Upgrading for Growth

Upgrading for Growth

Report on Focus Group Discussions Held in Ekurhuleni Informal Settlements

1.Introduction

The focus group discussions that are reported here are a follow on from the quantitative baseline study that was done in three informal settlements in Ekurhuleni. The aim of conducting focus groups was to understand issues facing people in business and unemployed people in the informal settlements at a deeper level. Such qualitative research when conducted in a participatory manner provides insights that allow the researcher to “see the world through the eyes of the client.” The ultimate objective of such engagement is to incrementally work towards designing programmes and solutions to enhance livelihoods that will be “owned” by and fit with the abilities and preferences of the clients.

In planning for the focus groups, the incidence of business activity and unemployment formed the basis for deciding on the numbers of unemployed and business people to include in the research. These are tabled below.

The quantitative survey showed that there was a rather low incidence of business activity (on average 2.4% of residents were in business). Given that unemployment is high at 32.7%, understanding survival strategies and potential is critical to enabling household to grow beyond current poverty levels in the settlements.

This report lays out the objectives and methodology used in the participatory research process at the outset. This is followed by the key findings among unemployed people and people operating businesses in informal settlements. The findings are organised into profiles of the people, their survival strategies and business profiles, followed by the opportunities and needs which they articulated. The two final sections lay out our conclusions and preliminary recommendations. The recommendations are preliminary as this study is to be followed by a survey of supply side programmes available to people in informal settlements. The appropriate interventions to stimulate growth among people in informal settlements will then be modified in the light of available support.

2.Objectives of the Focus Group Discussion and Methodology

1. Gain a deeper understanding of business potential with regard to learning, increasing profitability, sustainability (diversification), competitiveness, innovation
2. Assess opportunities for employment creation through linkages among businesses – larger and smaller
3. Assess potential for further businesses to be started among the unemployed
4. Identify opportunities for increased employment and profitability through co-operation among small and micro-enterprises

The numbers of people to include and the structure of the groups was decided on the basis of the incidence of business activity and unemployment in the informal settlements. The table below shows the structure of groups in relation to businesses and unemployment per settlement.

John Dube / Bapsfontien / Payneville / Total
Count / Col % / Count / Col % / Count / Col % / Count / Col %
Self-employed (Informal) / 78 / 2.4% / 110 / 2.4% / 226 / 2.5% / 414 / 2.4%
Unemployed ( < 6 months in past year) / 207 / 6.4% / 366 / 7.9% / 653 / 7.2% / 1226 / 7.2%
Unemployed (> 6 months in past year) / 638 / 19.6% / 467 / 10.1% / 1013 / 11.2% / 2118 / 12.5%
Focus Groups Planned
Groups of Self Employed / 4 = 24 / 4 = 32 / 6 = 48 / 104
Groups of Unemployed / 4 = 32 / 6 = 48 / 6 = 64 / 144

As there are fairly high levels of homogeneity in the population – groups were be separated only on the basis of gender.

The recruitment for the groups was done by research facilitators who lived in each settlement. Venues for the discussions were selected to be as close as possible to the settlements. In two cases, (Bapsfontien and Payneville), the venues were far from the settlements and some of the business people were reluctant to come to the discussion. The facilitators also had some difficulties recruiting as people claimed to be tired of talking to government when nothing changes. Business people were also afraid of attending the discussions as they thought there may be some linkage to taxation and the small business tax amnesty.

The reluctance of attendees was resolved by moving the discussions to the shacks that were made available in the settlements. In the case of Payneville, the focus groups were moved to a shack that is used for community meetings. In Bapsfontein, a shack that used to be a shebeen was offered by a trader. Such authentic settings made for significantly better attendance at groups and participants were at ease in the surroundings.

The research process and findings were immensely enhanced by being where the people reside and operate.

The focus groups were run using a combination of group questions and participatory tools. The questions and the research plan are included as Annex One. The participatory tool was a matrix that was constructed using peoples articulated needs with respect to employment and business opportunity. They then use counters to prioritise their needs and in this way the group decides jointly and the researcher has the opportunity to probe into the rationale for their choices and priorities. In some cases, the tool worked very well and people participating in it found it gave them a perspective from which they felt they learned. In other cases, people were reluctant to participate and the toll was dropped in favour of getting down to a discussion about their needs and priorities.

