The role of family in the township informal economy of food and drink in KwaMashu, South Africa

Abstract

Purpose The purpose of this paper is to provide a qualitative investigation of family employment dynamics in the KwaMashu township economy. Design/methodology/approach Using a small area census research method, the researchers identified 1,556 businesses located in a settlement of 2 km2. Of these enterprises, 694 (45 percent) traded in fast moving consumer goods, notably food and/or drink. The main retailers were small shops (spaza shops) and liquor outlets (bars or shebeens), greengrocers, sellers of meat and poultry products, house shops, restaurants, takeaways and tuckshops. Firm surveys were conducted with 270 businesses in four predominant sectors: liquor retail, grocery retail, early childhood educators and hair care businesses. Findings The research found that 40 percent of the surveyed firms in these sectors employ family members on a full-time basis, whereas merely 26 percent of firms employ family members on a part-time basis. In the grocery retail sector, about half of family employees are remunerated on a wage basis, the other half are paid in-kind (40 paper of the total) or on a profit share arrangement. In liquor retail and educare sectors, the majority of family members are paid wages. Female-run enterprises employ less family members on a full-time basis (except in the grocery sector), yet employ more family members on a part-time basis with a higher portion of wages paid in-kind. Research limitations/implications Family plays an important role in township enterprises. Beyond direct employment, township enterprises fulfill an important social protection and neighborhood relationship function for business operators and their families. The familial relationship to micro-enterprises should be seen through the lens of bricolage (Gras and Nason, 2015). Originality/value In this respect, the authors confirm three benefits of family firms: the creation of social protection though family beneficiation, the provision of employment and work experience and the strategic use of family resources.