Self-Employed Women in IndiaIn early April 2021, India experienced a surge of COVID-19 cases that has left devastating impacts on the economy. According to ReliefWeb, on May 19, 2021, “India set a global record of 4,529 COVID-19 deaths in 24 hours.” The economic consequences of COVID-19 disproportionately impact vulnerable populations such as self-employed women in India. On June 10, 2021, in a desperate call for help, the Self-Employed Women’s Association (SEWA) expressed to the Georgetown Institute for Women, Peace and Security the financial hardship that its members are facing.

The Impact of COVID-19 on Informal Workers

The COVID-19 pandemic has been harmful to the entire Indian economy, but female informal workers are bearing the brunt of it. These workers rely on public transportation to commute to work, such as buses and trains, but these modes of transport were shut down during the pandemic. Additionally, many self-employed workers are street vendors, a form of work that has also been barred. The May 2021 Cyclone Tauktae in Gujarat, India, exacerbated all these issues. About 8,000 female workers “in the salt farming industry lost the opportunity to sell 600-700 tons of harvested salt because it was swept away when Cyclone Tauktae struck.”

Due to these compounded issues, already impoverished women are unable to work, a consequence that comes with serious financial repercussions. SEWA surveyed many members who must now cut back on their food consumption and medicinal needs because they simply cannot afford it. These are issues that members of SEWA face along with most other self-employed workers across India.

However, the situation is particularly difficult for female workers due to a long-standing culture of gender bias in India. Women are far more likely to have lower-paying and less secure jobs than men. When India first started recovering from the pandemic in late 2020, the return to employment of males took first priority. Thus, self-employed women in India experience a disproportionate rate of pandemic-induced poverty in comparison to their male counterparts.

SEWA Takes Action

According to SEWA leaders, India is grappling with widespread misinformation and fear surrounding the COVID-19 pandemic and vaccines, especially in the rural regions of India. Currently, the organization is taking four main steps to combat COVID-19 in India:

  1. Encouraging people with symptoms to test for COVID-19.
  2. Urging community members to wear masks and educating people on other public health guidelines.
  3. Advocating for COVID-19 vaccination by building community trust.
  4. Prioritizing emergency support to women whose livelihoods took a hit due to “COVID-19 restrictions and the destruction of Cyclone Tauktae.”

In late June and early July 2021, SEWA distributed 1.2 million masks in urban regions and 1.5 million masks in rural regions of India. SEWA aims to provide “health kits, food packets, medicine and financial relief to workers who have lost all sources of income as a result of lockdowns or natural disaster.” Further, SEWA is transforming its offices into temporary “COVID-19 patient care centers” to ease the strain on India’s healthcare system.

One major success for women in India overall is the election of Mamata Banerjee as the chief minister of the West Bengal state government. Banerjee’s commitments “include 250 welfare programs,” many of which will support women and mothers specifically. For instance, Banerjee will mobilize “conditional cash transfers to mothers for their daughters’ education.”

A Call for Action

In order to provide ongoing assistance to self-employed women in India, SEWA requires national and international support. SEWA appeals for support in the form of donations of masks, sanitizers, personal protective equipment and medical supplies as well as monetary donations.

SEWA also welcomes support for the alternative markets that have risen in popularity during the pandemic, such as making face masks, producing sanitizer and selling pre-packaged meals for deliveries. The World Economic Forum puts forth further suggestions, such as providing digital tools and training to help informal workers succeed in changing times. For example, “connecting farmers with consumers of their vegetables in local cities via WhatsApp.”

With support from organizations and the public, during unprecedented times like these, self-employed women in India will be able to rise out of poverty with the ability to thrive and not simply just survive.

Jessica Li
Photo: Flickr

COVID-19 and Poverty in Kyrgyzstan
Nestled in the mountains of Central Asia, Kyrgyzstan has long suffered from high poverty rates and underdevelopment, but the past decade saw Kyrgyzstan’s per capita GDP rise by nearly 50%. The COVID-19 pandemic has halted progress, however, with 700,000 people in Kyrgyzstan sliding into poverty from 2019 to 2020. COVID-19 and poverty in Kyrgyzstan are interlinked in several ways.

An Economy Based on Remittances

The World Bank classifies Kyrgyzstan as a lower middle-income country with a per capita GDP of about $1,200. Much of Kyrgyzstan’s national wealth comes from remittances, especially in rural areas, from which migrants move to work in Russia, Kazakhstan and Turkey. In 2019, citizens abroad sent back nearly $2.5 billion, or 30% of Kyrgyzstan’s GDP. Official statistics show that without remittances, Kyrgyzstan’s 2019 poverty rate would have increased by more than half.

At the beginning of the pandemic, many migrant workers returned home, cutting off remittance flows that kept rural families alive. Others stayed abroad but sent family home, increasing the burden on Kyrgyzstan’s rural residents. Due to the informality of their work, many migrants lost their jobs during the pandemic and did not qualify for the government aid that other more protected workers qualified for.

Rising Food Prices

In 2019, the World Food Programme (WFP) reported that 46% of the Kyrgyz population did not meet their daily calorie needs. From June 2019 to June 2020, food prices rose by 17%, pushing even more vulnerable households into food insecurity and highlighting the correlation between COVID-19 and poverty in Kyrgyzstan. During the same period, the price of flour increased by around 30%.

