All workers in South Africa, but particularly workers in the informal economy, lost incomes and livelihoods during the COVID 19 lockdown begun in March 2020. Pat Horn outlines the important work of NEDLAC’s Rapid Response Task Team in providing some relief for workers and in mapping a way forward through an economic recovery programme.
Impact of COVID on informal economy
When the President announced the imposition of a hard lockdown for three weeks starting from 27 March 2020, all workers who were not essential workers or able to work from home had to stop working. For the 10,8 million formally registered workers, government made interventions to ease the financial pressure on workers who were either not able to work or forced to work reduced hours.
Workers in the informal economy in South Africa, in agriculture and the restaurant sector, domestic work, waste reclaimers in the streets and on landfill sites, street and market traders, home based craft and garment, and community care workers, taxi drivers, and artisanal fishing, number a further just almost 5 million workers. According to official government statistics (QLFS Quarter 1 2019) they are 29.5% of working South Africans.
Some informal workers have employers, but are informally employed because they are not registered for UIF (Unemployment Insurance Fund), COIDA (Compensation for Occupational Injuries and Diseases Act), or any other employment related social security schemes. This is true for the majority of domestic, agricultural, and taxi workers, whose employers are not compliant with labour laws, including the BCEA (Basic Conditions of Employment Act) and Sectoral Determinations which lay out basic wages for different sectors. At least 18.8% of all workers who have an employer are informal in this sense.
The rest of informal workers are own-account (self-employed) workers. They numbered 1,774 million nationally before the start of the COVID-19 lockdown in March 2020. They do not enjoy any social protection beyond universal grants such as a state pension, and disability grant.
New forms of work, such as ‘platform’ work based on internet platforms and easily-accessible popular Apps are increasingly common especially in the services sector. These workers are often called ‘the new informal’. This is due to the fact that, globally, these new forms of work are informal, according to the description of the informal economy in the International Labour organisation’s important 2002 Resolution on Decent Work and the Informal Economy. In Clause 3 the Resolution says: “The term “informal economy” refers to all economic activities by workers and economic units that are – in law or in practice – not covered or insufficiently covered by formal arrangements”.
This means that many workers engaged in these new forms of work become own-account workers. They are usually under-employed or unemployed workers who cannot find employers to sell their labour to, nor can they succeed as entrepreneurs in small enterprises. They are joining the growing numbers of own-account workers across the world. This has accelerated since the COVID-19 crisis hit us.
Ever since the first Presidential announcement about the lockdown, the South African government has recognized the vulnerability of these workers who are not covered by the UIF and it promised to set aside funding and introduce measures to relieve their distress. As early as 20 March 2020, informal worker representatives called on government to make urgent arrangements to assist with financial reserves and establish a Living Cash Grant to all informal workers, regardless of nationality. They hoped that a cash grant would enable vulnerable informal workers to comply with government calls to self-isolate, without losing their livelihoods, and so survive the worse times to come.
The Special COVID Income Grant of R350 per month for 6 months for those who lost their livelihoods was finally announced 4 weeks into the lockdown. It was much less than hoped for, but it was another 6 weeks before the first workers started to receive their benefits in mid-June 2020, due to major administrative inefficiencies. Consequently, in contrast with the workers in the formal economy who could claim TERS (Temporary Employment Relief Scheme) benefits from the UIF, most informal workers went back to work if possible, in order to earn a livelihood.
All workers who returned to work faced massive health risks. Workers with employers demanded proper PPEs (personal protective equipment) from their employers. Those without employers had to choose between their health and their livelihoods. “Is it really worse to die of COVID than to die of hunger?” people asked. Most workers had to provide their own PPEs, as PPE donations supply chains were disrupted by widespread corruption.
Work of Rapid Response Task Team
NEDLAC (National Economic, Development & Labour Council) moved quickly and established a Tripartite-Plus Rapid Response Task Team (RRTT). The social partners met weekly online to tackle the urgent challenges confronting government, organized business and labour, and community. Over time they developed speedy solutions to the crisis.
Issues tackled by the RRTT included:
- relief of distress measures for businesses and workers
- OHS (Occupational Health & Safety) in workplaces
- loan guarantee schemes,
- re-purposing of local production to meet new needs and markets
- PPE supply and procurement
- government State of Disaster Regulations and Directions
- adaptation of workplaces to make them Covid safe,
- return to work in line with the 5-level risk-adapted strategy developed after the State of Disaster had to be repeated.
