The Global Urbanist

News and analysis of cities around the world

It's time to welcome the informal workforce to the urban policy table

In the first of a series of articles on urban livelihoods focused on inclusive urban planning for the working poor produced through a collaboration of Women in Informal Employment: Globalizing & Organizing (WIEGO) and The Global Urbanist, Caroline Skinner demonstrates the significance of the world's informal workforce and lays out six priorities for integrating informal workers within urban planning processes.

Caroline Skinner

Caroline Skinner

Cities: Durban

Topics: Integrated planning, Participatory governance, Informal economy, Labour and livelihoods, The global urban agenda

As has been outlined previously in The Global Urbanist, there is a critical gap in the global urban agenda, which is a focus on employment and income levels. The cities agenda is a dual agenda: universal housing and services, but also universal employment and disposable income.

The work of the Inclusive Cities Project, a consortium of largely membership-based organisations of the working poor, aims to address this gap.  Yet the experience among our partners in the Project suggests that practices that exclude informal workers from participating in cities are the norm in many parts of the world. There are daily reports of slum and street trader evictions, and ongoing lower level harassment of informal workers. It is critical to reverse this exclusionary trend; informal workers are too great in numbers, they have too few livelihood alternatives, and they are too essential to the economy and the fabric of our cities.

How the informal workforce contributes

According to 2012 International Labour Organization/WIEGO statistics, informal employment in developing regions accounts for between 45 per cent (in the Middle East and North Africa) and 82 per cent (in South Asia) of non-agricultural employment.  City-level statistics are harder to come by, but available data suggest that in some developing cities as much as 80 per cent of those who work, work in the informal economy.

Although individual incomes of informal workers are often low, cumulatively informal activities contribute significantly to gross domestic product (GDP). For example the contribution of informal enterprises to national GDPs in 16 Sub-Saharan countries varied from 24 per cent in Zambia to 58 per cent in Ghana. On average, the informal sector contributed 41 per cent to GDP in these countries. The informal economy provides low-cost inputs, goods, and services to both formal and informal enterprises, as well as to the public, especially the poorer sections. At the household level, informal activities are often what sustain families living in poorer parts of cities and towns. This suggests that urban informal work is significant to alleviating poverty and to growing local economies.

Furthermore informal workers often use less space and fewer resources, and leave a smaller carbon footprint than their formal counterparts. Certain worker groups like waste pickers are playing an important role in climate change mitigation. This has led some to argue that the informal economy should be considered part of the green economy agenda.

Given the contribution that the informal economy makes, what is behind the exclusionary trends we and our partners observe? There is a deficit in our imagination about developing cities. As Jennifer Robinson argues, the notion of the 'world class city' as a narrow policy goal imposes 'substantial limitations on imagining or planning the futures of cities'. Decision makers remain pre-occupied with competing for domestic and foreign investment and 'world class city' status. Informal activities are seen as undesirable, as obstacles to achieving 'world class-ness' or 'modernity', and their contributions to local economies go largely unrecognised. Additionally in many cases the powerful interests of private sector players — property developers, retailers, and incinerator companies among others — are served by exclusionary practices.

Six priorities for inclusive cities

There is no single prescription that will address all categories of informal work across all urban contexts. However the experience of our partners and our policy research suggest six priority policy issues. 

First, with one third of the urban population in the developing world living in slums, the acceleration of the delivery of basic services is widely acknowledged as a priority. Delivery of these services however, often fails to recognise that homes are also either the primary work place or used for preparation and storage of goods. In selecting the location for new low cost housing developments, and in their design, as well as in in-situ upgrading, built environment professionals need to consider how existing livelihoods can be strengthened. City-wide the provision of basic services including affordable transport must be seen as an economic priority. 

Second, different worker groups have additional infrastructure needs. For example street traders' goods will perish less quickly if they have shelters, they can increase their stock levels if they have access to storage facilities and there will be fewer health issues for traders and their customers if everyone has access to water and public toilets. In cases of good practice of integrating waste pickers into municipal solid waste systems like in some Brazilian cities, local governments have provided tailor-made facilities to sort, process and store recyclables. Small scale manufacturing units — with reliable access to services like affordable electricity — allow home-based workers to work more productively and facilitate collective action like bulk buying of inputs and negotiating improved rates for piece work. 

Third, there is a need for fundamental legal reform informed by the reality of informality. WIEGO research has shown that over-regulation, deregulation, and lack of regulation can all be detrimental to different groups of informal workers. A more appropriate approach is to identify what legal rights and regulations would lead to securer livelihoods for different groups of informal workers. For street traders the right to trade is fundamental and for waste pickers the right to access waste or bid for municipal waste contracts can be transformative. Local government regulations and ordinances — zoning schemes, building codes and health and safety regulations among others — often date back to the colonial era and are used as instruments for exclusionary practices.

Fourth, informal workers need access to support services to increase productivity and incomes. Surveys with informal workers consistently identify access to financial services (not just credit) as a priority intervention. Training if appropriately delivered can enhance productivity. This should be complemented by better understanding of where informal workers fit in the chain of activities from product inception to final consumption — identifying the most effective point along the value chain for organisations of informal workers or the state to intervene.

Fifth, privatisation of services, as well as state assets like land, often pose a threat to informal workers' livelihoods. Privatisation is a missed opportunity as was aptly captured by a Brazilian waste picker leader who noted that local authorities are faced with the choice of placing a 'lot of money in a few people's hands or some money in a lot of people's hands'. Good practice documentation by WIEGO and others (for example David McDonald and Greg Ruiters) show there are many alternatives to privatization that include informal workers and that can result both in efficient service delivery as well as more equal distribution of gains.

Finally, and perhaps most importantly, urban informal workers should be integrally involved in the decisions that impact on them and in implementation of development projects. WIEGO's monitoring of good planning practices that support livelihoods shows that they all share a common element: workers and their representatives are integrally involved. It is a matter of planning with rather than planning for informal workers.

Caroline Skinner is the Urban Policies Programme Director for WIEGO and Senior Researcher at the African Centre for Cities, University of Cape Town.

This is part of a series of articles on urban livelihoods focused on inclusive urban planning for the working poor, produced through a collaboration of global action-research-policy network Women in Informal Employment: Globalizing & Organizing (WIEGO) and The Global Urbanist. WIEGO is a partner in the Inclusive Cities Project, a consortium of largely membership-based organisations of the working poor. Through organising and policy advocacy the Project aims to ensure that urban informal workers' needs are heard within urban planning processes. These articles draw from the experiences in the Project, as well as those of The Global Urbanist's network of writers.