Informal workers need much more protection
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In developing economies, unofficial and home-based workers are vulnerable to exploitation, health hazards and other risks, on top of their already poor wages
A large majority of people in the developing nations are below the poverty line. They are deprived of adequate access to such basic needs as health, education, housing, food, security, employment, justice and equality. Sustainable livelihoods and the social and political participation of vulnerable groups are the major problems in developing nations. Governments have failed to guarantee these fundamental rights.
In India, almost 94 per cent of women workers are engaged in the informal sector; about 20 per cent of these women work in urban centres. Nearly 50 per cent are the sole bread-winners for their families. Another startling fact is that out of all women workers, a mere 7.5 per cent are members of registered trade unions. Many have to work unpaid even outside their homes, for five to eight hours a day, to help their families. Most of them lack proper training; they have very few options in terms of gainful employment. In a word, women workers in the informal sector are poor, perhaps the poorest among the poor, uneducated and weak.
The informal economy is now an important source of livelihood for many people in developing countries affected by poverty and unemployment. Both micro- and macro-studies have illustrated that the informal economy is growing rapidly, and it forms an integral part of the modern capitalist economies, particularly in developing and Third World countries.
Informal employment takes the form of 72 per cent of non-agricultural employment in sub-Saharan Africa, 65 per cent in Asia and 51 per cent in Latin America. The fluctuation of global markets, the impact of globalisation and the dependence on capitalist-intensive technology have contributed to the growth of the informal sector everywhere. Lack of employment opportunities, minimal education, chronic poverty and cultural and religious constraints have forced many women to engage in this type of work.
Home-based work is generally considered to be an economic activity undertaken within the periphery of the residence of the producer and the worker. The usual activities are sewing of garments and stitching of embroidery and laces, rolling of cigarettes, weaving carpets, peeling of shrimp, preparing food, polishing plastic, processing insurance claims, and assembling artificial flowers, umbrellas and jewellery.
In this sector there is little need for expensive capital equipment that has to be used and shared by the workers. This rules out production economies. Strong social networks prevent individual workers from violating contracts, facilitating lower transactions costs. The output is standardised and monitored by both the buyer and seller. Another feature is that transactions are fairly frequent.
India has numerous home-based women workers subsisting on meagre earnings, with little or no legal and social protection or benefits. Because they work in isolation, they are vulnerable to exploitation by contractors and sub-contractors. Irregular work orders, arbitrary rejection of goods and delayed payments are also common. Unable to invest in new machinery or training, their productivity suffers. As they work out of their homes, they are directly affected by urban housing, health and environmental issues.
Scant attention has been paid to the nature of the contract between the home-based worker and the contractor. The contract, in most cases, is neither explicit nor coded; it is based on a verbal understanding and trust between the parties. Not that informal contracts are undesirable; they can be beneficial to all concerned. However, this can have negative implications in the absence of either outside options for the home-based worker or an impartial enforcement entity.
This is the crux of the problem. Given the poor economic conditions, it is unlikely that significant options can be generated. Moreover, given our experience with government functionaries, it is also unlikely that swift and impartial justice can be expected.
Many women toil in crowded homes with poor lighting. There is no space to store raw materials or finished goods, the roof often leaks, or the fragile structure cannot withstand strong winds. There is no proper drainage or garbage disposal facility. Poorly designed roads and drains result in the backflow of dirty monsoon water, damaging goods and supplies and disrupting production. Poor housing not only affects the family’s health, but also its income.
The lack of urban services such as electricity, water supply, sanitation and transportation directly affects the residential environment and the potential for livelihoods. Precious hours with income-generating potential are spent in collecting water, added to the cost of transporting raw material and/or finished goods. This further depletes the already meagre earnings of the poor.
Power supply, if at all, is often inadequate. Many home-based workers depend on illegal connections. Another matter of serious concern is occupational health and safety. Home-based workers are often overworked and exposed to dangerous chemicals.
It is difficult to keep track of injuries or health issues, as these are seldom categorised as workplace incidents.
Women workers in the informal sector must emerge from the shadows. Policy-makers must address the problems of home-based workers, who can have a direct effect on poverty alleviation and employment generation.
Home-made products such as handicrafts and textiles have an export potential too. Effective zoning regulations can facilitate home-based work. Unless home-based production is categorised as permissible in residential areas, unchecked use of zoning regulations will stigmatise urban workers as informal, if not illegal. They can even run the risk of socio-economic exclusion and exploitation.
Therefore, it is imperative to reform the manner in which cities are planned and built, and move towards a concept of inclusive cities – with space and livelihood opportunities for even the most marginalised workers.
Anupriyo Mallick is a professor at the Eastern Institute for Integrated Learning in Management, Kolkata.
