CHAPTER 5 PAGES
3.5 Towards Policy Review/ An alternative approach
3.5.1 Alternatives to Macro-economic biases
The framework of the macro economic policies and new labour legislation is corporatist and relies heavily on European models (i.e. Keynesian model), despite the apparent differences in economic conditions between Europe and South Africa.
Unlike in Europe, South Africa has relatively lower levels of unionisation (30%) as compared to 60% unionisation in Europe (ALRN, 2006:7).
Furthermore, many employers in South Africa are not willing to cooperate and they do not face significant authoritarian pressure to comply either. The government has also adopted neo-liberal macroeconomic policies, which give significant power to capital and thereby to employers. Thus the labour legislation that has been adopted in this country is left without any impact in the face of massive retrenchments, outsourcing and casualisation of work.
Therefore, to avoid such social biases and the impact this has on the workers in the formal and informal economy requires greater social dialogue about the adverse effects of the country’s macroeconomic policy on human rights. To reverse the effects of GEAR, I argue for a possible core set of economic rights (i.e. reduction of poverty gap between women and men, between rural and urban areas; development of new focus on primary heath care; development of human resources capacity for many women and the engineering of growth through increased public expenditures on women focused social service provision).
These could combine the implementation and accessibility of human rights by women and men in and out of the labour market and at the same time ensure economic growth. These may be interpreted generally as the rights an individual (women in particular) should have with respect to the functioning of an economic system.
The foregoing would complement the areas of basic need highly utilised by women (i.e. housing, health care, food and water) in order to ensure that poverty, including its non-income aspects, is broadly addressed by GEAR. The realisation of these rights would require a fundamental transformation of the current South African economy.
Such a transformation requires inclusive decision making on what society and particularly the poor population’s economic needs are and how to distribute any outputs among the needs.
The decision on the foregoing cannot be entrusted to the market because the South African labour market ‚sanctions‛ the working poor phenomenon by both its economic and its labour policies. This is because wages in SA households are low relative to the cost of living. Moreover even if unemployment is halved to 13%, 35%
of the population might still live below the poverty line (Altman, 2007:32). This reveals a sobering picture about South Africa’s economic policy as accompanied by long-term unemployment and poverty outlook.
Therefore, decision making currently entrusted to the unequal market ought to be taken collectively through the democratic process and through continuing public discourse on what our national interests are, or what will best promote the social welfare of the society at large in the long run. The foregoing indicates that there is a need for context-sensitive research on the links between macroeconomic performance and the fundamental goals of raising human welfare for many women.
There is also a need to bridge the hiatus between theoretical and empirical findings and economic policy making (Mkandawire, 2001:23).
3.5.2 Conceptual and Measurement Issues in the Informal Economy Sector
As already stated in chapter 2 in this study, there are almost as many definitions of the informal economy sector as there are writers about this sector. It is because the phenomenon includes various and numerous kinds of activities, which make it hard for researchers to analyse labour market changes in many instances. The issues of definition and measurement could not be separated from each other.
Often policies which aim to create new economic opportunities and make the labour market flexible; focus on micro-enterprises only as part of informal sector economic activities. Such an approach to stabilization of the economy overlooks the fact that men own most micro enterprises affording them higher incomes. However women’s work in these enterprises is characterised by low incomes, unstable employment, high risk, long working hours and lack of regulation.
In many definitions a large number of workers that are involved in micro enterprises activities such as home-based workers, subsistence agriculture women workers, street traders and other categories of workers in the informal economy remain unaccounted for and invisible.
Thus promoting micro-enterprises can mean the continued marginalisation of many women within the economy and a failure to address the concrete sources of poverty and dislocation in the country. A different and beneficial socioeconomic policy approach would combine human rights (i.e. food & shelter and equitable distribution of resources) and economic rights (i.e. growth and labour market flexibility). This should be packaged as a means of social security (broadly defined to include incomes and productive assets) and should be utilised to capture the informal economy for purposes of measuring its size.
This approach should involve first locating the informal economy sector workers within the household through a household survey. Secondly, it should involve identifying the enterprises through these workers instead of lumping their enterprises into small and medium micro enterprises (SMME’s) that are recognised by the Department of Trade and Industry (DTI).