Pedal – Driven Development: How Qhubeka Bicycle Programmes, Are Changing Lives

According to the World Bank Local Economic Development is defined as: “Building up the economic capacity of a local area to improve its economic future and quality of life for all. It is a process by which public, businesses and nongovernmental sector partners work collectively to create better conditions for economic growth and employment generation.” A South African  NGO, Qhubeka truly personifies this understanding of LED, fully capturing the practical value of simple methodologies which successfully generate significant economic and social benefits for all.

Qhubeka is a South African non-profit organization, founded in 2005, which economically empowers local communities through its provision of bicycles. By connecting people to schools, clinics, jobs and exclusive opportunities, Qhubeka, a Nguni word meaning “to progress or move forward”, uses bicycles to change lives. Qhubeka is  expanding throughout most of South Africa, targeting each and every province, implementing programmes ranging from Cape Town in the Western Cape, along the coast to Port Elizabeth in the Eastern Cape, all the way up to  communities in Gauteng, Mpumalanga, North West, Kwa-Zula Natal and Limpopo. According to Qhubeka’s  national programmes manager, Jan Rossouw, Qhubeka’s aim is to “ mobilize people on bicycles,” while simultaneously implementing various programmes and projects, creating substantial economic, safety and educational benefits for struggling communities. Based on the following analysis and insights, in alignment with their current status and through further growth, the future potential impact of Qhubeka’s operations and development initiatives, are enormous.

QHUBEKA PROGRAMMES:

Qhubeka firmly believes that, “good development happens when a community is given a hand – up, not a hand out.” All of the organization’s programmes are based upon a learn – to – earn or work – to – earn programmes, such as the following:

Scholar Mobility Programmes:

The “Scholar Mobility Programme” (SMP)  is designed to empower schools with a mechanism to improve scholar engagement and to drive specific strategic objectives of the school to continuously improve its ability and quality as a learning institution. It further enable scholars access to structured learning institutions and other school and related activities by using bicycles to overcome any mobility constraints. The objective is to ultimately have improved educational outcomes and higher pass rates by increased school attendance, punctuality to school and participation in other school and educational activities.

Linked closely with the Scholar Mobility Programme is Qhubeka’s initiatives to create a safer environment for learners to facilitate improved education outcomes. This is achieved by empowering appointed School Security Personnel and active Community Policing Forum (CPF) members to use bicycles to improve scholar and school safety and security by patrolling and monitoring of school premises, assisting and monitoring school access points, and assisting and escorting learners to school where possible. An added benefit is the general improvement of CPF mobility and visibility around the communities in which the schools are located.

Security Programmes:

Qhubeka is also actively establishing programmes and distributing  bicycles in aim of increasing local security which is a particularly important aspect given South Africa’s extremely high crime rates. A study conducted in India at the University of Delhi using data ranging from 1991 to 2011 found that higher crime rates lead to a lower GDP per capita. In one such example, Qhubeka has recently worked with the Nelson Mandela Bay Municipality  to launch a programme in Port Elizabeth  which bicycles were distributed  and used to train and employ 100 local community members between the age of 18 and 35 to provide sustainable safety and security related services. In partnership with Nelson Mandela Bay Municipality (NMBM) and Volkswagen South Africa (VWSA), they have used the city’s hosting of the Ironman World Championship to  create opportunities for unemployed young adults to earn a decent monthly living wage. Under the programme  employment for 50  “peace officers”, 30 “beach officers” and 20 “tourisim ambassadors” were created, enabling them to, “play a vital role in the sustainable safety and security apparatus of the municipality before, during and after  the event.” According to Qhubeka executive director Tsatsi Phaweni, “the long term hope is to create a legacy programme that can be incorporated into existing neighborhood watches, thus creating a sense of security in communities and the general public.” An effective side note on this particular project is that it aligns with the World Bank’s 2030 Vision and their new “Cascade” approach. A methodology involving development investment strategy which prioritizes public – private partnerships in aim of, ““crowding in” the private sector and “creating markets””.

Healthcare Worker Programmes:

Qhubeka provides bicycles to health workers allowing them to travel further distances to treat patients and carry more medical supplies, enabling communities to receive wider access to healthcare and clinics. This is in turn allows for a healthier individuals and overall population. A study by economists at the Harvard school of Public health in 2004 found that, “health has a positive and statistically significant effect on economic growth.” While another study published in the journal of Applied Economics states that, “health care expenditure must have positive effects on labour productivity, as higher curative and preventive health care expenditures improve labour participation in production activity.” Despite Qhubeka’s bikes not being directly classified as health expenditure, they are directly related to and have vital impact on health services and thus contribute to health expenditure. Furthermore, in 2007 from economist Jocelyn Finlay, also from the Harvard school of public health, mentions the incentive effect, which borne out of theoretical literature, states, “individuals who are healthier and have a greater life expectancy will have the incentive to invest in education as the time horizon over which returns can be earned is extended. Education is the driver of economic growth, and thus health plays an indirect role.” Therefore, it is evident that numerous studies have been conducted and confirm that increased healthcare, access to health services and health expenditure have a significantly positive effect on economic growth, and Qhubeka is playing their part.

