How the global economic crisis reaches marginalised workers: the case of street traders in Johannesburg, South Africa

Abstract

This paper explores the effects of liberal macroeconomic policies and the economic crisis on informal street traders. Street traders are linked to financial markets and the crisis primarily though demand conditions: slower growth and over-trading translate into lower profits. Field research indicates that female traders' households rely significantly more than male traders' households on income generated by trading.

Keywords:

• informal economy
• street trading
• South Africa
• economic crisis

Notes

1. There are some known problems with the LFS data, which may result in under-counting informal activity (see Devey et al. [2003] and Webster et al. [2008] for more information on problems with the LFS). However, these data are the best available at a national level.

2. The official unemployment rate includes 3,945,000 ‘[p]ersons aged 15–65 who did not have a job or business in the seven days prior to the survey interview but had looked for work or taken steps to start a business in the four weeks prior to the interview and were available to take up work within two weeks of the interview’ (Statistics South Africa 2007, 210)

3. The expanded definition here includes those classified as officially unemployed, and 3,425,000 ‘discouraged work-seekers’, defined as ‘[p]ersons who want to work and are available to work but who say that they are not actively looking for work’ (Statistics South Africa 2007, 210)

4. The research was carried out by the author under the Corporate Strategy and Industrial Development Research Programme (CSID) at the University of the Witwatersrand, Johannesburg, South Africa. The Office of the South African Presidency provided the funding for the field research discussed in this article, through its Second Economy Strategies Project, administered by the Trade and Industrial Policy Strategies (TIPS). The project is part of the author's dissertation research for a PhD in the Department of Economics at the University of Massachusetts in Amherst, MA, USA.

5. Most traders were unwilling to take loans from banks, in part because they felt that their businesses are vulnerable and loans were too risky. See also Cichello (2005).

6. The median monthly business income for a female trader was R1200 ($120 at the time of the interview), while for male traders the median was R1000 (US$100 at the time of the interview).

7. The income data are to be treated with caution, as some traders were unable or unwilling to disclose earnings.

Additional information

Notes on contributors

Jennifer Cohen

Jennifer Cohen is a PhD Candidate at the Department of Economics, University of Massachusetts, and Visiting Scholar, Corporate Strategy and Industrial Development Research Programme, University of the Witwatersrand, Johannesburg, South Africa