A Tale of 10 Cities: Findings from the Informal Economy Monitoring Study

The global policy-research network Women in Informal Employment: Globalizing and Organizing (WIEGO) and the Inclusive Cities project presented the results of their impressive Informal Economy Monitoring Study. The analysis was conducted in ten cities in the global South to answer the question "How do urban policies and practices, economic trends and value chain dynamics impact informal employment in the global South, and how can urban policies and practices respond effectively to the growing informal workforce?"

The study used both qualitative (focus groups) and quantitative (150 workers per sector/cities) research methods. The conceptual framework was to identify and measure the impact of key drivers, both positive and negative, that impact working conditions in three informal sectors: home-based workers, street vendors, and waste pickers. Eighty one percent of the study's respondents live in a household that depends on informal work, so negative factors that decrease income have a big impact on their livelihoods.

Three categories of driving forces were determined:

  • Macroeconomic trends, including inflation, low or fluctuating demand, and competition. High costs of inputs are hard for street vendors to absorb because it’s difficult for to them to pass on this increased cost to consumers. Consumers are used to negotiating prices, and there's too much competition. According to a respondent in Lahore: "Inflation is killing us."
  • City government policies and practices, including lack of basic infrastructure, like irregular electricity or lack of transportation, insecurity of workplace and abuse of authority, like harassment, merchandise confiscation, and policy environment, which affects access to waste, and workplace infrastructure. One respondent from Bogotá, describing the policy environment, said: "This country goes on favoring multimillionaires".
  • Value chain dynamics, including low piece rates (affecting home-based workers because they have to cover the non-wage costs of production), high interest rates (since street vendors need working capital on a daily basis, and moneylenders and wholesalers charge very high rates with difficult repayment conditions), and unstable selling prices for recyclable materials (affecting waste pickers).

The presentation went on to describe the importance of membership-based organizations in mitigating these drivers, the many links between the formal and informal economy, and the ways in which informal workers saw themselves as contributing to society, like through taxes, cleaning the area around their stalls, and protecting the community from thieves.

The study's results have already made a difference on the ground, as many organizations have used the data to identify needs that were voiced in focus groups, clarify public policy priorities, and inform policy dialogues in support of workers.

Caroline Moser of the University of Manchester, special advisor to the project, concluded by providing three important methodology lessons for doing this type of collaborative, participatory research:

  • Interestingly, the focus groups were used not only for anecdotal evidence, but also for providing quantitative data (meaning that the focus groups had to be comparable across cities and types of workers).
  • Capacity building: in each of the ten cities, five experts were trained (in three different languages!) not only on how to get data, but also how to analyze it.
  • Finally, there's no replacement for robust quantitative data.

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