From Poverty to Power Green, Oxfam 2008 - weman

FROM POVERTY TO POWERNOBODY’S FORMAL ANY MORE‘In La Paz, everyone works, but no-one has a job,’ jokes one Boliviangovernment official. According to the International LabourOrganization (ILO), formal, recognised non-agricultural employmentis in the minority across the developing world, varying from 45per cent of the working population in Asia to a mere 30 per cent insub-Saharan Africa. 102 In many countries, the so-called ‘informaleconomy’ has mushroomed in recent decades, driven by a combinationof technological shifts, globalisation, and government policy. InMalawi, only one in every 250 people has a formal job in the privatesector. 103During Latin America’s recession in the 1980s and the adjustmentof the 1990s, the informal economy acted as a gigantic sponge, soakingup those who had been sacked, or who were entering the workforce forthe first time. As Latin America’s streets became clogged with vendorsdesperately seeking customers, incomes plummeted. In La Paz, where60 per cent of the workforce is now in the informal economy, there isone street trader for every three families, and there are just not enoughbuyers to go round. 104In part, the informal economy flourishes because of the ‘barriers toentry’ for formal business. In Angola, starting a new business requires13 different procedures and 124 days, and costs almost 500 per cent ofthe average yearly income. By contrast, in the USA the same processrequires just five procedures, five days, and 0.7 per cent of the averageincome of an American. Surveys of self-employed workers and‘micro-enterprises’ show that they often prefer the informal sector asit offers more autonomy and flexibility. The picture is different, however,for waged workers in the informal economy, who usually hankerafter a formal job with a contract and benefits. 105Even when workers have an employer, work has become moreprecarious; increasing numbers of people are employed on a temporaryand casual basis, often without clear employee status. Their jobs arecharacterised by low or unstable wages, few if any benefits, little accessto social protection programmes, lack of coverage by labour legislation,and little or no respect for the internationally recognised rights tofreedom of association and collective bargaining. 106152