WIEGO’s Mike Rogan and Laura Alfers discuss how the pandemic has underscored the importance of social protection and public services to guarantee the livelihoods of women and men working in the informal economy, as WIEGO prepares to join the International Labour Conference where these topics will be debated.
Workers in the informal economy are often thought of as the “missing middle” when it comes to social protection: unable to contribute regularly to social insurance schemes because of their low incomes, yet disqualified for having a job from safety net programmes targeted at the most vulnerable. This 61 per cent of the global labour force was hit hardest by the pandemic. A WIEGO COVID-19 study found that in April, when most countries and cities were under lockdown, 80 per cent of earnings were lost for these workers, many of whom lived below their country’s national poverty line before the pandemic – which is nothing short of catastrophic.
In the middle of 2020, these workers were still earning 45 per cent less than they were prior to the pandemic. Again, it is really important to remember that they were earning just around the poverty line then, so this is still a great concern.
But one positive has come out of the COVID-19 response: we are finally starting to see a much stronger recognition of the need for social protection to cover informal workers. As lockdowns were rolled out around the world, it became evident that workers without any form of social insurance or access to cash grants were really not going to be able to stay at home – which would undermine the entire purpose of the lockdowns. That really brought home the importance of ensuring that social protection is extended to this group and many governments acted on that. Now, there is an opportunity to build on these relief measures to ensure universal social protection.
According to the World Bank, about 1,400 new social protection measures were initiated in response to the crisis and a not insignificant number of those were trying to reach informal workers. However, findings of the WIEGO study show that, when you actually look at the reach of those programmes, less than half of the surveyed workers reported receiving relief in cities where governments announced relief measures. And even where workers did receive cash for food or other relief, in the majority of cities it didn't actually make a significant impact on the levels of reported food security. Workers were still experiencing hunger in their households on a similar level to those who did not receive it.
There were some exceptions to this: in two of the Indian cities, Ahmedabad and Delhi, we did see that those who received food relief had lower levels of reported food security.
Informal worker organizations have played – and continue to play – different roles in the relief response: from participating in the consultation and dialogue to ensure that relief efforts actually did reach informal workers, to providing assistance with selection and identification of recipients. Grassroots organizations also often provide essential services that amplify the impact of the social protection measures, especially through the provision of last-mile support – ensuring the connection between the benefits and the beneficiaries, working to establish more effective connections between their constituencies and the benefits on offer, and facilitating access to relief.
One of the first examples we saw was in Thailand, where the state announced benefits for informal workers yet the application process was online and many of HomeNet Thailand's older members struggled to use technology to apply. The organization worked hard to ensure that these workers were able to apply by assisting with online registration.
There are at least two things that could be done by governments to support these grassroots organizations providing such critical support. Existing connections between the state and grassroots organizations are built on trust which takes years to build but, once you have it, it can be a really effective way of mobilizing relief efforts across the state and society. One thing to do would be to institutionalize consultation, engagement and dialogue: a regular forum for engagement between the state and grassroots organizations about what is needed. That is crucial for building trust. Second, budgeting needs to take place to support last-mile services through social protection programmes, as a way of ensuring that the work done by grassroots organizations is not unpaid work and that it is seen as vital to the roll-out of social protection.
We also have to look more closely at the way social protections have been set up, with informal workers falling through the cracks. We need to adopt more flexible contribution criteria that reflect the capacity of workers in the informal economy. Quality public services, such as health and child care, are also absolutely crucial to protecting – especially women’s – incomes: income levels mid-2020 were still much lower for workers who reported an increase in care work, which was particularly the case for women.
It is important to build momentum of this moment in history, when our systems for protecting workers were cut so short, particularly given that many of the mechanisms such as furlough schemes, unemployment insurance benefits and work-from-home contingency plans are really only linked with a minority of workers in the world. Those three things don't apply to informal workers, who have mainly been left to fend for themselves. A lot of workers fell right through the cracks and, without the daily earnings on which they survive, many of them have dug deep into their savings and it will take them many years to recover. If we can design systems that don't leave out the majority of workers, the global economy would be in a stronger position to recover from these types of setbacks in the future.
Read these two Policy Insights, which include the information referred to in this piece. The Triple Crisis: Impact of COVID-19 on Informal Workers’ Care Responsibilities, Paid Work and Earnings and Informal Workers and the Social Protection Response to COVID-19: Who got relief? How? And did it make a difference?
This blog is based on a conversation between Mike Rogan, Interim Director of the Urban Policies Programme, Laura Alfers, Director of WIEGO’s Social Protection Programme, and Cyrus Afshar, Social Protection Officer within WIEGO’s Social Protection programme, on WIEGO’s Social Protection Podcast, of which Cyrus is the host. Listen to the podcast episode here.
Photo: Abena Konadu is a trader at Tema Lorry Station Market in Accra. Before COVID, she could earn about 200 to 300 cedis in a day as total sales for the day but after the crisis, she does less than 100 cedis a day. Credit: WIEGO