Adult Programmes:

Within the adult programmes Qhubeka has various work to earn programmes including the  Tree – prenuer and the Waste – preneur. In return for collecting waste and planting trees, individuals can receive bicycles. A Tree – prenuer is required to plant at least 200 trees and nurture them to the height of 30cm, while a Waste – prenuer can trade 4,000 PET litre bottles or 200kg of sorted waste for a bicycle. Environmental sustainability is under particular threat in many South African rural areas on account of large mining operations which destroy large proportions of natural habitats, thus this type of programming is essential in restoring these territories. Research presented at 5th Ministerial Conference on Environment and Development in Asia, and the Pacific in Seoul, Korea by the three Economic, Environmental and Development experts in Asia found strong relationships between environmental sustainability and economic growth. Their studies showed that economic growth degrades environmental sustainability in most countries, and therefore it is important to ensure that environmental sustainability is in alignment with economic growth, as it allows for an all rounded form of development for local communities. In addition to these programmes, Qhubeka also runs a Bicycle Field Mechanic Program in alignment with  its various programmes which  select members of communities to train in bicycle mechanic skills to ultimately establish a Bicycle repair shop and provides them with technical manuals,  small business skills training courses and bicycle repair tools. This is another vital form of economic development as businesses and employment opportunities assist in creating micro – enterprises which ultimately inject money into local economies, while allowing local citizens to increase their incomes and lift their standard of living.

IMPACT EVALUATION:

As follows is an analysis highlighting key data points truly conveying the groundbreaking impact which Qhubeka is having:

·          Scholar Mobility Programme:

o   Was originally launched in 2009, and in December 2012 and impact study was conducted on 600 households and 300 students assessing the programme outcomes over the previous years. The introduction of Qhubeka seemed to have significant impact as follows:

o   School Attendance:

§  Before bicycle introduction, 21% of parents reported the primary reason for student’s absence to school being DISTANCE, afterwards, this number fell to 0%

§  On average attendance for girls improved by 28% while attendance for boys improved by 25%.

o   Academic performance

§  Amongst the bicycle receivers between boys of girls, as measured by end of term average scores, there was an incredible 22 percentage point and 59% improvement in student results. In three years this is truly outstanding.

o   Travel time

§  Before the bicycle programme was implemented 33% of students travelled to school in one hour or less, 3 years later 89% of students travelled in an hour or less.

o   Quality of life

§  After being surveyed on wellbeing, 73% of students said their lives were significantly improved while 17% reported noticeable change.

o   Safety

§  After bicycles, 69% of students reported feeling safe when going to and from school as most usually face dangers including wild animals, night walks and crime.

Qhubeka tells the story of Percy, “Percy lives in a village in rural Limpopo where there is no high school. He received a bicycle in 2014, when he was in grade 9, through a Qhubeka programme run by World Vision, to help him ride the 5km to the high school in a neighboring town. In January 2018, Percy got his Matric (12^th grade) results – he was one of the four top-performing students in the Limpopo province. He is currently studying to become a medical doctor at the University of the Witwatersrand in Johannesburg.” The economic and social benefits this not only brings to Percy and his family but to the people within his community. He now will be able to get a tertiary education, get a job as a doctor, and increase the standard of living for his family, while injecting money into his local community, and providing local healthcare.

In discussion with national programmes manger Jan Rossouw, he explained the impact on waste pickers. While still tracking the  full impact, they reported that the average waste pickers in Soweto earns about US$100 – US$150 per month. On any given day they may spend 10 hours of their day collecting rubbish, and then sorting through it the following day. Impact reports  indicates that with bicycles waste – preneurs can collect the same amount of rubbish in 5 hours versus the 10 they would take on foot. The ripple impact of this could be astronomical, cutting their collect time in half they could essentially earn nearly double what they normally earn per month, allowing them not only to increase their standard of living and inject more money into their local economy but aid them in escaping poverty.

