LIVELIHOODS & URBAN FORM: MUMBAI IN A COMPARATIVE PERSPECTIVE SESSION 1: JANUARY 28 THEORIES, DEBATES & REPRESENTATIONS OF THE INFORMAL ECONOMY MARTY CHEN.

LIVELIHOODS & URBAN FORM:MUMBAI IN A COMPARATIVE PERSPECTIVE

SESSION 1: JANUARY 28THEORIES, DEBATES & REPRESENTATIONS OF THE INFORMAL ECONOMY

MARTY CHENLECTURER IN PUBLIC POLICY, HARVARD KENNEDY SCHOOL

AFFILIATED PROFESSOR, HARVARD GRADUATE SCHOOL OF DESIGNINTERNATIONAL COORDINATOR, WIEGO NETWORK

PRESENTATION

Informal Economy Definitions Debates

Urban Informal Employment: Size & Composition Developing World Urban India Mumbai

Informal Livelihoods & Urban Planning Different Stances Exclusion or Inclusion?

But first a few words about my background – what I bring to this course

PERSONAL BACKGROUND

Professional Career: development anthropologist whose focus = livelihoods and employment of the working poor, especially women 1970s: Head of Women’s Program, BRAC, Bangladesh 1980s: Field Representative of Oxfam America, India & Bangladesh since 1987: Lecturer in Public Policy at Harvard Kennedy School since 1997: International Coordinator of WIEGO Network

Perspective on Informal Economy “informal is normal”

majority of workforce/units in developing countries are informal majority of informal workers/units are not illegal majority of informal workers are poor; majority of working poor are informally

employed informal economy contributes to the economy (urban, national, global)

but informal workers/units excluded in economic and urban planning

INFORMAL ECONOMY:

DEFINITIONS & DEBATES

INFORMAL SECTOR, INFORMAL EMPLOYMENT, INFORMAL ECONOMY

The informal economy is the diversified set of economic activities,

enterprises and workers that are not regulated or protected by the state;

and the output from them.

There are three related official statistical terms and definitions which are often used imprecisely and interchangeably by analysts and observers: • informal sector refers to the production and employment that takes place in

unincorporated enterprises that might also be unregistered or small (1993 ICLS)

• informal employment refers to employment without social protection (i.e. without employer contributions) both inside and outside the informal sector: i.e., for informal enterprises, formal enterprises, or households (2003 ICLS)

• informal economy refers to all units, activities, and workers so defined and the output from them (ILO 2002).

INFORMAL WORKFORCE:STATISTICAL CLASSIFICATION

Self-Employed in Informal Enterprises (i.e. unincorporated enterprises that may also be unregistered and/or small) employers own account operators unpaid contributing family workers members of informal producer cooperatives

Wage Workers in Informal Jobs (i.e. jobs without employment-linked social protection) informal employees of informal enterprises informal employees of formal firms domestic workers hired by individuals/households without

employer contributions

INFORMAL ECONOMY:THEORIES & DEBATES

Who characterizes the informal economy? survivalists (Dualists/1972 ILO Kenya Employment Mission) plucky entrepreneurs (Legalists/Hernando de Soto & Voluntarists/William Maloney) subordinated or exploited workers/units (Structuralists /Portes and Castells)

What causes informality? voluntary choice of informal workforce (Voluntarists ) hostile regulatory environment (Legalists) or complicity of government (Structuralists) hiring/contracting practices of formal firms (Structuralists) lack of employment opportunities and/or necessary skills (Dualists)

What are the linkages between the informal economy, the formal regulatory environment and the formal economy? with formal regulations

avoiding regulations (Voluntarists & Legalists) lacking protection & promotion (Structuralists)

with formal firms/formal economy no links/limited contribution (Dualists & Voluntarists) no links/potential contribution (Legalists) many links/significant contribution (Structuralists)

URBAN INFORMAL EMPLOYMENT:

SIZE & COMPOSITION

INFORMAL EMPLOYMENT AS% OF NON-AGRICULTURAL

EMPLOYMENT 2004-2010

Average & Range by RegionsSouth Asia: 82%

62% in Sri Lanka to 84% in India Sub-Saharan Africa: 66%

33% in South Africa to 82% in MaliEast and Southeast Asia: 65%

42% in Thailand to 73% in IndonesiaLatin America: 51%

40% in Uruguay to 75% in BoliviaMiddle East and North Africa: 45%

31% in Turkey to 57% in West Bank & Gaza Source: Vanek et al. WIEGO Working Paper No. 2, 2014

Source: Herrera et al 2011; Esquivel, 2010; Wills, 2009 (WIEGO Working Papers)

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INFORMAL EMPLOYMENT AS% OF URBAN EMPLOYMENT

URBAN INDIA:RECENT TRENDS

Urbanization in India: share of India’s population living in urban areas

o 2000: 28 per cent (290 million)o 2008: 30 per cent (340 million)o 2030: 40 per cent (590 million)

Source: McKinsey Global Institute 2010 Urban Employment in India:

increase in services: both high-end IT & low-end personal services

decrease in manufacturing: de-industrialization of some cities 80% of urban employment = informal (2011-12)

