Organizing in the Informal Economy

Organizing gives the poorest segments of the working class – those working in the informal economy, and especially women – a means through which to be seen and heard by decision makers who have the power to affect their lives.

Increasingly, informal workers are coming together to form Membership-Based Organizations (MBOs). MBOs are “those in which the members elect their leaders and which operate on democratic principles that hold the elected office bearers accountable to the general membership” (from Marty Chen et al. 2007, Membership-Based Organizations of the Poor). An MBO can be distinguished from a conventional NGO which, however well-intentioned or effective, operates as an outside entity and is not comprised of a membership base of those it serves. As Ela Bhatt, founder of SEWA, has said of MBOs: “... the members ... are the users of the services of the organization, the managers and its owners.” 

The History of Organizing Informal Workers

Organizing informal workers has a long history. In Organizing Informal Workers: Historical Overview, a paper presented to the WIEGO workshop on “Organizing Informal Workers: Building and Strengthening Membership-Based Organizations” in March 2011, Dan Gallin noted: “… there is nothing special in history about organizing informal workers, for the simple reason that in the beginning all workers were informal” (Gallin 2011: 1).

At the dawn of the industrial capitalist age in eighteenth-century Europe, and later elsewhere in the world, the whole economy was informal. Workers organized into unions, fought and won rights and the situation started to become formalized. However, many women were left out of this process and remained in what became known as the informal economy, working in low paying jobs such as domestic work and home-based work (Gallin 2011). Read Dan Gallin’s paper on the origins of organizing in the informal economy, including stories of women workers organizing.

The organization of informal workers internationally is relatively recent phenomenon. It took off in the 1990s, but has its roots in the formation of the Self Employed Women’s Association (SEWA) in 1972.

Key Events in the Recent History of Organizing

1970s: India’s SEWA was the pioneer organization, gaining recognition as early as 1972 as a trade union in Gujarat State of India.

1980s: SEWA began to make headway in the international trade union movement when it gained affiliation to the International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers (IUF)  in 1983. This was an important step – for the first time, own account, informal workers were recognized within the trade union movement as workers and with a right to form trade unions. Domestic workers had been organizing into unions in many parts of the world but their voice was very weak.  In 1988 the regional Latin American and Caribbean Confederation of Household Workers (CONLACTRAHO) held its first Congress, giving a more powerful voice to domestic workers in that region. In this period waste pickers also began organizing into cooperatives in Latin America.

1990s: Home-based workers came to the fore in the 1990s, setting up HomeNet International (1994) and successfully campaigning for an ILO Convention on Homework (C177), adopted in 1996. The pace quickened when WIEGO was established to support informal workers in 1997. Street vendors held their first international conference in 1995, and in 2000 the StreetNet Association was formed, paving the way for the launch of StreetNet International in 2002. Waste pickers in Latin America stepped up their organizing into cooperatives throughout the 1990s. In the meantime the trade union movement and the ILO were beginning to recognize that the informal workforce was growing and could no longer be ignored. 

2000s: Organizing took off nationally, regionally and internationally. A key event was the adoption of a Resolution and Conclusions on Decent Work and the Informal Economy at the International Labour Conference (ILC) in 2002, which recognized informal workers – both wage earners and own account workers – as workers with the same rights to decent work as other workers. The various mobilizing activities that occurred in preparation for the ILC 2002 helped to build collective organization in different parts of the world.

The number of grassroots informal worker organizations increased rapidly in this period and national and international networking activities also increased. In Latin America, national movements of catadores or recicladores) were formed, and in 2004 the Latin American Waste Pickers Network was founded. Although HomeNet International collapsed in 2000, HomeNet South Asia was founded in 2000 following a successful regional dialogue with employers and governments leading to the Kathmandu Declaration. In 2006 domestic workers came together internationally; this led to an agreement to form their own international network, the International Domestic Workers Network (IDWN). The first World Conference of Waste Pickers took place in 2008, resulting in ongoing global networking. (See the conference report.)

2010s: The movement continues to grow. Informal workers are increasingly visible and recognized and are making concrete gains. In 2009, 2010, and 2011 waste pickers set out their demands at the United Nations Framework Convention on Climate Change (UNFCCC) conferences (see more about waste pickers and climate change). Also, in 2011 domestic workers won a major victory when the ILC adopted an ILO Convention on Decent Work for Domestic Workers (see The Campaign for a Domestic Workers’ Convention).  