During the focus groups, priority was given to people providing their own perspectives rather than being given choices.

3.Key Findings

This section has two parts. The first part presents the findings among unemployed people and the second part discusses the findings among business people. In the section on unemployed people we discuss the profiles of the group, their survival strategies, their preferences with respect to work or business, how they perceive opportunities and their support needs.

In the section on business people we describe the profiles and types of businesses of those who attended, their perceptions of opportunities to grow and diversify and their support and learning needs

3.1.Unemployed Men and Women

When thinking about unemployment in developing countries we need to make some distinctions about the types of unemployment which exist. In developed countries the distinction between the employed and unemployed is based on those who collect state benefits for the unemployed. In the context of developing countries, it is not always possible to collect benefits from the state or from unemployment insurance funds. For this reason, people cannot really afford to be unemployed in developing countries. Thus we speak of unemployment in relation to time periods (> or < 6 months) to distinguish the extent of work “habit’ and employability. The other distinction is based on employment and under-employment. As people cannot afford to be unemployed, they take on arange of survival strategies to simply survive. Such activities may provide the odd meal but does not constitute work which allows people to provide basic needs and growth of livelihoods. As state benefits are relatively recent in South Africa and still limited in social outreach, it is important to distinguish between survival strategies and livelihoods and limitations which exist. In fact in South Africa, there are substantial numbers of employed people whose wages cannot be considered as providing for a sustainable livelihood.

3.1.1.Profile

Of those who participated in the group discussions for unemployed people, there were very few older than 50. This is consistent with the quantitative survey results. The participants in the 40 to 50 year age group had very low levels of education and skills. Most of these however, did have some work experience. While the range of work experience was very broad, it was mostly low-skilled work, with a few exceptions such as crane and vehicle drivers, machine operators and unqualified artisans.

There were two distinct groups among the younger ones, in the 20 – 35 year age. They either came to stay with parents or husbands or they grew up in the settlement. There are significant differences between those who grew up in the settlement and those who migrated from rural areas. The ones who grew up in the settlement speak English more comfortably and many have some tertiary education which unfortunately,does not seem to be helping them to find jobs. The recent migrants appear to have a range of disadvantages in the job market. They have low levels of education, speak little English or Afrikaans and hardly any of them have any tertiary education.

In general the differences between men and women in the groups were not very significant. While men may be more assertive, they did not appear to be more skilled or better equipped for job markets than women. As would be expected the key differences were in the type of employment they seek and their ways of looking for work. Men usually seek work by going to firms or by standing by the side of the road. Women also go to firms but they don’t stand by the side of the road. Rather, women seek domestic work by going door – to - door. Both younger men and women, who have some education, seek employment by responding to job advertisements in newspapers.

Threetrends stood out among those who attended the focus groups. The first is that no one admitted to ‘giving up[1]’ i.e. that they have stopped looking for work. Those that are not well educated look for work by going door-to-door in residential or industrial areas or men wait by the side of the road. Those that are better educated use newspapers and the internet to seek work. The second is that the majority of the unemployed from outside Gauteng or who are over 40 years old are not able to communicate in English comfortably. This is not to say that English is essential, however people who can’t use the language are at a distinct disadvantage in the job market and the same would apply if they were to set up businesses.

The third and unsurprising pattern is that very few people do nothing or earn nothing at all. There were two exceptions to this. One group are mothers who receive child support grants, this group has their hands full with domestic responsibilities[2] and spend less time seeking income generating opportunities. The other group are young people who live with their employed parents. While all who participated in the groups claimed to be unemployed, they ‘admitted’ to a number of enterprise-type of activities or piece jobs in response to questions on how they survive on the absence of employment. Their survival strategies are discussed below.

There was only one group that were mostly foreigners. This group was from Mozambique and while they could speak Zulu they were unable to speak English or Afrikaans. There were very few other foreigners who attended groups. Clearly, it would not be considered safe for them to participate in such research as most are probably illegal. The perception of the South Africans was that the settlements had substantial numbers of foreigners. Howeverwhen theirperceptions were probed it appeared to be very uneven. While most of the South Africans did not seem to object to the presence of foreigners in their areas, they did however express disapproval of the low wages that foreigners were prepared to accept.

There were signs of malnutrition (approximately one third) and premature aging (very few) among some of the women who came to the focus groups. While the same proportion of men appeared to be very lean, there was little evidence of premature aging.

