Deregulating the informal sector to prosper

WITH reference to the article “How to tackle the root of SA jobs crisis” (Cape Times, April 15).

The last two paragraphs of the article by Professors Nackerdien and Yu are extremely telling, and should be expanded upon.

Obviously our economy requires more entrepreneurial skills, coupled with training in the various technical sectors.

When the authors state that established formal firms can play a role by helping to develop and train the informal sector workers, they have hit the nail on the head. The German dual education system does just that. Senior school pupils have the opportunity to engage with large formal firms, who impart strategic skills to these pupils.

The private sector pays for this education and invariably gains much more than they have spent.

These structures alleviate the expense to the state and provide skilled workers after the training. To my mind this a win-win situation.

Furthermore, when the authors refer to the following: “The government should continuously alleviate the numerous barriers to the informal economy.” It would be a stroke of genius if government could merely step back from small

businesses, allowing them to do what they know best.

Obviously one doesn’t want to deregulate to the extent that it would be harmful and unhealthy, but one does want to deregulate enough to allow the informal sector to hire and fire at will. Not only would this encourage more employment, but it would allow the informal sector to train outsiders to help them gain a foothold in the economy.