For a more detailed timeline, see Informal Workers Organizing Internationally – Timeline of Key Events.

The Need for Organizing

The poorest segments of the working class – those working in the informal economy, and especially women – are the least able to make their voices heard by policymakers, governments, employers, international agencies and others with the power to affect their lives. These workers face a myriad of challenges, including low and precarious income, high costs, poor working conditions, lack of legal protection, numerous legal and physical risks, and often poor social standing. (See the different Occupational Groups for more on the working conditions.) Generally lacking powerful organizations and without strong support from trade unions, the ability of the working poor in the informal economy to effectively challenge their conditions is very limited.

Informal workers need to organize to build the confidence and power to take collective action, to gain recognition, and for effective voice and representation. They need to organize to change the hostile economic, policy and legal environment in which they work. They need to organize if they are to improve their lives and protect their livelihoods.

Essential to this is the development of democratic, representative membership-based organizations (MBOs) – trade unions, associations, cooperatives – as well as national and international alliances and networks.

The Benefits of Organizing

Joining forces in democratic, membership-based organizations (MBOs) can provide many benefits to those who work in the informal economy, and in particular to women workers. When asked if organizing improved the social and economic conditions of their lives, 81 per cent of organized waste pickers from the Brazilian network Cataunidos responded yes.1

“Organizing and the act of creating responsive organizations are critical elements in ... economic, social and personal empowerment. These enable [informal workers] to take action to advance and defend their interests, formulate policies that will benefit them and hold policy makers accountable over the long term.” (Chen et al. 2005: 7)

Economic Benefits

Organizing allows workers to use their collective strength to negotiate better wages and conditions.

  • Leaders of the bidi workers in India, along with SEWA, negotiated with contractors and merchants to obtain a daily wage increase benefiting 8,000 bidi workers (SEWA 2008). SEWA has also negotiated higher piece-rates and fairer working conditions for sub-contract garment workers. This has involved negotiations with the Labour Commissioner to demand minimum wages, identity cards, and social benefits for sub-contracted garment workers (Inclusive Cities n.d.).
  • The union of domestic workers in Uruguay – Sindicato Único de Trabajadoras Domésticas (SUTD) – negotiated collective agreements, for the first time in 2008 and again in 2010, setting minimum wages and providing for increases and overtime pay amongst other things.  Related information can be found in “From ‘Good Spirit’ to Employee? Strengthening Domestic Workers‘ Employment Rights in Latin America”2  (Meier 2010); and the section on Uruguay in “Domestic Workers Worldwide: Four Collective Bargaining Models.”3
  • SEWA Academy’s monograph Empowering Women in an Insecure World: Joining SEWA Makes a Difference contains results from a 2007-08 Gujarat Social Income and Insecurity Survey (GSIS) survey of 1,407 respondents. The survey found that SEWA members, on average, negotiated better rates, better working conditions and had more work than non-SEWA workers.

Organizing allows workers to receive better prices from those who buy their products.

  • Organized waste pickers can demand higher prices for the materials they salvage and sell. In Brazil, where waste pickers have formed many cooperatives, members of Coopamare – one of the most successful of these – earn twice the country’s official minimum wage (Medina 2005, cited in Chen et al. 2005).

Organizing helps workers pool their limited resources and increase their access to financial resources. 

  • As stated in the Progress of the World’s Women, Chapter 5: “Savings and credit groups may help the working poor access microfinance services. Producers with little capital may buy raw materials at wholesale prices by combining their purchases. Landless labourers may be able to buy land collectively, and farmers who are unable to enter markets individually may have greater access and bargaining power as a collective” (Chen et al. 2005: 76).

Political Benefits

Organizing confers greater visibility and validity on informal workers, which in turn gives them influence in policy arenas.

