Although the latest Statistics South Africa Quarterly Labour Force Survey results suggest that the number of employed young people has increased for two consecutive quarters, employment remains considerably lower than before the Covid-19 lockdowns. Additionally, the economic recovery continues to favour contract jobs over permanent employment as companies hedge against further uncertainty.
Globally, slow job growth accompanied by a high number of labour market entrants has meant that young people have been doing informal “side” work to make ends meet. Across the African continent, the concept of a “side hustle” is not new. About 63% of the labour force in Africa is involved in some type of self-employment. Analysis by the Harambee Youth Employment Accelerator suggests there are about 1.2 million young micro-entrepreneurs in South Africa’s informal sector, a number that is set to grow because of circumstances that demand resilience.
We need to prioritise growing sectors that hold promise for young people such as the global business services sector, which continues to buck the youth unemployment trend. But we also need to rewire our systems towards greater inclusion and less precariousness for young people.
Young people enter the informal sector out of necessity and opportunity. Forty percent of participants in Harambee’s research said they couldn’t find a job and that hustling was their only option. At the same time, 36% had entrepreneurial aspirations or saw an opportunity in the market. The data suggests that young micro-entrepreneurs’ income is irregular and volatile, with monthly figures ranging from R200 to R4 000. For example, providing services such as braiding hair or digital support earns young hustlers a lot more profit than selling goods such as snacks and clothes.
There is also a sense that hustling offers flexibility. For example, research on young people in Zandspruit, Johannesburg, by Hannah J Dawson of the University of the Witwatersrand, says “hustling had the advantage of giving youth more control over what they did with their limited resources”.
However ambitious their intentions, young people face barriers that prevent them from entering micro-enterprises. Structural factors such as lack of suitable premises, equipment or perception of insufficient customers hold young people back. They also feel discouraged by friends and family who say it is a bad idea. Young people say that people in the informal sector are often judged, looked down on and not taken seriously.
So, although hustling represents an essential source of resilient income for young people, investment and support is required to ensure their income is consistent and to reduce barriers to entry.
Schools, financial institutions and the government have to reconfigure themselves to adapt to the world of side hustles to make these opportunities work for young people.
First, education and training institutions must shift to keep up with young people’s realities. Schools and colleges should offer entrepreneurship training and financial literacy and encourage side hustles as part of their curriculum — to encourage savings, make a profit and to avoid predatory lending behaviours that can entrap them further.
Second, financial services institutions should keep up with the times. There are many examples of young people who struggle to get products that suit their circumstances, whether loans and start-up capital or products to improve their businesses. Again, these products need to be accompanied by the basic financial literacy training a young entrepreneur needs to sustain and increase their hustle. Companies such as A2Pay and Yoco plug in gaps in our informal economy, enabling their growth with much-needed payment solutions. But more investment and innovation in this space is required.
Last, public institutions and labour market platforms need to reconfigure to this “new normal”. Outdated ideas inform everything about what labour market institutions believe constitutes work.
Consider Tshepo Napyane, who matriculated in 2012 but couldn’t afford to study further. He moved from one short-term job to the next while looking for permanent work. He eventually opened a car wash business in his neighbourhood. He washes about five cars a day and uses the income to buy data so he can continue to apply for jobs online and to contribute to his family’s income.
“The reality is that jobs are scarce, so creating another source of income is a great way to keep you active while looking for a job,” he says.
Can you imagine if Tshepo and the millions of young South Africans like him, with drive and passion, could obtain the support they need to develop their good ideas into something sustainable, rather than thinking of their hustle as a stopgap until something better comes along? Imagine if they could get the right investments at the right price to turn their precarious hustles into thriving small businesses.
Unless we listen to our young people’s problems, the system will continue to entrench the barriers to entry to ongoing economic participation.
Published in Mail & Gurdian