The Covid-19 crisis and the South African informal economy ‘Locked out’ of livelihoods and employment

Type Working Paper - NIDS-CRAM Working Paper
Title The Covid-19 crisis and the South African informal economy ‘Locked out’ of livelihoods and employment
Issue 10
Publication (Day/Month/Year) 2020
There is widespread recognition, both internationally and in South Africa, that the measures to curb the spread of COVID-19 have impacted particularly negatively on informal workers, whose jobs are precarious, who often depend on daily earnings for survival, and who lack legal and social protections. However, it is also likely that these impacts have been experienced unevenly by different groups of workers within the informal economy. In many contexts, the current moment has been described as a ‘triple crisis’ consisting of a health, economic and care crisis that impacts on women more than men. This paper analyses the first wave of the NIDS-CRAM survey in order to identify how the effects of the COVID-19 crisis differ within the informal economy and, in particular by gender and type of employment (by self-employment, informal wage employment and casual employment). We find that just under a third (31%) of informal workers who did not lose their livelihoods completely, were ‘locked out’ of employment in April - compared with 26% of those in formal employment. Among those who were employed informally in February and April, women in the informal economy saw a decrease of 49% in the typical hours worked in April while men in informal employment saw a 25% decrease in typical hours. The decrease in hours worked within the informal economy was greatest for the self-employed where average hours decreased by a third and typical hours decreased by more than 50%. Not surprisingly, these large reductions in hours coincided with earnings losses in the informal economy. Among the informal self-employed who were working in both months, average earnings decreased by 27% and typical earnings by 60%. For women in informal self-employment, typical earnings decreased by nearly 70% between February and April. These findings suggest that, as the pandemic unfolds in South Africa, current interventions need to be significantly scaled-up and far better targeted at informal workers, in general, and women informal workers in particular.

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