anticipating a special end result why don’t we search for options which help the largely casual Kasinomic sector? The financial system doesn’t belong solely to the formal sector. Put together for a Kasinomic Revolution.

• GG Alcock has been at occasions a shebeen proprietor, political activist, group employee and African adventurer, and extra not too long ago the founding father of Minanawe Advertising and marketing, a number one advertising and marketing company within the mass market