One of the most incredible stories related to Qhubeka bicycles is that of a father rand son in the midst of tragedy. In 2017, Knysna, South Africa experienced one of the country’s worst bushfires in its history in which a rampant fire, fueled by 90km/hour winds, stretching across 300km, burnt for nearly two weeks. Over a 1000 homes were destroyed, 300 structures were damaged, more than 10,000 people displaced and there was over US$300million in overall damages. Amongst the heartbreak and disaster came a glimpse of hope driven by opportunity. According to national programmes  manager Jan Rossouw, a father and son from a local township in the surrounding Knysna area has been  selling sandwiches to the business and workers in the central business area.  Together they would make sandwiches at their home and walk from the township to the central business district , sell their sandwiches and then walk back to make more. The two became well – known among the businesses  and one day someone pointed out the difference a bicycle could make. Qhubeka provided the father and son with bicycles, and it was like a spark to flame. The duo continued their business and within six months they hired a third worker and within a year the two had bought a car to expand their operations. This extraordinary feat was all made possible by the introduction, of a bicycle. Developing from a situation in where the father and son had to walk many kilometers commuting from a township, the provision of a bicycle allowed them to excel exponentially and purchase a motor vehicle which takes substantial financial capabilities. As best said by Singapore’s former prime minister Lee Kuan Yew, “All people want is an opportunity to better themselves, and we gave them that opportunity.”

In the 2016 and 2017 alone, Qhubeka distributed 14,300 bikes which included over 8,000 to students and 5,000 to work to earn programmes providing economic opportunity. What does this mean for Qhubeka and their economic development impact?  Well, in 2018 they will be aiming to increase distribution to 12,000 – 15,000 bikes and moving forward they have set their goals at 20,000 annually by the end of 2019 and 100,000 per year by 2030. If they are having the impact now, on people like Percy and fathers and sons, there must be many more just like them in the 12,000 – 15,000 bicycles Qhubeka will be distributing by the end of this year, never mind the 100,000 bicycles they are aiming to  to distribute per year by 2030, and the 83,000 bicycles distributed since 2005. Another objective of Qhubeka is to partner with reputable institutions to establish advanced monitoring and evaluation systems which could through the introduction of continual quantifiable outcomes, enable the visualization of their substantial economic impact. Regardless, Qhubeka’s scholar mobility programmes, work to earn programmes, government and business partnerships and various methodologies has allowed their implementation of local economic development to be truly remarkable. As they continue operate, implement and grow moving forward, they could spark a global movement in which the world’s eyes are opened to how bicycles, truly can change lives.

US Economic Growth vs. Immigration: Who Will Fix the US Labor Shortage?

As unemployment rates hit historic lows, the United States is currently in the midst of a severe skilled labor shortage. Coming on the backend of the longest continuous job creation in US history, the United States is facing its biggest shortage of workers in more than 20 years. The latest figures have seen the unemployment rate rise up from a record low of 3.8% to 4.0%. Various American industries and companies, particularity in the information technology, transportation, agriculture, construction and manufacturing sectors, are suffering from a range of shortages. Back in January 2017 The Associated General Contractors of America (AGCA) conducted a survey where 73% of businesses said they had a difficult time finding qualified workers and 55% identified worker shortages as bigger concerns than federal regulations and low infrastructure development. The U.S. bank did another study in 2018 in which 61% of small businesses said, “they were experiencing extreme to moderate difficulty in finding quality skilled workers in order to expand their businesses.” 

Erin Clemens, Vice President of Beach Nut Nutrition, one of the leading brands in baby foods in the US, said that, “There is definitely a [skilled labor] shortage in the Mohawk Valley [New York]…we’re exhausting the labor pool. The population is not growing. Unemployment is low.”

Apparently the transportation industry is also experiencing major consequences as it reported a shortfall of 51,000 truck drivers in 2018. Trucks account for approximately 70% of goods and services transportation across the United States. In order to keep their drivers some companies are having to firmly increase wages with Us Xpress, based in Tennessee, announcing $50,000 bonuses and four weeks holiday for certain driver teams. In an industry where the median annual income for a truck driver is US$43,000 and a typical driver is on the road more than 300 days of the year, this is unheard of. According to chief economist, Mark Zandi, at Moody’s Analytics, “Business’ number one problem is finding qualified workers. At the current pace of job growth, if sustained, this problem is set to get much worse… these labor shortages will only intensify across all industries and company sizes.

Now some may argue that the labor participation rate is currently at a slump and that one of the answers to the skilled labor shortage may be to reach outside the skilled labor pool and attempt to address labor and skill shortages internally. In doing so, there are four major domestic areas in which an economy could look in order to increase its labor shortage, as represented in the diagram below.

Currently there are various issues with attempting to solve the skilled labor shortage by reaching into these other talent pools.

Ø  Retired/ Older Workers - One first places employers turn to when looking for more employment are retired and older workers, but unfortunately for the United states, they face the reality of an aging population whose workforce is already at capacity. Currently in the United States 4.4% of individuals 85 or older are still working, which is the highest number on US record. The proportion of workers over the age of 55 in the workforce has also been at a historic high, after in 2016 it was reported that 22.4% of the workforce was over 55, while projections see it rising to 25% by 2024. As the oldest baby boomers already started retiring in 2011, a significant amount of workers from that era are above or around the age of retirement and while these figures show a lot of them are still working they represent the fact that the potential for an increase in retired workers entering the labor force, is most likely very near capacity.

Ø  Under Age / Part – Time Workers – The teen unemployment rate saw its lowest mark since 1969 at 13.3%, mid last year. Over the past three years Starbucks, according to Starbucks Senior Vice President John Kelly, has hired 50,000 workers between the age of 16 and 24 who weren’t in school or working. Even lawmakers are trying to expand the labor force as Minnesota state representatives are trying to change the law disallowing teens from working construction sites as there are such a limited number of workers available in the current labor market. In addition, the underemployment rate, measuring the amount of part – time workers seeking full time work was at 7.8% in June 2018. This was the lowest rate recorded since before the GFC in 2008, thus identifying severely strained pool of part – time workers.

Ø  Restricted Demographic – In certain critical cases the employers turn to largely overlooked labor pools, specifically those with criminal records. Surprisingly, some employers have reached such an extreme that according to the Financial times, “Labor shortages in the US Midwest are prompting employers to hire prisoners, ex – convicts and former drug addicts as they relax recruitment standards to fill vacancies.” This gives insight to the idea that employers are leaving no stone unturned in their search for workers, as their desperation levels are reaching an all time high.

Ø  Unskilled Workers – One of the options employers have is to attempt to retrain and educate unskilled workers in order to fill skill and labor gaps. This is already happening as General Electric Aviation’s staffing specialist, Betsy Enderle, said the situation is “very dire” and the company is more aggressively recruiting in high schools and lowering skill standards for jobs as there simply aren’t enough candidates with the right skills applying for the positions needed. Some companies are even trying to train students in the earlier high school years while attempting to put them in the workforce by their senior year, but the other issue with education and retraining is the time factor. One example of this, is the US’ current dire need of STEM related degrees and qualifications as June 2017 reported the US economy having 600,000 unfilled technology jobs. The time taken to educate, and train unskilled domestic workers will take money and time the US doesn’t have, as labor markets grow tighter and economic growth is being compromised.

One of the biggest issues with the current state of the labor market is that it is constraining economic growth. This year has already seen consumers starting to suffer from increases in food prices, longer wait times for products, and uncompleted services. The Federal Reserve released a report on January 17^th, 2018 stating that, “Most Districts cited on-going labor market tightness and challenges finding qualified workers across skills and sectors, which, in some instances, was described as constraining growth.” According to the Federal reserve in particular, increased labor costs which have been associated with attracting workers have been restraining growth in a number of its districts, especially in manufacturing, construction and transportation.

In addition to these problems, the current overall US labor market is shrinking as the population of eligible working age individuals is diminishing. Over the past 10 years the World bank reports that the percentage of working age individuals within the United States has decreased 1.2%, standing at approximately 65.74% of the population in 2017, which is its lowest rate since 1998. With a decreasing working population and increasing demand for goods and services, trouble is brewing for the future growth of the United States.

If there was any room left in the labor market domestically there would not be huge wage growth pressures in the United States as those outside the labor force, in the categories listed earlier, would see the given opportunities, and quickly enter. As stated by Jeffry Snider of Global Investment Firm Alhambra Partners, “there would be a clear rush of those not in the labor force to join it. Those millions right now outside the official numbers would be moving back into them if they were given a legitimate shot at fruitful employment.” Thus, with more readily people available employers would have options to hire more incoming workers, but this is not the case. Earlier in 2018, Bloomberg reported that the United States has seen the highest rise in wages in a decade, as  average hourly earnings rose 2.9% in the United States between January 2018 and January 2017.  Various CEOs have acted in alignment with these trends as they have made numerous wage related investments:

A further danger associated with high wage pressures is high risk of inflation which will significantly increase the prices of goods and services, subsequently costs of production, and evidently have a constrained negative effect on economic growth. Therefore, given the reports and related statistics, the United States is in the midst of a severe skilled labor shortage and increasing the labor participation rate, looking at domestic labor pools, will most likely not solve this issue. For solutions, immigration, may be part of the American answer.

What many people don’t realize is that many of America’s most successful individuals are not only foreign but originate form emerging economies and developing nations. For instance, Madeline Albright, the first woman to become US secretary of State in 1996, was from Czechoslovakia, which today is known as the Czech republic and only received developed status well after her appointment in 2006. Jan Koum, the co-founder and former CEO of WhatsApp, who started off as a cleaner in a grocery store is from the Soviet Union Ukraine. Patrick Soon – Shoing, the co – discoverer of Abraxane, one of the world’s top – performing drugs treating breast, pancreatic and lung cancer, and Elon Musk, currently the world’s 6^th most powerful entrepreneur, founder and CEO of PayPal, SpaceX and Telsa, are both from South Africa. Furthermore, PepsiCo’s current CEO, Indra Nooyi, is from India, while even American sports heroes like Dikembe Mutombo and Freddy Adu are from the Democratic Republic of Congo and Ghana. And the list can go on…. The point being that immigrants, particularly from emerging economies, can massively benefit the United States, and as mentioned, have significantly done so in the past.

Business Insider reports that between 1997 and 2013 the top three countries granted the most H – 1B visas (work visas for immigrants) were India, China, and South Korea. Brookings Institute senior analyst Neil Ruiz states that one of the reasons for the majority of H – 1B visas going to Indian applicants is because, “India has a competitive advantage in the global IT industry,” and therefore many places such as Silicon Valley have taken serious advantage of their skillsets, due to the lack there of in the domestic market. The American skilled labor shortage is particularly serious amongst the absence of STEM (Science, Engineering, Technology, and mathematics) field qualified workers. So much so, that even amongst the current ambiguity in American immigration policy, in July 2017 the United States government provided STEM related F1 – student visas in America an extra 6-month extension on their work authorization ability. This now provides foreign students in the United States studying in STEM fields with the opportunity to work a possible total of three years on their student visa before having to apply for a H - 1B work visa. This is an additional 24 months or two years longer than any other type of F1 – Student visa work authorization period. Economists from the National Bureau of Economic Research (NBER), ranked as the 2^nd best economic instution in the world, conducted a survey and found that, “immigration increases both labor participation and average wages for U.S. workers, but only when there is a difference in skill sets between U.S. and foreign workers.” As it may be, the current scenario is most likely a reflection of this disparity amongst skillsets and various labor shortages and thus immigration potentially holds various benefits for the U.S. economy.

America’s current policies are hindering the possible benefits which immigration could bring. H – 1B Visa applicants over the past two years have been led through strenuous amounts of red tape, paperwork and “extra evidence requests”. Even highly qualified individuals such as Frida Yu, who is from China and had earned law degrees in China and at Oxford, worked in Hong Kong as a lawyer at a top international firm, received an M.B.A from Stanford and landed a job at a start – up in Silicon Valley, working on promising new technology to improve the use of data, was denied a H – 1B working visa and at time of notice, was given 17 days to leave the country. The United States government even recently released a report proposing the intended removal of the International Entrepreneur Rule. This is a current policy, which was a late Obama program, aimed at luring the world’s most successful, elite, and intelligent entrepreneurs to America. It is a merit-based program which only 0.00004% of the world’s population is eligible for, while also having the potential to create 300,000 jobs for U.S. workers.

Other countries have implemented successful skilled and merit based – immigration policies, such as Australia. Australia has a unique program which targets immigrants with certain qualifications and experiences, aimed at filling skill gaps within the Australian labor market. Currently skill stream migrants account for approximately 70% of Australia’s total migrant intake and are dominantly from emerging economies. The top seven origins of Australian permanent migrants are from India, China, United Kingdom, Philippines, Pakistan, Vietnam, and South Africa. In April 2018, joint research conducted by the Australian Treasury and Department of Home Affairs cited that the International Monetary Fund estimates that Australia’s migration program will add up to 1% of annual GDP growth from 2020 to 2050, particularly because it limits various economic impacts, including those of an ageing population.

Thus, in conclusion, the United States is facing a severe labor shortage, which will most likely not be fully solved through increases in the labor participation rate and by reaching into domestic talent pools. While immigrants have already played a notably impactful and beneficial role to the United States, skillsets and talent pools in emerging economies can aid America in addressing its tight labor market. While current policies in the United States are not supporting the ideology of skilled immigration, given the kickoff of the US Presidential Campaign in the next 18 months, it is likely to see a renewed perspective on immigration from the United States based upon the presented scenario and projective consequences. If officials do not alter regulations and change their views on immigration, the U.S. economy could face detrimental constraints on economic growth in the near future.