According to a study conducted in 12 cities around the world, from Accra, Ghana, to Lima, Peru, nearly 70% of informal workers reported zero income during periods of lockdown linked to COVID-19. In the first month of the pandemic alone, informal workers living in poverty doubled from 26% to 59%, and their average incomes were 21% of pre-COVID-19 figures in 11 cities.
Yet, as much of the world’s 2 billion informal workers lost their income, in many cases they did not receive recovery assistance like formal workers; only 42% received government food assistance and 41% received cash assistance. This gap persists as governments strategize for their economic recovery. “There is a real risk that the economic recovery will come at the expense of informal workers,” says Sarita Gupta, director of the Future of Work (ers) program at the Ford Foundation, a philanthropic institution focused on improving human well-being. .
Today, the Ford Foundation is launching a $ 25 million fund to invest in the global movement to help protect informal workers around the world. The five-year grant will help fund organizations that work on behalf of these workers, so they can continue their advocacy when needed most. The hope is that the grant will allow grassroots efforts to continue pushing policy makers to include informal workers in their long-term economic stimulus plans, including strengthening social and labor protections for a group that has continually been excluded.
Informal workers is the term given for 25% of the world’s population – and 58% of women – who are employed as domestic workers, home manufacturers, waste pickers and street vendors. In these roles, many are not officially registered or regulated by the government and therefore are not protected by any work or social program that may exist. In the developing world, 90% of employed people are considered informal; even in the United States, the figure is as high as 20%. âThey don’t exist in the shadows,â Gupta says. “They are simply the economy.”
Due to the lack of protection, they are likely to fall below the poverty line whenever a crisis strikes, even though their work has been essential during the closures, to care for families and to provide and produce affordable food. âThese workers have long lived on the margins,â Gupta says, âand COVID has driven informal workers to the systemic limit.â Because they are not registered by the government, they do not participate in taxation; so, for example, when US cash assistance payments were distributed through the IRS, these workers received no funds.
They are often excluded due to systemic flaws or historical discrimination. âIt is assumed that these are workers who bypass a system,â says Gupta, âwhen a system does not actually existâ. In the United States, domestic and agricultural workers, often black, were deliberately excluded from the Fair Labor Standards Act in the 1930s.
Nonprofits around the world are working to ensure that workers today enjoy fair protection. The Ford Foundation grant will go to WIEGO, a policy research network that aims to empower the working poor, which will then give the money to its network partners around the world, including the International Federation of Domestic Workers and Streetnet. International, which represents street vendors. . Where people actually received their government benefits during the COVID-19 crisis is through these organizations. They strive to influence policy change for the informal sector, advocating for a minimum wage as well as access to paid sick leave and other benefits.
There have been some successes. In New York, street vendors persuaded city council to issue an additional 4,000 street vendor permits, erasing the cap that had been in place since 1983. In Argentina, informal workers’ unions applied to participate in the Social Committee of emergency, guaranteeing increased food aid for most of the vulnerable. And in Brazil, a direct payment grant, the Auxilio Emergencial, which paid more than four times the poverty line, reached many informal economy workers among the total 66 million beneficiaries.
Advocacy work is arguably even more important as governments craft their longer-term visions for recovery based on lessons learned from the pandemic. And, worryingly, more than 100 governments have switched to austerity policies, tightening budgets even in times of crisis, taking the greatest toll on the working poor. It is imperative that these governments see that a strong informal sector is a boon to economies, Gupta says, noting, âThey need a seat at the table. They need a voice in the design and, frankly, the implementation of these types of policies. “