3.1.2.Survival Strategies

As stated above, there are very few unemployed people who can afford to not seek incomeregularly. Those who spend less time than others would be recipients of child support or young people whose parents are employed. It is important to note however, that family support plays a key role in enabling unemployed people to survive and meet the costs of seeking workregularly.[3] The majority of the unemployed are active seekers of full-time work or piece jobs. For example, if the men who stand by the side of the road in Bapsfontein are not picked up by midday, they seek other ways of earning something for that day.

The various means through which unemployed people bring in income can hardly be classified as regular or bringing in sufficient for a ‘living wage.’ The types of activities though do reveal some latent skills and also a sense of the real desperation which confront people in informal settlements. Among the survival strategies which showed the dire need among people, the range was from pushing trollies for a spaza shop owner for 50c per trip, fetching water for employed neighbours in the settlement, handing out pamphlets for R35 per day (from 9am to 7pm), doing washing and cleaning in a 3-bedroomed house for R30 per day to washing cars for R20 per car. Piece jobs such as washing cars and handing out pamphlets were very erratic and could not be relied on for steady income.

There are a small group among the unemployed that do receive different forms of regular income though it would be difficult to term these as “living wages.” This group includes women who work as volunteers for care giving NGOs (R1000 per month), and others who have erratic businesses. The latter include collectors of metal, glass, and paper which they sell to recycling plants and people who collect and sell firewood. There were a few “entrepreneurs” who showed some promise. These include playing music on weekends, repairing cell phones and computers, garden services and women who make and sell different foods periodically.

While there was a range of ways in which people brought in income erratically, most of the unemployed get piece jobs as labourers and men get work on construction sites or home repairs which gives them the opportunity to exercise untrained artisan skills.

The two key issues relating to survival strategies of the unemployed are that very few people can afford to not earn anything at all and that the range of survival strategies shows some promise with better organisation, (e.g. recycling and repair services)skilling up and entering the job market better equipped.

3.1.3.Work / Business Preferences

When unemployed people were asked what their preference would be in terms of earning income, the responses were fairly broad. People who had been in jobs for extended periods were clear that they were better suited to having a job rather than running a business. There were a number however who were interested in running a business if that would help them to survive.

Based on their struggle to survive and erratic income, clearly most people were reluctant to state categorically whether they preferred to be in a job or to run a business. Many said they would take a job if one was offered and then set up a business as well to make sure they could avoid being without regular income.

Despite their keenness to be in business, a large proportion recognised that there was already considerable over-competitiveness among existing businesses. Some of the unemployed had been in business and had failed. Those who had tried to sell clothing found that the local customer base did not have enough money to afford to buy clothing. Others had started up businesses that had great difficulty without fridges or other storage. E.g. One man related how he used to cook and sell pigs heads and then had no fridge to store those that he could not sell so he was forced to eat them. Generally lack of services came across as a major constraint to business start-up, operations and growth.

The biggest constraint to starting up businesses was firstly working out what type of business to set up in face of excessive competition. Secondly a number of people also talked about their lack of skills in establishing different types of businesses. Thirdly and the most frequently cited constraint was the lack of access to resources. None of those who were in the focus groups had any awareness of where or how to access resources for businesses. The most needed resource was money though skills, equipment and business rights and premises were also mentioned. A number of younger people stated that they would prefer to study further and acquire some technical qualifications before setting up a business. Those who were partially involved in micro-enterprises said that if resources were available they would invest in new equipment to expand and grow their businesses. (E.g. they would buy equipment such as fridges for meat sellers and lawnmowers for garden services.)

3.1.4.Opportunities

When identifying opportunities for themselves many of the unemployed tended to regress into the commonplace businesses they saw around them. Given that spaza shop and tuck shop operators and shebeens in the settlements seem to make an adequate to good living, it is easy to understand such attitudes. Simultaneously such perceptions reflect the limited life experiences in combination with a lack of education of people in informal settlements. Some did identify retail businesses which are likely to be more competitive and have greater potential. The latter include cell phone sales and repairs, butcheries and coal yards. Even if people get electricity, their perception is that coal stoves are preferred for heating and cooking. In addition, there was a further range of viable ideas which given the appropriate support could engender healthy livelihoods.