Kyrgyzstan’s poverty levels have close ties to food prices. According to the World Bank, when food prices rise, Kyrgyzstan’s poverty rate follows closely behind. Rising food prices use up savings of low and middle-class people, pushing them into vulnerability.

While faltering remittances largely affected rural populations, the rising food prices have mainly increased urban poverty in Kyrgyzstan. While those in rural areas have access to farms, urban residents in poverty require assistance to meet their basic food needs. Food imports that fed urban populations fell due to Kyrgyzstan’s weakening currency, hurting low- and middle-income people in cities.

In March 2020, to combat food insecurity, the government instituted price caps, took legal action against companies raising prices and handed out food to vulnerable citizens in urban areas. In April 2020, nearly 95% of households in Bishkek received aid from the government, while in rural areas, 26% received aid. The government’s efforts mitigated the worst of Kyrgyzstan’s increased food insecurity.

Informal Labor

Before the pandemic, informal employment accounted for 71% of all employment in Kyrgyzstan, a large cause of poverty. Informal workers, usually in the construction, trade or industry sectors, usually have no contracts with their employer, increasing their risk of exploitation. During the pandemic, as unemployment rose, informal employees found themselves without the same social protection systems and labor rights as formal employees.

The construction industry, one of the largest sectors of the Kyrgyz economy, employs an especially large amount of informal labor. Due to falling investment and government restrictions, the construction sector has suffered particularly badly, with business owners reporting major drops in employment.

The Government and World Bank Assists

Since the beginning of the pandemic, the World Bank has created three assistance programs totaling $88 million to combat the effects of COVID-19 and poverty in Kyrgyzstan. The programs target both urban and rural poverty, focusing on food insecurity, the environment and low wages.

One of the programs, the Emergency Support for Micro, Small and Medium Enterprises, is providing $25 million in microloans to small and medium-sized businesses suffering from the effects of the pandemic. With a focus on entrepreneurs, this World Bank program aims to help modernize Kyrgyzstan’s economy and workforce.

The World Bank also implemented the Social Protection Emergency Response and Delivery Systems to protect those most at risk of sliding into poverty. This response includes grants for vulnerable families with children and enhanced unemployment insurance for workers across all economic sectors. In the long run, this program will focus on developing income-generating skills in order to make the benefits of relief sustainable after the pandemic has passed.

The World Bank’s third program, the CASA-1000 Community Support Project, will fund small infrastructure projects across Kyrgyzstan. Community members will define and carry out the projects so that each locality has its needs met. The program will support projects in every sub-district, ensuring widespread impact.

The World Bank also supplied emergency funding for Kyrgyzstan’s healthcare system, with $12 million delivered as of March 2021. The funding helped the country acquire 266 hospital beds, 26 ambulances and 342 sets of breathing support equipment, along with funding for medicine, PPE and other supplies necessary for combating the pandemic.

Progress and the Road Ahead

As of July 2021, more than 2,000 Kyrgyz had died of COVID-19 and more than half a million have entered into poverty. The government, in partnership with the World Bank, has taken action to fight both the health and economic effects of the pandemic. New legislation and World Bank programs aim to bring Kyrgyzstan through the pandemic with a stronger economy and a less vulnerable population.

Justin Morgan
Photo: Flickr

Informal Employment
Informal economies are a global phenomenon that often goes unmentioned by popular media. From street vendors to unregistered employees in sweatshops, informal workers make up a large portion of a country’s labor. Informal employment refers to workers who engage in labor that is not taxed or registered by the government. Informal economies are popular because of the opportunity to access wealth. While many see informality as a chance for upward mobility, there are many downfalls to this sector which are clearly visible in the case of Argentina.

Argentina has one of the largest economies in Latin America as it has vast natural resources in energy and agriculture. As of 2020, their GDP stood at 450 billion U.S. dollars and the country had significant advantages in the fields of manufacturing and tech industries. While Argentina’s numbers stand strong compared to other countries in the Americas, a closer look into their labor shows a different picture of their economy. In 2018, informal employment was 48.1% of total employment in Argentina. While many in Argentina find that informal employment is the only option for financial survival, this sector brings about serious issues for both individual workers and the larger economy.

Poverty and Informal Employment

The push factors to join the informal economy of Argentina differ based on one’s purpose in this sector. For employers, cheap wages are a major reason to seek unregistered workers. Informality markets itself as a money-saving business model. For workers, informality does not present itself as an option but as a means for financial survival. Argentina’s market does not offer many jobs in the formal economy, leading employees to grab at whatever positions are available.

The link between informality and poverty is hard to explore. Questions remain over whether informality causes higher levels of poverty or if poverty leads to higher levels of informal employment. The World Bank team in Argentina has developed a two-year program to analyze the causes and consequences of informality in Argentina. In their study, it was found that informal work appears to be the most common type of employment among workers in poor households, but the degree and direction of causation are more difficult to determine. Whether poverty causes informality or informality causes poverty is uncertain. The program is finding that prior to Argentina’s economic crisis, the increase in poverty rates appeared to be driven by an increase in poverty among informal households. Such statistics confirm at least a correlative link between the two issues. This serves as evidence for why issues with informality should be at the forefront of anti-poverty efforts.