URBAN EMPLOYMENT INDIA: FOUR GROUPS OF

INFORMAL WORKERS. 2011-12

% of Urban Employment % of Urban Informal Employment

Total Male Female Total Male Female

Domestic Workers 5 2 13 6 3 17

Home-Based 14 10 32 17 12 40

Workers

Street Vendors 4 4 3 5 5 3

Waste Pickers 1 .5 2 1 1 3

ALL FOUR 23 17 49 29 21 62Source: Chen and Raveendran WIEGO Working Paper # 7 2014

Total Employment in Mumbai by Status of Employment & Enterprise Unit

(% distribution) 2011-12

Category AG FE IE HH Total

Total Employed 0.2 40.1 51.4 8.4 100.0

Formal 0.0 48.2 2.2 0.0 20.5

Informal 100.0 51.8 97.8 100.0 79.5

Wage Workers 0.2 39.0 19.8 8.4 67.3

Formal 0.0 47.4 5.8 0.0 29.2

Informal 100.0 52.6 94.2 100.0 70.8

Self-Employed 0.0 1.1 31.6 0.0 32.7

Employers 0.0 26.5 12.6 0.0 13.1

Own-Account Workers 0.0 51.3 77.5 0.0 76.6 Contributing Family Workers 0.0 22.2 9.9 0.0 10.3

Source: G. Raveendran for WIEGO Network

Total Employment in Mumbai by Industry Group & Employment Type (% distribution) 2011-12

Industry Group

Male Female

Formal Informal Formal Informal

Agriculture 0.0 0.2 0.0 0.3

Manufacturing 5.3 19.2 2.5 21.4

Home-Based 0.0 10.9 0.0 54.6

Construction 0.4 5.1 0.0 0.3

Trade 1.1 19.7 0.0 9.0

Street Vending 0.0 21.0 0.0 16.2

Non-Trade Services 15.0 33.7 12.4 54.0

Transport 29.2 29.6 0.5 1.7

Domestic Workers 0.0 12.1 0.0 55.4

Waste Pickers 0.0 1.2 0.0 3.9

Total Employed 22.1 77.9 14.9 85.1

Source: G. Raveendran for WIEGO Network

Informal Employment in Mumbai by Industry Group & Sex

(non-agricultural, % distribution) 2011-12

Industry Total Male Female

Manufacturing 24.7 24.6 25.2

Construction 5.0 6.5 0.4

Trade 21.7 25.2 10.6

Street Vendors 4.4 5.3 1.7

Non-Trade Services 48.1 43.3 63.5

Transport 10.0 12.8 1.1

Waste Picking 12.5 5.2 35.2

Domestic Work 1.0 0.5 2.5

Total 99.8 99.8 100.0

Source: G. Raveendran for WIEGO Network

Specific Groups of Informal Workers in Mumbai as Share of Total and Informal Employment

(non-agricultural, %) 2011-12

Group

% of Urban Employment % of Urban Informal Employment

Total Male Female Total Male FemaleDomestic Workers 0.8 0.4 2.1 1.0 0.5 2.5Home-Based Workers 8.3 5.0 19.5 10.4 6.4 22.9

Street Vendors 3.5 4.1 1.5 4.4 5.3 1.7

Waste Pickers 9.9 4.1 30.0 12.5 5.2 35.3

All 22.5 13.6 53.1 28.4 17.5 62.4

Source: G. Raveendran for WIEGO Network

INFORMAL LIVELIHOODS

&

URBAN PLANNING

INFORMAL LIVELIHOODS & URBAN POLICIES

Urban informal livelihoods are… o impacted by urban or municipal plans, policies,

regulations and practices – more so than by labor laws or national policies

o often overlooked or undermined by municipal authorities and urban planners + excluded from or destroyed by urban renewal schemes

URBAN INFORMAL LIVELIHOODS:DIFFERENT POLICY STANCES

Conventional = exclusionaryignore/turn a blind eyerepressrelocateregulate

Alternative = inclusionaryrecognizeprotectpromote

EXCLUSIONARY URBAN POLICIES:THREATS TO URBAN LIVELIHOODS

Threats to livelihoods are often sector-specific…o home-based producers: lack of basic infrastructure

services, especially irregular supply of electricity + single-use zoning regulations + slum relocations

o street vendors: insecure workplace + abuse of authority by local officials and police, especially bribes and confiscation of goods + evictions and relocations

o waste pickers: lack of rights of access to waste + lack of integration into solid waste management system

o all three groups: lack of accessible/affordable transport + lack of integration into local economic planning

INCLUSIONARY URBAN POLICIES:SUPPORT TO LIVELIHOODS

Home-Based Workers: quality housing + de facto tenure + basic infrastructure services

Street Vendors: legal access to public space in natural markets

Waste Pickers: inclusion in solid waste management

All: recognition of contributions + representation in planning + affordable/accessible transport

THIS COURSE

Designed to investigate: from a comparative perspective different sectors of urban informal livelihoods different urban planning and design approaches to

urban informal livelihoods promising examples of inclusive urban planning and

design in support of urban informal livelihoods

Looking forward to investigating these topicstogether.

THANK YOU!