  • After two years of working to form a collective organization, Cairo's traditional waste collectors/recyclers have begun to be registered as companies and the Governor of Cairo introduced a decree with directives that support the waste collectors, including directing the Cairo Cleansing and Beautifucation Authority (CCBA) to contract the new companies (read more)
  • Organized homeworkers in the UK fought for and won the right to be included under national minimum wage legislation.
  • Organized street vendors have advocated with municipal officials to protect the right of vendors to earn their livelihoods trading in public areas. In India, the National Alliance of Street Vendors of India (NASVI) was influential in the development of the National Policy for Street Vendors (Chen et al. 2005).
  • In the state of Minas Gerais in Brazil, waste picker organizations were able to help shape legislation regarding a solid waste management policy that includes articles dealing with the social inclusion of waste pickers. It became law in 2009 (Dias 2010).
  • Waste pickers have achieved visibility and validity on the world stage through MBOs, networks and alliances. Since 2008, waste picker representatives have presented their demands at conferences relating to the United Nations Framework Convention on Climate Change (UNFCCC). The Clean Development Mechanism methodology affecting waste picker livelihoods came under revision in 2010-2011, and the WIEGO-GAIA partnership was involved in facilitating waste picker input into these processes.
  • In Durban, South Africa, street vendor organizations came together, supported by the group  Asiye eTafuleni,  StreetNet, unions and other civil society organizations, to fight the threat that the Warwick Junction market would be demolished to make way for a formal mall, displacing the street vendors. The mall proposal was subsequently dropped.

Social Protection Benefits

Organizing allows informal workers to access existing social protection systems.

  • In India, the Bidi and Cigar Welfare Fund Act, and the Bidi and Cigar Cess Act, implemented in the 1980s provide social security schemes such as health care, child care and housing for bidi workers; similar schemes have been implemented for other sectors in India.The 2007-08 GSIS survey found SEWA families were more likely to benefit from medical insurance and to take advantage of government schemes (SEWA Academy 2010).
  • South African domestic workers’ organizations fought for years to have domestic workers gain access to unemployment, death, health, and maternity benefits under the Unemployment Insurance Act. This was finally achieved in 2003 (Chen et al. 2005).
  • PATAMABA, an MBO in the Philippines, has helped home-based workers organize and access the Social Security System (SSS), which allows self-employed home-based workers to access social insurance via an Automatic Debit Account arrangement, whereby members can use the facilities of partner banks to make their social insurance contributions.

MBOs can offer improved support systems for their members.

  • Organized groups run schools, child care centres and health centres. For example, the Accra Market Women’s Association in Ghana developed a programme to care for children while their mothers conducted business, with funds from the Accra City Council (Chen et al. 2005).
  • Some MBOs can mobilize assistance during disaster or hardship. For example, after the devastating 2004 tsunami, the Siyath Foundation, a member of HomeNet South Asia that works with coir weavers in Sri Lanka, distributed much-needed items and provided legal and psycho-social support. They also worked with UNIFEM on the creation of a long-term rehabilitation programme focused on organizing members into a cooperative and mechanizing coir production (Chen et al. 2005).

MBOs are at the forefront of helping improve working conditions, including fostering occupational health and safety (OHS) approaches for informal workers.

  • Waste picker organization  KKPKP has been addressing OHS for the waste picking sector in Pune, India for many years. KKPKP has won concessions from the Pune municipality, which now pays health insurance premiums for KKPKP waste pickers and has agreed to provide these workers with basic protective gear. KKPKP is also studying health topics, such as the ways in which door-to-door waste collection methods can affect health and safety conditions for waste pickers.

Intangible Benefits

Organizing’s positive effects can lead to improved self-esteem and both social and personal empowerment among informal workers.

  • The growing organization and advocacy work of waste pickers has helped this once maligned group understand the importance of its contribution economically and environmentally (for more on this contribution, see the sector page on waste pickers).
  • For women, greater bargaining power and earning potential in the workplace (even when the workplace is at home) can translate into increased power within the household and community (Chen and Snodgrass 2001; Kabeer 1998, as cited in Chen et al. 2005).
  • In general SEWA members responding to the GSIS study were more confident than their non-SEWA counterparts, were more likely to value and improve skills, were less accepting of poverty and expected more from both life and society (SEWA Academy 2010).

The forces that affect the lives and livelihoods of those who work in the informal economy occur at the local, national, regional and international level. Therefore, it is important that workers organize at all levels. At the individual, local and national level, organizing can help workers share resources to achieve improved incomes, negotiate with employers or authorities to improve working conditions, as well as to influence policies, programmes and regulations that can directly impact them. Through regional organizations, workers are able to share information and learn from successes in other locations, while also influencing regional decision makers. International networks give workers a strong, collective voice on the global stage to foster changes in international instruments and policies and through this, national policy and legislation. An example of this is the recent campaign, led by the International Domestic Workers’ Network, to have a Convention on Decent Work for Domestic Workers adopted at ILC 2011.