Dangers of Informal Employment

Informal economies pose several consequences for the welfare of workers and the larger market economy of a country. On the side of workers, informal employment is an opportunity that comes with many risks. The biggest obstacle with informal economies is the recognition of worker’s rights. Given that these workers are not registered, organizations do not have the responsibility to uphold necessary protections. In Argentina, the Confederation of Popular Economy Workers estimates that only approximately 20,000 workers, or about 0.3%, have acquired labor rights so far.  This 0.3% comes from a total of 7.2 million informal workers, thus showing that many of these persons lack access to health insurance, pension, and protection against labor accidents. Consequently, informal workers often find themselves at the margins of society as their work fails to secure a stable income.

Informality also poses a threat to the overall economy of a country. In a personal interview with Dr. Jeronimo Montero Bressan, a full-time researcher for the National Scientific and Technical Research Council in Argentina, he explained the ways in which the informal sector affects the rest of the country. Informal employment is a subsidy to the private sector. Most informal employment falls in the hands of private companies that produce subcontracting chains. This way informal workers can work under formal companies.

For Dr. Montero Bressan, while many come to have a romantic view of informality, the reality presents a chain of exploitation and an overall risk for the livelihood of the rest of the country. Dr. Montero Bressan has attested that because informal workers receive little money, wages will likely diminish throughout the entire economy, thus serving to motivate this type of employment. He has also said, “So, you tell people you won’t hire them because you could get the same labor for half what you pay them.” Informal economies do not just have an effect within a certain sector but come to influence the economy of the entire country. Without stronger regulation, everyone will stand at a loss as the value of labor falls with companies being able to ignore worker’s rights.

What is the response?

As Argentina sees stable numbers in the informal economies, efforts to reform this sector continue to fall short. According to Dr. Montero Bressan, the government of Argentina has done little to improve the rights of informal workers. In recent years, fines for specific sectors were blanketed, preventing companies from being fined when they leave workers unregistered. From his perspective, Argentina has weak labor laws that can provide little security. Dr. Montero Bressan has stated that if one were to be fired from an informal job, the employer could be taken to trial, however, the only likely result would be compensation. Such compensation gives laborers some value for their work, however, one-time compensation will not fix the problem of informality. Employees will find themselves back in poverty and seeking informal employment once the compensation runs out.

Informal employment generates consequences from the very beginning as worker’s rights are denied. For Argentina, the informal sector poses an extensive problem for both informal workers and the larger economy as informality decreases wages in the country. The informal sector has a strong connection with poverty as this means of labor is generally common in poor households. This sector, however, is not sustainable and the government of Argentina must respond by providing protection for workers and holding companies accountable for failing to register their employees.

– Ana Paola Asturias

Photo: Flickr

5 NGOs Supporting Informal Workers in Developing NationsApproximately 61% of the world’s employed, or 2,000,000,000 people, earn their livelihoods in the informal sector. While the informal sector brings its own set of limitations such as a lack of healthcare benefits, the COVID-19 pandemic has exacerbated the issues that daily wage workers face.  Within that percentage, there’s a staggering distribution of informal employment.

Informal Workers in Developing Nations

The informal sector varies by country but is more common in developing nations. In Africa, 85.8% of employment is informal, 68.2% in Asia and the Pacific, 68.6% in the Arab States, 40% in the Americas and over 25% in Europe and Central Asia. Altogether, 93% of informal employment is in low-and-middle-income countries.

According to WIEGO, informal work means a diversified set of economic activities or jobs that are not related or protected by the state. It is most commonly associated with self-employment and small unregistered businesses but also includes daily wage workers. Informal workers face increased poverty and occupational risks that, combined with lack of access to any sort of welfare, push many into income inequality and greater poverty.

5 NGOs Working to Support Informal workers Abroad

  1. WIEGO: Women in Informal Employment: Globalizing and Organizing (WIEGO) is an NGO founded in 1997 with a mission is to increase the voice, visibility and validity of impoverished communities, especially women. Building and strengthening informal worker organizations, such as internal sector networks, has remained a central objective of the program for years. WIEGO has also implemented a five-year plan that spans from April 2018 to March 2023 to improve informal workers’ visibility, global influence, national statistics and its knowledge base.
  2. Asiye eTafuleni (South Africa): This NGO is focused on promoting and developing good practices around inclusive urban planning and design. AeT works alongside informal workers to learn more about their situation. The organization has four ambitions it wants to act upon: Inclusive Design, Urban Advocacy, Urban Education and Urban Intelligence. Inclusive Design focuses on reconsidering and reshaping urban spatial planning and zoning, urban regulations, laws and policies and urban aesthetics to incorporate voices that have been traditionally excluded, such as the working poor. AeT believes the working poor and informal workers should have a voice in these actions. Urban Advocacy works to influence political and social agendas to s crucial to impact change for informal workers and their organizations. AeT encourages and teaches the informal sector to become advocates for themselves. Through Urban Education, AeT provides opportunities for students, the general public, tourists and environment professionals to learn about urban environments inclusive of informal workers. Lastly, Urban Intelligence allows AeT to widen and deepen urban intelligence so that local, national and international stakeholders can engage in more informed urban dialogue, planning and design processes.
  3. Avina Foundation: At the start, Avina focused on identifying, supporting, developing leadership and building relationships with social activists and entrepreneurs to strengthen their initiatives in favor of sustainable development. Following this, Avina began to bring together a critical mass of partners, over time helping them grow connections. Today, the program fulfills its mission by building and strengthening collaboration among different sectors to achieve the U.N.’s Sustainable Development Goals.
  4. StreetNet, International Alliance of Street Vendors: Located in Durban, South Africa, the organization’s primary goal is to promote the exchange of information and ideas on critical issues facing street vendors, market vendors and hawkers. Just like the programs abroad, StreetNet also works on practical organizing and advocacy strategies. StreetNet focuses on advocating for street vendors. Around the world, millions of people earn their livelihoods on the streets and in the vast markets. Street vendors sell a variety of products, from food to technology. However, while the street markets are convenient and affordable for consumers, street vendors are often at risk of poverty as their survival depends on the day’s wage. The program aims to improve the lives of street vendors and informal traders.
  5. Kagad Kach Patra Kashtakari Panchayat: This organization was established due to the immoral, cruel and unjust manner waste pickers were treated in India. The organization advocates for the fair treatment of waste pickers, itinerant waste buyers, waste collectors and other informal recyclers.