The RRTT space was useful for bringing together government officials who were normally difficult for the social partners to engage or be accountable. This included the UIF Commissioner – eventually dismissed by the Minister of Employment & Labour for failing to deal with administrative problems in the UIF and TERS.
Many workers in the informal economy wanted to return to work because they could not rely on the Special COVID Grant. The NEDLAC partners secured an amendment to the State of Disaster regulations on 4 April 2020 which permitted informal food vendors to go back to work. This provided partial but crucial livelihood relief. Thereafter, more and more sectors were able to return to work as the risk-adjusted strategy progressed. The RRTT monitored and reported on progress.
However, some government departments did not attend meetings where they were needed, or they did not follow through after meetings of the RRTT where undertakings were recorded. Some workers received relief measures as promised. But many workers, both in the formal and informal economy, did not. Problems remained unresolved in the administrative systems they relied on – both in the UIF and the SASSA (SA Social Security Agency) systems.
Economic migrants, refugees and asylum-seekers were excluded from many of the relief schemes and economic stimulus measures. Many workers in the formal economy did not receive TERS benefits for different reasons. Three million workers lost their jobs between February and April 2020, and one in five experienced weekly hunger as the NIDS-CRAM Wave 1 Synthesis Report reported in July 2020 (download at https://cramsurvey.org/reports/ and https://www.datafirst.uct.ac.za/ )
Many informal workers went back to work, only to find that their market were no longer as before, and their daily incomes are now much lower. More workers have to ‘hustle’ to make a living as secure employment declines, increasing the informalisation of work at the expense of decent work standards.
All social partners in the NEDLAC RRTT recognize these problems. In the negotiations on economic recovery which begun in July/August 2020 there was consensus on the need to address the harsh new labour market realities. Workers in the informal economy were noticed and recognized much more than before. Government authorities noticed that economic activity in the informal economy can start up more quickly, with smaller capital inputs, than large formal businesses which have collapsed. There is consensus on the need for an inclusive economic recovery programme, and on the importance of reducing widening inequalities in the economy.
However, the economic recovery programme was negotiated in the context of a massive backlog of un-implemented signed commitments negotiated in the Presidential Jobs Summit in October 2018. Its implementation was the responsibility of the tripartite-plus Presidential Working Committee and a range of working groups, also part of NEDLAC. Many elements of the economic recovery programme are in fact Jobs Summit commitments that still need to be implemented.
The following gains were included in the economic recovery programme adopted by Parliament:
- Green economy: Waste picker integration and revitalization of buy-back centres and operationalisation of landfill sites
- Consolidated buying linked to additional social relief of distress through market linkages and ensuring more support to emerging small-scale farmers
- Skills development and transformation with a particular focus on black industrialists, women, youth and disability;
- Reskilling and upskilling to embrace digitalization and mitigate retrenchments
- Lowering barriers to entry to make it easier for businesses to start, grow and compete
- Addressing racial, gender and geographic inequalities which hamper deeper economic growth, inclusiveness and greater economic impact.
The wording of what was agreed is weak, general, and not very grounded in focused implementation strategies. Changes of mindset and old habits must happen to ensure that informal work start-ups are not frustrated by bureaucratic red tape and forced to operate secretly, or even close down. It remains to be seen how far the lives and livelihoods of workers will be protected and secured in the roll-out of the economic recovery programmes.
It is the lack of better short and medium-term alternatives which will drive the ongoing struggles in NEDLAC to improve the lives and livelihoods of workers, rather than dramatic achievements or life-changing victories.
The need for collective organization of workers is more important than ever. There is a pressing need for workers to rely on their own resources, and unite across their different places in the ever-evolving formal and informal labour market. This is necessary in order to develop a strong collective self-sufficiency and an effective worker-controlled solidarity economy.
Pat Horn is Coordinator of Women in Informal Employment Globalising and Organizing’s (WIEGO) Collective Bargaining Project and a National Economic and Labour Council (NEDLAC) Community Constituency representative.
About the author
Coordinator of Women in Informal Employment Globalising and Organizing’s (WIEGO) Collective Bargaining Project and a National Economic and Labour Council (NEDLAC) Community Constituency representative.