Creating jobs and reducing poverty: why not enable the informal sector properly?

Author: Frederick Fourie

President Cyril Ramaphosa aims to set the country on a new path of growth, employment and transformation. Key to this are action plans for employment creation, to be deliberated at a jobs summit.

The South African Informal Sector: Providing jobs, reducing povertyA new edited volume, published by HSRC Press, flags the importance of explicitly addressing the informal sector in such initiatives, given the key role it plays in providing paid employment and reducing poverty. The book is based on research done in the Research Project for Employment, Income Distribution and Inclusive Growth (REDI3x3).

This research shows unambiguously that the informal sector is an important source of employment (and of paid employment), with a growing propensity to employ. Regrettably, for many decades the sector has remained forgotten or, at best, in the margins of economic analysis and policy consciousness. Many policy makers appear to group it together with formal SMMEs. Such an approach risks missing key elements of the ‘forgotten’ world of informal enterprises – their potential, the constraints they face, their particular vulnerability, and the policy support they need to be viable and self-standing.

How many jobs are created in the informal sector?

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The economic consequences of Luther: Ideas have legs, but some come with leg-irons

Johannes Wessels

500 Years after Martin Luther hammered his 95 theses to a church door in Wittenburg, Davide Cantoni, Jeremiah Dittmar and Noam Yuchtman saved their theses to the internet: Beliefs have economic consequences.

Old news, one might say, recalling Weber. But Weber’s thesis was always contested: assumptions of cultural traits based on unreliable statistics from the 19th C. Cantoni, Dittmar and Yuchtman (further-on Cantoni and co.) offer hard micro-statistical evidence from the century when Luther protested against Papal authority : 1517 was a watershed year in how people viewed the world and those (world)views had economic consequences.

In a National Bureau of Economic Research Working Paper of October 2017 they state: “the pre-Reformation era can be understood as an equilibrium in which a monopolist religious producer (the Catholic Church) provided political legitimacy to secular authorities at a high price—charged in the form of control over resources, tax exemptions, and some degree of political power. The Reformation represented a competitive shock in the market for salvation. Protestant reformers offered a popular, lower-cost alternative to the Catholic Church… This had implications for the allocation of resources between secular and religious uses…

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A stand against hierarchical tyranny: Luther’s protest has changed the world

Luther 500A small minority of people will be remembered and known beyond four generations (100 years): mostly by grandchildren and great grandchildren. A significantly smaller number of people will be remembered 100 years after their death for the impact they have had on developments in their countries. The fact that Martin Luther’s protest half a millennium ago against Papal indulgences and Roman Catholic theology and the Emperor was celebrated last week in Germany and most countries with a significant number of Christian believers, testifies to his role in breaking the mould of Medieval society contributing to the dawn of the Modern Era. Continue reading “A stand against hierarchical tyranny: Luther’s protest has changed the world”