The role of clothing manufacturing co-operatives in job creation and poverty alleviation in Sharpeville

Thesis (M.Com. (Economics))--North-West University, Vaal Triangle Campus, 2005.This dissertation studies the role of clothing manufacturing co-operatives in job creation and poverty alleviation in Sharpeville. Ttie study focuses on three areas, namely, the theories of unemployment, poverty and clothing manufacturing, the state of unemployment and poverty in Sharpeville and clothing manufacturing co-operatives as one of the contributors to the solution to unemployment and poverty. Unemployment is identified, among others, as a major determinant of poverty; therefore, the main component of any policy aimed at eradicating poverty should focus on employment creation. The clothing industry being the most labour-intensive industry in South Africa with low capital entry requirement creates opportunities for entrepreneurially driven employment creation in Sharpeville. The approach in the dissertation was to define and measure unemployment and poverty and determine the profile of the poor in Sharpeville. This is done by employing household-level indicators. For measuring poverty the following tools are used: the Household Subsistence Level (HSL) as poverty line, the, headcount index, the poverty gap and the dependency ratio. Unemployment is also used to determine poverty levels. The dissertation shows that Sharpeville experiences high unemployment rates and low levels of poverty based on the indicators employed. Compared to Bophelong, most indicators (except for unemployment) show that Sharpeville is better off. Comparing the operations of clothing businesses in Sharpeville and Mitchell's Plain, the dissertation shows that clothing manufacturing has the potential to create job opportunities in Sharpeville if assistance could be offered. Assuming that assistance is offered to form clothing manufacturing cooperatives. The dissertation shows that 374 jobs could be created and that the unemployment rate could decrease from 59.2 percent to 52.9 percent. The expenditure of the whole population of Sharpeville on clothing (also considering nearby communities) shows a potential big market for clothing manufacturing co-operatives in the township. At an average income of R600 per month the impact will be that the poverty rate will be reduced from 43.1 percent to 40.8 percent and at an average income of R1 500 the impact will be that the poverty rate decrease from 43.1 percent to 39.1 percent. Finally, the dissertation concludes that clothing manufacturing co-operatives can indeed create job opportunities and alleviate poverty, but assistance from different structures is needed. The dissertation suggests major support systems like involvement by industry and training institutions, the formation of associations working directly with operators, the addressing of the problem of geographic location of service providers and government involvement.Master