Informal workers are the silent majority and are the exhausted backbone of their respected countries. Since 61% of the world’s employed population is informal, reducing the informal sector’s number of workers means alleviating global poverty. These five organizations are fighting for the fair treatment of informal workers and are providing vital resources for their survival. These organizations are also supporting workers’ transition from informal work to jobs protected by the state so workers won’t fear transitioning their livelihoods. By improving the conditions of informal workers, we, as a global community, can move one step toward equality and global healthcare.

– Aaron Samperio
Photo: Flickr

Support for Impoverished Communities
For centuries, street vendors around the world have supplied food, clothing and other daily necessities to communities in need. People living in poverty are able to access much-needed materials through these informal markets that otherwise would not be available to them. Street vendors not only support themselves but their communities through their work. The role that they play in assisting to alleviate poverty is a prominent one. The job is arduous with many street vendors experiencing harassment and restrictions from local authorities. However, government officials are beginning to recognize the vital role that street vendors play in their respective nation’s economies and society at large. Here is how street vendors and street vending are offering support for impoverished communities around the world.

What is Street Vending?

The National Association of Street Vendors of India (NASVI) defines a street vendor as a person who supplies goods or services for public sale in a temporary structure or mobile stall. Throughout time, those living in poverty have sought after the informal market. Street vending in modern times has continued to be a space that the impoverished or low-income earners have turned to for financial gain. Some goods vendors sell include food items, clothing and a variety of other wares. The requirements for entering this field are minimal. Unlike positions in the formal sector, street vending does not require educational attainment or formal training.

A report on the informal market in urban Thailand stated that 2% of female street vendors had no education with 50% having only attained primary education. This makes the position appealing to those seeking employment with a limited educational background. The main requirements for street vending are the obtaining of goods whether it be food items or other supplies, temporary space to hold this inventory and the skills necessary to sell in an often competitive marketplace.

Economic Empowerment

Street vending has been a popular avenue for those seeking financial gain and economic independence. In a study focusing on the informal sector in Bangalore, India, 77% of respondents stated that improving financial security was the motive for becoming a street vendor. Street vending not only offers support for vendors but also for the communities that these sellers serve. Fresh produce and everyday necessities become available to individuals living in impoverished and low-income earning areas. These products would otherwise be out of reach for these communities as these products end up in supermarkets with fixed prices.

With nearly 70% of the Indian population earning less than $2 a day, and more than half of the South African population earning less than $80 a month, these fixed prices are far out of the respective price range for these individuals. Street vendors offer products at discounted prices along with offering payment plans for customers who struggle with affording these necessities. Street vendors are able to attain financial security while also contributing to the economies of their respective nations.

Job Creation

According to the brief “Strengthening urban India’s informal economy: The case of street vending,” the informal economy comprised 50% to 80% of newly created jobs in India. The Ministry of Housing and Urban Poverty Alleviation reported an estimated 10 million street vendors in India. Statistics South Africa recorded in a quarterly labor survey that more than 3 million people had employment in the country’s informal economy. Meanwhile, Groundup.org reported that an estimated 8,000 informal traders serve the 460,000 people who frequent the Warwick Junction, a popular transportation and trading hub located in Durban, South Africa. Poonsap Suanmuang of the Foundation for Labor and Employment Promotion stated that there are an estimated 300,000 street vendors working in Bangkok, Thailand. These statistics exemplify the prominent role of street vendors in the economies and communities of nations across the globe.

Troubles of the Trade

Street vendors have been victim to consistent pushback, and severe harassment from law officials as well as governmental structures. Authorities have implemented varying policies to restrict street vendors in their trade, most often resulting in the loss of wages and inventory. An example of one such policy is Operation Clean Sweep, in which local authorities in Johannesburg, South Africa forcefully evicted 6,000 street vendors. In this situation, authorities confiscated goods and tear-gassed vendors. Advocacy groups are fighting for the rights of street vendors and informal traders by pushing for policies that protect those in this field.

Solutions

Government officials are beginning to recognize the importance of these workers in their societies with the implementation of legislation providing support and protection for street vendors. In 2014, the Indian parliament implemented the Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act. This policy emerged to offer protection from possible instances of harm from law officials and potential displacement. As a result of Operation Clean Sweep, the Save the Hawkers campaign began, and authorities drafted a charter urging the implementation of inclusive policies for street traders in South Africa.

