Informal Economy/Sector

The document argues that South Africa's informal economy, which employs 4.5 million people, is characterized by low incomes and poor security. It criticizes state-led repression and the narrow focus of micro-enterprise support, proposing instead a transition toward formalization through the implementation of ILO Recommendation 204. Key recommendations include amending the Labour Relations Act and Basic Conditions of Employment Act to recognize own-account workers as workers, enhancing labour inspectorate capacity, and providing basic infrastructure for those working in public spaces. The brief specifically highlights the need for inclusive policies in informal retail and waste recycling, suggesting that corporate responsibility and innovative financing, such as Extended Producer Responsibility levies, be leveraged to support these sectors.

• Informal employment in South Africa is extensive, with 4.5 million people in this category: 2.8 million in the informal sector, 1.3 million as domestic workers, and 400,000 in the formal economy under precarious conditions.
• Informal workers face severe financial exclusion; in 2013, 97% of those interviewed had no access to credit facilities or asset finance, and only 21% possessed a bank account.
• The document advocates for the implementation of ILO Recommendation 204 (R204), which provides a framework for the transition from the informal to the formal economy, including the recognition of public spaces as workplaces and the extension of social insurance to informal workers.
• Legal reforms are required to extend rights to own-account workers, specifically by amending the Labour Relations Act (LRA) to allow their trade unions to register and bargain collectively with government institutions.
• In the waste recycling sector, informal workers are critical to the value chain, with approximately 60,000 waste pickers supplying formal companies like Mpact, Consol, and Universal Recycling, an industry generating R15 billion in revenue.
• Large corporations such as Unilever, Coca-Cola, and Anheuser-Busch InBev rely on informal retailers for distribution but often avoid responsibility for the protection of workers in their value chains.

APA

Alfers, L., Barrett, J., Pillay, V., Rogan, M., von Broembsen, M., & Skinner, C. (2018). Informal Economy/Sector. Institute for Economic Justice. https://iej.org.za/wp-content/uploads/2020/07/Stream-3-Policy-Brief-1-Informal-Economy-Sector.pdf

Chicago

Alfers, Laura, Jane Barrett, Vanessa Pillay, Mike Rogan, Marlese von Broembsen, and Caroline Skinner. Informal Economy/Sector. Institute for Economic Justice, 2018. https://iej.org.za/wp-content/uploads/2020/07/Stream-3-Policy-Brief-1-Informal-Economy-Sector.pdf.

Wikipedia

{{cite report |last1=Alfers |first1=Laura |last2=Barrett |first2=Jane |last3=Pillay |first3=Vanessa |last4=Rogan |first4=Mike |last5=von Broembsen |first5=Marlese |last6=Skinner |first6=Caroline |title=Informal Economy/Sector |publisher=Institute for Economic Justice |date=August 2018 |url=https://iej.org.za/wp-content/uploads/2020/07/Stream-3-Policy-Brief-1-Informal-Economy-Sector.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{alfers2018informal, author = {Alfers, Laura and Barrett, Jane and Pillay, Vanessa and Rogan, Mike and von Broembsen, Marlese and Skinner, Caroline}, title = {{Informal Economy/Sector}}, institution = {Institute for Economic Justice}, year = {2018}, month = aug, url = {https://iej.org.za/wp-content/uploads/2020/07/Stream-3-Policy-Brief-1-Informal-Economy-Sector.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }