Sally Roever is the International Coordinator of Women in Informal Employment: Globalizing and Organizing (WIEGO), which is a global coalition devoted to “empowering the working poor, especially women, in the informal economy to secure their livelihoods.”
Can you give us a brief overview of the world of informal work today? What are the industries, sectors, and regions where it's most prevalent?
The first thing to say is that although informal work is understood in many different ways in different parts of the world, there is one international definition and conceptual framework for what it means. It’s a conceptual framework that was developed through the International Conference of Labor Statisticians that essentially means employment that's not covered by labor or social protection. There are two dimensions to it: employment in informal sector enterprises,which are enterprises that are not incorporated as entities separate from the household, and then there's informal employment outside the informal sector. In other words, there are informal jobs in firms and also in households. Another way of thinking about it is the kind of shadow economy or underground economy, and that's not at all what the international framework looks like.
Just to give a sense of what it looks like around the world, 61 percent of all employment is informal. That adds up to about 2 billion informal workers, meaning they don't have social protection. It's actually the norm when we look at the extent of informal employment as opposed to formal employment, but it's not normal when we think of mainstream models or the ways that we think about employment rights in policy circles.
Within that 2 billion workers, you can understand the composition of informal employment in a variety of different ways. You can think about men versus women. Globally, informal employment is a higher share of men's employment than women’s, just because more men participate in the labor force than women. Globally, 58 percent of all women’s employment is informal. But it looks very different when you look at different countries by income level. For example, in developing countries, 92 percent of women's employment is informal.
To draw out the material a little further, oftentimes when we think of women's employment in the informal economy, we're thinking about women entrepreneurs. If we look at that, as employment within informal employment, only one percent of all women who work informally are employers, meaning that their enterprises are large enough to employ somebody else. On the other hand, 36 percent of women in informal employment are own account workers, meaning they're not employers, but they're also not employees. 34 percent of women in informal employment are employees, meaning that they work for someone else but don't have labor or social protections. Finally, 28 percent of women in informal employment are contributing family members, meaning they work in family enterprises. I draw attention to that because it's a useful way of distinguishing what is the day-to-day work situation of most workers in informal employment.
Before the pandemic started, what were some of the major challenges faced by informal workers?
Before the pandemic started, the major challenges depended on not only employment status, but also occupational group and workplace. To walk through a few examples, one of the biggest groups of informal workers is domestic workers, who tend to be employees. They work in households, but they also don't have labor protection. They tend to lack contracts. There's no form of labor inspection. Usually, it's difficult to organize, even in countries that have laws protecting domestic workers in place.
If you're looking at groups of informal workers that work in public spaces, say street vendors, market traders, or waste pickers, they have another set of challenges. Before the pandemic, street vendors and market traders struggle with access to a secure workspace. Oftentimes, licensing and permitting regimes are limited, and permits are difficult to obtain. There's not enough space. Their stuff is confiscated a lot. For waste pickers, getting access to recycled material or getting access to infrastructure like sorting sheds is challenging. A lot of urban public spaces have always been challenging for informal workers. If you think about home-based workers, there's another set of challenges, because their place of work is in their own home. They have to pay for their own infrastructure, such as water, electricity, and so on. They're bearing all the costs of production, but maybe only getting paid piece rates.
I think the way to think about the broad challenge that they all have in common is access to really basic social protection and labor protection. That's important because these are workers that don't have any kind of institutional buffers against risk. Risk of accidents, risk of illness, safety risks, income risks, all of these risks are dealt with individually, and that's what they all have in common. To reduce those risks, you have to think about where it is that they're working. What is their employment relationship? After that, you can start to see the pathways and stepping stones to help improve those conditions.
How did the pandemic exacerbate existing challenges, and what, if any, new challenges arose because of the pandemic?
One fact of life for informal workers is irregularity. Many of them live on a day-to-day basis. A typical street trader may wake up in the morning, go to the wholesale market, buy goods on credit, go out and sell those goods, and then at the end of the day, pay off the supplier or the money lender, and then whatever's left over is used to eat that day. You work today, you eat today. When you combine the fact that earnings are irregular and the fact that informal workers take on all the risk individually, then you start to see how the pandemic has played out.
The immediate impact was loss of income because of government restrictions and lockdowns, particularly in public space, but domestic workers also lost out on earnings. There was an immediate effect on the supply chain; distributors lost orders since street vendors and waste pickers couldn't go out. There’s also a “health tax.” Many informal workers also live in informal settlements or crowded conditions where it's impossible to do social distancing, so of course the virus itself has impacted informal workers in a massive way. Again, without protections in place (unless there's universal health care for them), they typically don't have health insurance. The loss of earnings has also meant food insecurity. In short, a lot of the initial income, food, and health crisis was born very disproportionately in the informal economy.
In the more medium-term, after the first month or so, because of the restrictions on movement, street traders could not return back to the space that they would typically occupy. It might have meant that there is no longer any market. Someone who had been trading outside of a major transportation junction that no longer has the foot traffic or passengers means that there’s no longer a market for whatever it was that they were that they were selling, since people just aren’t out. Supply chains for essential goods and services were broken, so that meant a low ability to access the market. Waste pickers would collect recyclable materials and sell to a middleman, but suddenly the middleman was no longer buying. Even if they had accumulated cardboard or plastic or metal to sell, there was no one to sell it to. For home workers, supply chains have similarly collapsed, and there hasn’t been a resumption of orders anywhere near the level that they were before. Above and beyond that immediate kind of income crisis, there's now the real challenge of how to rebuild those wages from the ground up.
We’re also hearing from many of our affiliates that their workers have been exposed to an increase in violence. There’s state violence: evictions, destruction of markets, police violence against traders who eventually try to return back to work, those sorts of things. Then, there’s also gender-based violence, which is perhaps more common among home-based workers who are home all the time since they can't earn an income any more.
Could you elaborate a little bit more on the gender inequities posed by informal work, especially in the pandemic?
Going back to the different starting points, employers have higher earnings and lower risk, and women are underrepresented as employers as compared to men. Women are overrepresented as contributing family workers where there are low earnings and higher risks. That's the starting point. Thinking about individual occupational groups is another starting point. Let’s take waste pickers as an example. Women tend to work with lower value goods and materials. Women are more likely to be recycling lower value goods like cardboard and plastic as opposed to the higher value materials and metals. Women street traders are likely again to trade in the lower value goods, whereas men trade higher value goods. Within product categories and within sectors, there are different starting points between men and women. Earnings, of course, are lower on average among women than among men.
Another thing to note is that a lot of women informal workers are kind of embedded in relations of debt and dependency because they can't accumulate enough to overcome those relations of dependency. If you think of a woman home worker who takes orders from an intermediary who works for a garment factory, the garment factory needs a certain number of things stitched. The factory will contact the middleman. The middleman will then parcel out work among the women. They have no way of controlling when they get the orders. They don't have a mechanism for getting their wages paid. Late payments of wages are a common problem for them. Because they can't count on income security, they then have to borrow money often. They might have to borrow from the middleman or borrow from a moneylender or so on. As a result, women informal workers in particular are kind of embedded in these relationships that are dependent on other people, either to get work, to get paid, to get goods, to get licenses, or what have you.
When we consider the effects I talked about earlier, loss of earnings, loss of workspace, and so on, they have no form of income. The only choice they have is to borrow money to get through the early months of the pandemic. Across the board, across worker groups and across cities, we’re hearing that common coping strategies for the pandemic are borrowing money, drawing down savings, selling off assets, and so on. They've had to engage in whatever coping strategies they can, and oftentimes that sort of exacerbates the cycle of dependency and erodes the assets that they have been able to accumulate.
What policy solutions does WIEGO (Women in Formal Employment: Globalizing and Organizing) advocate for to solve these challenges?
The way that we've thought about it is distinguishing between short-term relief measures that are needed, medium-term measures to help rebuild those livelihoods, and then longer-term labor and social protection. The last one has always been a large part of our work, but with the pandemic conditions in the early months, we've focused on these more short term relief measures. For example, our partners or affiliates wanted their workers to be designated as essential service providers so that they could return to work. In South Africa, for example, we were able to work with a street trader’s organization to get that designation as an essential service provider, so they could get at least some food vendors back to work. Another short term approach was trying to facilitate access to government provided relief measures, whether cash transfers or food relief or so on, and then advocacy around what the design of those measures should look like in order to include informal workers.
In the medium term, for the past several months, we've been doing a combination of research and advocacy work. A big component of our response has been to our approach has been to design research to inform advocacy at city level. We’re working with informal organizations in 12 cities, where we've done a survey questionnaire administered July and August. We've done key interviews in order to get a sense of what workers are grappling with. Now, we're working on the results of that research in order to inform advocacy at the city level, which is important because so many informal workers who work in public space rely on city governments and local governments for the regulatory environment that they're working in. Another thing we've been working on is tracking what changes in the legal environment and social protection environment are happening. Finally, we’ve been advocating for principles like do no harm, discouraging confiscation of goods and materials and things like that to provide a more enabling environment for people to rebuild.
In the long term, our work carries on in terms of trying to get better labor and social protection in place. That takes place through things like being part of global advocacy coalitions, working on design of social protection measures to include informal workers, and rethinking what labor protections need to look like given that the large proportion of the workforce is informally employed, whether that’s creating the physical space for social protection or thinking of ways to reach more people.
Feature image by Jonathan Togorvnik, WIEGO.