The Challenges of Organizing Informal Workers4

There are many challenges in organizing the informal workforce. Although many of the challenges are specific to the sector or local context, many are similar across all sectors and regions of the world.

First, there are political and conceptual challenges. The ILC 2002 Resolution provided some definition for informal employment, and conferred status and validity on informal workers. However, the Resolution is not universally understood or accepted, and matters are complicated by the diversity and degrees of informal work and the sometimes unclear relationships between employers and employees. Labour laws, as well as some unionists, often consider only those workers in clear employment relationships, and discount self-employed and own account workers.

Informal workers also may not perceive themselves as workers. A lack of a worker identity is often true among women. For example, home-based workers may view their work as an extension of their domestic duties.

The organizations to which informal workers belong may not identify as part of the formal labour movement. This is true even of some organizations that act like trade unions, but which may not want to be associated with the political allegiances of the “formal” trade union movement in their country/sector, or members may be wary of trade unions.

A Lack of Legal Protection and Clear Negotiating Counterparts
Many informal workers do not have an employer – or at least an obvious one – with whom to negotiate. As well, they are outside the protective labour law framework and there are no clear markers against which to push for gains. Since collective bargaining is a staple of trade union activities, these factors create perceptual and practical challenges for traditional unions.

Where employers do exist, they may treat informal workers harshly or ignore any existing laws. Furthermore, existing regulations often exist to impede, rather than assist, informal workers. This is the case, for example, for street vendors in urban spaces who may face harassment by authorities. Harassment or harsh employers can serve as an impetus for collective action, or can create a climate of fear around organizing, especially where workers can be dismissed and lose their livelihood but have no recourse.

Vulnerable Workers
Many informal workers are poor and must work long hours – sometimes in multiple jobs – to survive, leaving them little time for organizing. Migrant workers may need to remain undetected because they are undocumented, making them particularly vulnerable to exploitation and harassment. As well, competition between workers – for example street vendors selling similar products, or taxi drivers in the same area – can reduce the inclination to work collectively. They may come together to take on a particular challenges or oppose face authorities in a crisis, but this unity of purpose may end when the issue is resolved. For collective action to be ongoing, the workers must see an ongoing common interest.

Diverse Workplaces
Workplaces may be very small, as with some garment workers, or may even be individual households, as is the case for domestic workers. Many informal workers are situated in scattered (e.g. home-based workers and domestic workers), mobile (e.g. street vendors and street waste pickers) or far flung (e.g. farm workers, forest gatherers) workplaces. A single worker may have multiple workplaces and multiple “employers.” These factors all create further complexities for recruiting members, for negotiating better conditions, and for organizational structures and strategies.

Governance and Leadership
In some sectors and in some countries, informal workers have traditionally organized in local associations. However, democratic structures – for example, compliance with formal rules, such as in a constitution, or processes for electing leaders – may not exist (Roever in Chen et al. 2007). Political or corrupt leadership may be an issue, and these leaders may resist joining with larger trade unions. It is also common for women to be excluded from leadership positions.

Resources
Many informal workers are poor – and this is particularly true for women – and therefore unable to afford dues, and their ability to pay these is further compromised in times of economic or personal crisis. Organizations of informal workers often lack sufficient resources to cover the cost of staff, space and meetings. Where unions serve both formal and informal workers, they too may have insufficient financial resources, and informal workers may be viewed as a drain on these.

Despite these challenges, and many others, informal workers are organizing and becoming increasingly visible locally, nationally and internationally. See Recent Initiatives to Promote Organizing.

 

1 Dias, Sonia.  2011.  “Wastepickers: A Livelihood Profile.” Unpublished paper written for WIEGO.

2 Paper written by Katharina Meier and published by the Friedrich Ebert Stiftung in May 2010.

3 This report was prepared by Alexandra Rizio, Alice Chu, Diana E. Marin, and Maria Marulanda for the National Domestic Workers Alliance as part of Professor Jennifer Gordon’s Spring 2011, Workers, the Law and the Changing Economy seminar at the Fordham University School of Law.

4 The section on Challenges is adapted from Bonner, Christine and Dave Spooner. 2008. “Organizing in the Informal Economy: A Challenge for Trade Unions,” International Politics and Society, IPG 2/11.