Signs of ‘modern slavery’ in the township economy.
In late February, Leif Petersen was on Radio Islam and Metro FM to discuss informal micro-enterprises and signs of 'modern slavery' in the township economy. This follows a published article written in conjunction with Andries du Toit of PLAAS, having gained traction on various online news platforms such as The Cape Argus, Daily Maverick, The Herald Live, Moneyweb, The Conversation and Biznews.com. The key findings in the article suggest that although informal township businesses bring important social benefits to local South Africans, they continue to bypass labour regulation laws. The spaza shop sector particularly, has witnessed an emergence of a new class of spaza shop owners who we describe in the paper as ‘informalists’. Informalists capitalize on the concessions granted to micro-enterprises in the township economy, however commonly operate at a scale where they should be obliged to fall under the auspices of the regulatory framework, for example, employing staff under the prescribed conditions of the BCEA.
While many of these new informalists businesses are operated by non-South Africans, the crux of the matter should not be reduced to the simplistic replacement of local spaza shop owners by foreigners. Instead, we argue that one should carefully engage with the very structure of the spaza shop sector itself. Most South African and foreign spaza shop employees work under poor conditions earning less than the stipulated minimum wage. The South African government needs to create a regulatory framework that promotes fair trading and inclusive growth to avoid creating conditions that allow the evasion of regulations by informal businesses. Those that stand to lose are not only traditional spaza shop owners, but the spaza shop employees - both South African and foreign - who are vulnerable to exploitative work conditions. A more detailed discussion can be found here.
Do not forget to tune in on Classic FM, Leif Petersen will be discussing the township economy on the 9th of March at 18:00.