Washington, DC — Informal workers – from street vendors and waste pickers to home-based workers that manufacture garments and other goods – represent 50 to 80 percent of urban employment worldwide. In the global south, where urbanization is happening most rapidly, they generate up to half of non-agricultural GDP.
The latest working paper in the World Resources Report, " Towards a More Equal City ," "Including the Excluded," reveals how cities in the global south can create policies, legislation and practices that support informal livelihoods and promote economic productivity and environmental sustainability.
Written in collaboration with Women in Informal Employment: Globalizing and Organizing (WIEGO), the paper finds that more inclusive approaches are crucial, as cities cannot become more equal or more economically productive if they exclude the vast majority of their workforce – especially the working poor.
Cities have historically stigmatized informal workers as avoiding taxes and regulations, representing unfair competition to formal firms, appropriating public space, and creating congestion, unsanitary conditions, and public health risks. As a result, they are largely invisible. City officials rarely recognize the economic activity of informal workers as a livelihood strategy or as a contribution to the formal economy.
"As urban population growth continues, and often exceeds employment growth, struggling and emerging cities need to recognize and value the informal economy as an integral contributing component of the urban economy," said Victoria A. Beard, co-author of the study and Fellow at WRI Ross Center for Sustainable Cities. "The informal economy creates more jobs than the formal economy, particularly for low- and middle-income groups, and significantly contributes to economic growth."
In "Including the Excluded," the authors examine innovative ways some cities have found to work with home-based workers, street vendors and waste pickers as examples to replicate. For example, the Self-Employed Women's Association, a trade union of 1.5 million women informal workers across several Indian cities, is collaborating with city governments to provide core public infrastructure services by organizing workers and linking them to specific city departments responsible for housing, electricity, sanitation and water. Across several Latin American cities, waste picker organizations have received official recognition and support, including buildings to sort and store waste, vehicles to transport waste, and municipal contracts.
"The politics of change should not be underestimated," said Martha A. Chen, co-author of the study, International Coordinator at WIEGO, and Lecturer in Public Policy at the Harvard Kennedy School. "The best way forward is to include organizations of informal workers in the formal processes of urban governance and management to negotiate policies and plans that balance competing interests and promote social and economic justice."
Four key recommendations emerge from these examples of positive integration:
- Increase informal workers' access to public services, public spaces and public procurement. To better harness and encourage economic growth, city governments and local officials should acknowledge the economic contribution informal workers make to the urban economy and reduce harassment and penalization. Cities should provide core public services to informal workers to make their workplaces more productive; grant regulated access to public space; and allow organizations of informal workers to compete for public procurement.
- Reform laws and regulations so they support informal workers. City governments and local officials should make it easier for the informal self-employed to register their businesses, as well as make taxation progressive and transparent, and assess what taxes and operating fees informal workers already pay. And they should extend benefits to workers in exchange for paying taxes.
- Include informal worker leaders in participatory policymaking and rule-setting processes. Cities should integrate informal economy activities into local economic development plans and urban land allocation plans. Informal settlements are often thriving industrial hubs and house many home-based businesses. Cities should also recognize and protect natural markets for vendors, and recognize that waste pickers contribute to cleaning streets, reclaiming recyclables and reducing carbon emissions.
- Support coalitions for change. All of the inclusive approaches highlighted in the paper were brought about by coalitions for change comprised of organizations of informal workers, supported by activist allies. Coalitions for change help monitor and highlight the situation on the ground, write letters to the press, organize policy dialogues and provide technical assistance to advocacy campaigns.
"Cities will add 2.5 billion more people by the middle of the century," said Ani Dasgupta, Global Director for WRI Ross Center for Sustainable Cities."Finding more ways to bring informal workers out of the shadows – to recognize their worth and encourage greater public benefit from their labor – is essential to a future that's productive, equal and sustainable."
For more on the "Towards a More Equal City" research series, visit citiesforall.org .
About the World Resources Report
The World Resources Report is the flagship publication of World Resources Institute and has been published in various formats since 1986. Each edition focuses on one aspect of the Institute's work. The latest report to be published comprised a series of research papers and a synthesis report (in press) on Creating a Sustainable Food Future. Earlier reports have covered climate adaptation, poverty, and environmental change and human health, among other issues. For more on "Towards a More Equal City," visit citiesforall.org .
About World Resources Institute
WRI is a global research organization that spans more than 50 countries, with offices in the United States, Brazil, China, India, Mexico and more. Our more than 550 experts and staff work closely with leaders to turn big ideas into action at the nexus of environment, economic opportunity and human well-being. www.wri.org .
About WRI Ross Center for Sustainable Cities
WRI Ross Center for Sustainable Cities helps create accessible, equitable, healthy and resilient urban areas for people, businesses and the environment to thrive. Together with partners, it enables more connected, compact and coordinated cities. The Center expands the transport and urban development expertise of the EMBARQ network to catalyze innovative solutions in other sectors, including water, buildings, land use and energy. It combines the research excellence of WRI with 15 years of on-the-ground impact through a network of more than 250 experts working from Brazil, China, Ethiopia, India, Mexico and Turkey to make cities around the world better places to live. More information at www.wrirosscities.org .