Organizations such as Women in Informal Employment: Globalizing and Organizing (WIEGO) and the National Association of Street Vendors (NASVI) are continuously fighting for the rights of street vendors. These organizers hope to create safe spaces for street vendors to continue supporting themselves financially as well as providing support for the impoverished communities that serve.

Street vending is a centuries-old profession that has provided financial achievement for those in need. With the help of officials and organizers street vending can continue to grow and become a stable source of income for those in need. The importance of street vendors is undeniable as they have and continue to provide significant support for impoverished communities.

– Imani Smikle
Photo: Flickr

Wayback Burgers in the Middle East
From a simple start in Delaware to the far ends of the Earth in Pakistan, Jake’s Wayback Burgers, now known simply as Wayback Burgers, has introduced many jobs for the informal population. The idea of diving into foreign markets first emerged in June 2012 when Wayback Burgers first came to the attention of the Franchizery, a franchise consulting firm in the United Arab Emirates. Soon after, Abdulrahman Alieedan, Vice Chairman of Topaz MENA LLC, agreed to support the franchise expansion. Here is some information about Wayback Burgers in the Middle East and Africa.

The International Reach of Wayback Burgers

In 2013, Jake’s Wayback Burgers propelled itself into the international marketplace by partnering with Topaz MENA LLC. As a result, it has added franchises in 28 different countries in the Middle East and Northern Africa as well as the small island country of Cyprus and the country of Iran.

Poverty in MENA/Middle East and Northern Africa

In a 2017 analysis, UNICEF reported that in 11 countries in the Middle East and Northern Africa, poverty continues to impact at least 29 million children. These children and their families do not always have access to education, water, sanitation, proper housing, quality of life, health care and information. Of course, poverty is much more than finances. Poverty harms basic mental, emotional and physical development. It creates and widens achievement gaps between their peers. In essence, children in poverty are most vulnerable to stay in poverty.

 In 2018, the World Bank released the Poverty and Shared Prosperity Report; Piecing Together the Poverty Puzzle. In this report, MENA stood out since it was the only region that saw significant increases in extreme poverty, the act of a person living on less than $1.90 a day. Unfortunately, the main push for this surge was conflict-affected Syria and Yemen. In other developing MENA countries, extreme poverty remained low or declined.

The Importance of US Business in Foreign Markets

The United States possesses 38.2 million people, whereas approximately 7 billion people live in the world. Therefore, millions of markets exist outside U.S. soil but are entirely available for the U.S. to access. Approximately 95% of the world’s consumers are from outside the United States.

The MENA region ranked fourth in the world in exports in 2008. Not only does the U.S.’s involvement in foreign markets help support U.S. jobs (39 million American jobs depended on trade pre-COVID-19) but through business relationships, many other benefits can emerge including national security and global economic growth. Massive corporations like Wayback Burgers or small businesses can be the catalyst to give jobs and improve the lives of the people in MENA.

How Wayback Burgers is Helping

While MENA’s economy appears to be in a stable state, a major problem is that that percentage only includes the formal economy. A select number of countries in MENA are among the most informal economies in the world. Hundreds of citizens work behind the scenes in informal jobs where the pay is little to none. However, when businesses such as Burger King, McDonald’s and Wayback Burgers enter foreign countries, formal jobs emerge. As a result, hundreds of previous informal workers can now suddenly join the formal economy, thus slowly improving the country’s economy. Wayback Burgers in the Middle East could have a significant impact on employment and subsequently reduce poverty.

Informal jobs are most popular with youngsters between the ages of 15-24 in the Middle East and Africa. This number decreases as the children age and enter the formal workforce. 

As MENA and other foreign regions become more lenient towards the U.S., it creates more opportunities for companies to enter the fray and offer what they have. In this case, it is a chance for formal-informal workers to become part of the workforce.

WIEGO

Women in Informal Employment: Globalizing and Organizing (WIEGO) is an NGO that started in 1997. Its mission is to increase the voice, visibility and validity of the poor, especially women. Building and strengthening informal worker organizations, especially internal sector networks, has remained a central objective of the program for years.

WIEGO helped facilitate the formation of the National Association of Street Vendors in India (NASVI) in 1998. It also helped found the Kenya Association of Street Vendors and Informal Traders. Moreover, it has also formed many joint programs that deal with waste pickers, domestic workers and agriculture work.

In 2019, WIEGO composed a Halftime Report (a summary of its 12 years of action). This assessment came from information from 15 people who have directly involved themselves with WIEGO, key websites, a collection of statistics and analytical documents the WIEGO and other partner organizations produced. The report stated that since WIEGO’s formation 12 years ago, it has supported dozens of programs that deal with informal workers, promoted administrative justice, helped home-based workers’ rights and promoted street vendors’ rights.

Conclusion

Wayback Burgers is one of many U.S. businesses entering foreign soil. With Wayback Burgers in the Middle East and more U.S businesses entering foreign lands, the informal economy should be able to improve. With more jobs available, adults will be able to feed their families, get their children an education and begin to shatter the chains of poverty.

Of course, U.S. businesses are not the only way to help MENA or any other economy fight against poverty. NGOs all across the world are attacking many problems. In MENA, WIEGO primarily fights for women’s rights in the informal sector, but, of course, it is working for everybody else as well. Finally, Wayback Burgers, a business that started in Delaware, has entered foreign markets.

– Aaron Samperio
Photo: Flickr

Elderly Poverty in Mexico
In today’s society, people sometimes see the elderly as excess baggage rather than actual human beings. A place where this unfortunate reality is present is in Mexico, where 7.8% of the population is over the age of 65. Within this percentage, 41.1% live in poverty, 34.6 in moderate poverty and 6.6% ($1.90 a day) live in extreme poverty. Here is some information about elderly poverty in Mexico.

Poverty and Mental Health

About 29.2% of all elderly people live alone or with their spouses, be that in a small house or on the streets. The government covers only 46% (which only consists of the formal economy) of the elderly; the other 54% must struggle on their own. With no welfare, retirement plan and aid from the government, over 32,000,000 have no choice but to work past their prime. It is not uncommon for these elders to experience abuse, or for customers, employers or employees to take advantage of them. Due to this, many elderly are vulnerable to mental health issues such as depression, stress and loneliness that come from poverty. The day-to-day struggle to scrape up money and food for themselves and their families is at times a burden too heavy to bear. Results from an analysis of suicide rates in Mexico go as follows; from January 2014 to December 2015, 990 residents died from suicide, with 78.28% being males and 21.72% being females. The highest death rates amongst males were 20-24 and 75-79. For females, the highest mortality rate was from 15-19 years old.

Of course, there are ways both the elderly and their families can do to improve mental health. For the elderly that live with families, positive family dynamics (conversations, actions of kindness and a feeling of contribution) can greatly aid their mental health. For many seniors, nothing compares to the support from family. Another type of support is social support, which is support that comes from outside immediate family. This commonly comes in the form of encouragement from community members, co-workers and strangers.

Solutions

One reason elderly poverty in Mexico persists is that only 46% of them (within the Formal economy) have access to assistance programs. Nevertheless, it would be unfair to state that Mexico does nothing to help its elderly. INAPAM (Instituto Nacional para las Personas Adultos Mayores) is a popular program that allows any Mexican resident (over the age of 60) to acquire worthwhile discounts (10%-50%) on a wide range of goods and services such as food, medicine, transportation, clothing and recreational activities. Mexicans can apply easily if they have the necessary requirements. One specific requirement states that the person in question must present a form to confirm their address. Many elderly have no official home, so that fact can immediately disqualify them from applying.

Aztin is a nonprofit organization that focuses on providing needs such as education, nutrition, water and health. Since 1977, Aztin has worked closely with families trapped in poverty in the village of Tlamacazapa, Guerrero, Mexico, providing programs that vary from helping with dental hygiene, providing aid to those with special needs and implementing sanitation programs. Locals run Aztin with the idea of social participation in the hope that a sense of personal empowerment will begin with an inner spark of possibility and continue to grow.

Informal Workers and Poverty

For formal workers (workers officially hired, have a set salary, receive health benefits and work benefits), taking a day off is an option. However, 60% of Mexico’s workforce is informal and within this percentage there are 32,000,000 elderly that work informally, thus eliminating any chance of receiving the benefits listed above. It is not uncommon to find a woman well past her 80s working 60-hour shifts in a supermarket without it officially hiring her. As a result, her only way to earn money is from the tips from her customers. For informal workers old and young, this is the lifestyle that poverty has burdened them with. Some may have money, but it is often not enough to call savings. At most, the money may last a week, but after that, these individuals may not have any choice but to work. Necessity and poverty corners the elderly.

A popular program that helps the informal population is called Seguro Popular. This program is an income-based health-insurance program that is available to all non-salaried people who cannot access social security due to not having employment under the government. This includes independent workers (freelancers), people with disabilities and the elderly who do not participate in the labor force. This program provides financial assistance to over 50,000,000 Mexicans and is slowly improving access to health care, especially for the poor.

The Mexican government and its people are diligently working to find ways to provide for their elderly population. Through the continued work of Aztin and the Mexican government, elderly poverty in Mexico should reduce.

– Aaron Samperio
Photo: Flickr

Township BusinessesAlthough South Africa’s apartheid system ended in 1994, the effects of its segregationist policies against non-white citizens can still be seen today. Townships, settlements created by the government to segregate black South Africans from whites, are one of the most visible and lasting scars of the apartheid system. South Africa’s Population Registration Act in 1950 and Group Areas Act defined “non-white” racial groups as black South Africans, Coloreds and Indian South Africans, and forced their eviction from areas designated “white only” to three formally established townships. Today, more than 76 larger townships, each containing township businesses, border several South African cities.

According to the World Bank, townships today contain about half of South Africa’s urban population and 38% of its working-age citizens but as much as 60% of its unemployed. The communities were intentionally developed on the periphery of larger cities. These locations were chosen to separate them from the economic bustle of city centers. This socioeconomic isolation resulted in the development of what is considered an “informal” economic sector containing nearly 6 million businesses across the country.

Businesses in the Informal Economy

These township businesses, according to a 2018 report by the First National Bank, operate in the six primary sectors of grocery stores and stores stocking fast-selling consumer goods, taverns, hair salons, educational centers, micro-manufacturing and motor and cellular repair services. The majority of these enterprises are cash businesses that can make up to millions of rand in revenue. This is particularly true for those that operate in retail. For example, Ram Thapa’s is a South African beauty store and fast-food vendor that has an annual turnover of about 19 million rand ($1.36 million).

Despite a large amount of cash in circulation, the businesses in South Africa’s townships have been historically ignored by the country’s formal economic institutions, such as banks and corporations. These businesses operated untaxed and unregulated. However, the recent recognition of untapped business opportunities in townships and the benefits of collaboration between “informal” and “formal” businesses is marking a turning point in the relationship between these economic sectors in South Africa.

Hardships Within Townships

The recent movement to connect South Africa’s formal and informal economic sectors is closely linked with several issues townships face. These issues regard lack of credit, crime and poverty. The high unemployment and poverty rates in townships could be improved through the growth of township economies and informal institutions. Using poverty lines developed by Statistics South Africa, a 2012 report by T.J. Sekhampu from North-West University in South Africa found that 77% of households in townships were below the upper-bound poverty line. In addition, 50% are below the lower-bound poverty line. With the growth of township businesses through partnerships with formal economic institutions, these startling rates could decrease.

Additionally, a lack of access to credit has discouraged investments in township businesses that are necessary for growth. It has ultimately hindered the development of township economies. Government initiatives are focused on developing physical infrastructure and encouraging regulation. This would create the base for a safer, investment-friendly business environment without the constant threat of crime.

Financial Partnerships

The World Bank estimates that of the 5.78 million informal businesses in townships, which range in size from micro to medium, less than half have a bank account. However, formal institutions are taking steps to offer these businesses financial legitimacy and inclusion, starting with the cities they border. In 2018, FirstRand Ltd.’s First National Bank partnered with startup financial-tech company Selpal. It uses software and tablets to connect local stores with suppliers. The goal of this partnership is to use zero-fee offerings, as opposed to the traditionally high fees needed to set up business accounts, to attract owners of businesses located in townships.

Ultimately, this partnership signifies a push to connect informal businesses with external suppliers and formal economic institutions that will fuel economic growth for both parties. Economic advancements in townships foster lower crime rates, especially with the lesser amounts of cash business owners will have on-hand. In addition, they help to lower poverty rates by encouraging the growth of businesses that will require more employees.

I Am Emerge

However, Selpal and First National Bank are not the only firms providing township businesses with opportunities for increased economic inclusion and legitimacy. I Am Emerge, an agency specializing in connecting township markets to big business and vise versa, created “Vuelka”, an award-winning app that facilitates bulk purchases of goods sold by businesses in townships. Informal business owners order goods in bulk with cashless purchases.  This further enforces the necessity of Selpal and First National Bank’s goal to increase the number of owners with business accounts.

With continued efforts from organizations such as these, the economic limitations of informal township businesses can begin to lessen. They can pave the way for further equality across South Africa.

Isabel Serrano
Photo: Flickr

9 Facts About the Informal Economy in Latin America
The informal economy is a fluid area of work that people may drift in and out of. Certain companies may live in both the formal and informal job sector as well. The International Labor Organization (ILO) distinguishes between the informal sector and informal employment, stating that the former is an “enterprise-based concept and is defined by the characteristics of the enterprise in which workers are engaged” while the latter occurs on a case-by-case basis regarding the employee’s relationship to the enterprise. For example, some companies operate within the formal sector but hire certain employees “informally.”  In other words, one can define the informal economy as “firms and workers that stand outside a country’s tax and regulatory systems.

It is important to note that the informal economy is not synonymous with the black market or the underground economy. Additionally, the informal market is not necessarily illegal. However, many countries do not mandate the social benefits and protections included in the formal economy. Informal work can include a variety of jobs including street vendors, subsistence farmers, seasonal workers, industrial workers and others. Given this characterization, below are nine facts about the informal economy in Latin America.

9 Facts About the Informal Economy in Latin America

  1. A total of 140 million people work in occupations involving social vulnerability, limited rights and precarious conditions. According to the ILO, this number translates to roughly 50 percent of total employment in the region. It is a little less than the global average but more than double for the developed region.
  2. The percent of informally employed workers varies greatly across the region. Costa Rica had the lowest rate of informally employed workers as of 2013 at 30.7 percent. In addition, Guatemala had the highest at 73.6 percent.
  3. An International Monetary Fund study found four main contributing factors to the expansive informal economy in Latin America. Some of these factors include the heavy tax burden on corporations and individuals as well as minimum wage constraints. Another factor is the importance of agriculture because informal employment is much higher in the agricultural sector.
  4. Although there are poor and non-poor alike across the informal and formal sectors, empirical research has displayed that those working in the informal economy may be at a higher risk of poverty than those employed in the formal economy. The exact relationship between the informal economy and poverty is difficult to determine. This is due to a variety of circumstances that can affect poor households. For instance, the income an individual brings home may not technically be below the poverty line, however, it may not be sufficient to support five people. Regardless, informal employment is often unstable due to inconsistent wage earnings and a lack of social protection.
  5. The informal economy affects youth in Latin America. According to the International Labor Organization, there are an estimated 56 million Latin Americans in the age range of 15 to 24 in the workforce. A little over 7 million are jobless and 27 million are working informal jobs. Many quit without much of a choice as six out of the 10 jobs available to them are in the informal economy.
  6. In 2013, 44.5 percent of the non-agricultural informal employment in Latin America was male while 49.7 percent was female. However, globally males make up a higher percentage because they make up a larger portion of the workforce. In contrast, when looking across developing countries, 92 percent of all women have informal employment compared to 87 percent of all men.
  7. The informal economy in Latin America represented 34 percent of its average gross domestic product (GDP) from 2010-2017, which is higher than any other region in the world. This is true despite Latin America being in possession of one of the lower percentages of informal work, 40 percent compared to the 85.8 percent of employment in Africa.
  8. The informal economy has been reducing in Latin America and the rest of the world for the past 30 years. This could partly be due to a reduction in the challenges to register a business.
  9. Improving transit infrastructure and access to education can reduce the size of a country’s informal economy. A case study of Mexico City found that high transit costs can lead to an increase in the percentage of workers on the outskirts of cities choosing informal work. Furthermore, by improving access to cheaper and more efficient transit services, informal employment can decrease. Meanwhile, a case study in Peru showed that it is easier to obtain formal employment if one has higher education. This was true even for indigenous groups in the country who often face discrimination when entering the formal sector.

