In 2020, Fairwork highlighted South Africa’s unique economic landscape, characterised by well-developed internet infrastructure, supportive regulatory conditions for innovation, high unemployment rates, a substantial informal sector, and extreme income inequality.
These factors have set the stage for the gig economy, a labour market comprising freelance and short-term jobs, where organisations contract with independent workers on a non-permanent basis, diverging from traditional full-time employment. This gig economy holds tremendous potential for addressing South Africa’s pressing socio-economic challenges.
South Africa’s workforce, consisting of a staggering 40 million working-age individuals, grapples with a critical issue – nearly 40% of it remains unemployed. Unemployment rates vary starkly across demographics.
The black population faces unemployment rates well above 40%, while the white population’s unemployment rate is less than 10%. Women experience nearly 45% unemployment compared to men’s 35%, and those under 25 face rates above 55%, whereas those older than 35 have rates below 20%. These disparities persist, intensifying economic and socio-political pressures for job creation.
The World Bank Group (2020) reports that over 55% of South Africa’s population lives in poverty, with approximately 25% experiencing food poverty.
Rising energy crises and food prices exacerbate the situation, pushing nearly 63% of the population below the upper-middle-income poverty line – affecting 1.8 million more people than before the pandemic. The cost of living has outpaced income growth, further straining households’ budgets.
In light of these challenges, gig work offers a glimmer of hope as it provides an avenue for individuals to access employment, even if on a short-term or freelance basis. It represents a lifeline for those grappling with unemployment and poverty.
Embracing the gig economy allows South Africa to harness the skills and talents of its population while promoting economic inclusivity.
Businesses wield significant influence in supporting sustainable development and addressing poverty and inequality. They are the engines of growth, capable of creating inclusive employment opportunities and providing access to essential goods and services.
Through their operations and initiatives aimed at reducing poverty rates, businesses can play a pivotal role in fostering economic progress.
One exemplary initiative making a difference is the Sisonke Group Purchasing Programme. This programme seeks to reduce the cost of essential product purchases through demand aggregation. Unemployed youth are trained as Community Marketers, tasked with raising awareness and capturing orders through a digital platform.
This technology-driven approach leverages the collective buying power of communities to secure bulk prices and optimise logistics. Local small businesses are engaged to deliver the ordered products, creating a mutually beneficial ecosystem at the community level.
South Africa faces the dual challenges of high unemployment and extreme poverty and inequality. The gig economy presents a promising solution, offering employment opportunities and economic empowerment for many.
By embracing initiatives like the Sisonke Group Purchasing Programme, businesses can actively contribute to reducing poverty rates and fostering inclusive economic growth. The path to a more equitable South Africa lies in harnessing the gig economy to empower its people and create a brighter future for all.
Article by: Tebatjo Mashotja