Informal work remains an ambiguous topic requiring more research. Nonetheless, it is important to keep in mind that the informal economy is not inherently bad. While many struggle because of their informal work, they often cannot afford the costs of transitioning to the formal sector. For instance, one may deem small businesses that have under 10 workers as informal, and therefore, they would not have to pay social benefits, thus saving them money. In other words, in some circumstances, informal workers may require additional support, but would not necessarily benefit from transitioning into the formal sector.

Scott Boyce
Photo: Wikimedia Commons

informal economy in South AfricaIf you walk down a busy street in any of South Africa’s major cities, you are bound to witness some type of informal economic activity. Whether it be a fruit stand, street-hawker selling earphones or an informal car wash business, the informal economy in South Africa is a crucial part of life for many of its residents.

The Importance of Informal Trade

Informal trade refers to any unregulated, unregistered, unprotected and untaxed activities, enterprises, or transactions. Informal jobs are an essential source of income for many poor South Africans—18 percent of working citizens work in the informal sector—a total of over three million workers. Additionally, the sector accounts for 18 percent of South Africa’s GDP. While these numbers are smaller than those of other developing countries, they emphasize the importance of informal trade in an economy with stark unemployment rates—26.6 percent as of 2016. Informal markets, like Durban’s Warwick Markets, provide jobs for those who are unable to find formal employment. Thousands depend on these markets for produce, cooked meals and clothing at affordable prices. Furthermore, the informal workforce in South Africa is overwhelmingly poor, young females. In fact, the poverty level in an area correlates positively with the proportion of people working in the informal economy.

The government recognizes the informal economy in South Africa as a viable and important form of employment and enabler of economic mobility for the country’s poor. Experience in the informal sector can help untrained people acquire skills, potentially aiding future integration into the formal sector. According to economist Loane Sharp, the informal economy in South Africa is growing faster than its formal counterpart. This prompts the government to pass policy encouraging and protecting the sector. The National Informal Business Upliftment Strategy of 2014 set up a framework of government assistance with skills development, marketing, technical support, infrastructure improvements and management training. This “inclusive growth” strategy focuses on enabling South Africa’s poor to participate in the economy rather than merely redistributing wealth through social welfare programs.

Non-governmental organizations are also working to improve conditions for informal traders. Asiye eTafuleni is an NGO in Durban that works with local government officials and vendors in the informal sector (particularly the Warwick Markets) to assist in developing infrastructure, consultations for urban planning and advocacy for informal workers. The organization also directs tourism to the Warwick Markets, educating foreigners and visitors on the functions and importance of the markets, and bringing the vendors eager customers. Asiya eTufuleni is a member of the Inclusive Cities mission, which focuses on uplifting and strengthening groups of working poor in the informal economy. The Inclusive Cities project aims to support the urban poor through lobbying, policy planning, and research. One of the ways the project does this is by advocating for “waste pickers’ rights,” the legal right of individuals to collect garbage to recycle into sellable goods. These rights are under threat by the privatization of solid waste management in many cities across Africa. Inclusive Cities also conducts research and analysis of the informal economy to support future endeavors and activism.

A Struggle for Informal Business Owners

There are many downsides to informal trade which make its participants particularly vulnerable. Informal business owners are often deterred from registering their enterprises by high taxes and strict regulations. Informal working conditions are unregulated by nature and therefore often poor. Dangerous locations, limited book-keeping skills and lack of insurance put informal traders at constant risk of losing their livelihoods. Average earnings for informal workers are less than half of what the formally employed earn. And although recent policies are attempting to expand this sector of the economy, informal workers still face significant intimidation and harassment by local law enforcement.

In July 2018, hundreds of informal traders protested by-laws which would prohibit trading in certain areas. These potentially harmful by-laws would allow law enforcement to confiscate the goods of traders without permits. The leader of the activist group responsible for organizing a march on Durban City Hall complained that the traders themselves were not included in the creation of these laws. The permit allocation procedure, he says, is corrupt, with officials soliciting bribes in exchange for permits.

It is clear that despite efforts by the government and NGOs, conditions of the informal sector have remained unsatisfactory. The disconnect between national policy, like the National Informal Business Upliftment Strategy, and local municipalities is one obstacle in the way of a safer, healthier informal sector. The informal economy in South Africa provides crucial wages for the country’s poorest and most vulnerable populations; resources should be channeled to encourage and protect laborers and merchants in the sector.

– Nicollet Laframboise

Photo: Flickr