Cities are undermining the potential of universal cash grants to support women’s economic empowerment and reduce poverty

Ninety-two per cent of women’s employment in the developing world is in the informal economy, and as urbanization proceeds an increasing number of these workers are to be found in cities. As they work to support themselves and their families, they lack protection and sufficient incomes to leave poverty behind.

Governments have been working to improve the situation for women and families as they race to meet targets set by the Sustainable Development Goals (SDGs). One solution being lauded is the provision of direct cash transfers from governments to citizens — a promising way forward. But as we argue, one that is being undermined by the daily, debilitating challenges of living and working without basic urban infrastructure and public services.

National governments, which administer cash programmes, and municipal governments, which establish urban regulatory regimes, as well as services and infrastructure, need to come together to collaboratively develop policies and programmes that work together.

It’s time for a more coordinated effort. National governments, which administer cash programmes, and municipal governments, which establish urban regulatory regimes, as well as services and infrastructure, need to come together to collaboratively develop policies and programmes that work together to provide income security for working poor women.

We provide examples of some promising initiatives — led by informal workers themselves — to promote better coordination in the interests of securing women’s incomes and livelihoods.

The Potential of Universal Cash Grants in Securing the Incomes of Informal Workers

By definition, informal workers have no or limited access to protections, such as maternity benefits or old-age pensions. When they are unable to work because of old age or childbirth, they do not earn. Many are self-employed workers, with low and irregular earnings, making it difficult for them to contribute to the types of insurance schemes to which formal workers belong.

Cash grants do not require direct contributions, and when they are universal — available to all citizens — are most likely to reach informal workers. Therefore, they are considered to have potential to provide such workers with a basic level of income stability when work is interrupted or stops, preventing a descent into poverty.

The unsupportive actions of local governments and infrastructural deficits actually reduce women’s ability to be productive and secure a livelihood.

Currently, there are some good examples of cash schemes that have had real benefits for informally working women. Bolivia launched a universal pension scheme that has had a positive impact on decreasing poverty rates among older women whose incomes are often interrupted by care responsibilities during their working lives.

In Mongolia, under the Social Welfare Scheme, women receive maternity cash benefits of approximately US$20 a month for 12 months from the fifth month of pregnancy. This is not a universal scheme, which means that not all informal workers may access it, but it has been shown to provide a degree of income stability for women and support some of the costs of care and nutrition for a young infant.

When the aims of cash grants are undermined by punitive urban regulations and infrastructure deficits

Although universal cash grants, even low-value ones, can make a significant impact on securing the incomes of working poor women, the cities where they live and work — from Bangkok to Bogota — are undermining their real potential.

Urban regulations which threaten income security as well as a lack of public services — water and sanitation, transport, health care and child care — in poor urban areas make life challenging. At the same time, the unsupportive actions of local governments and infrastructural deficits actually reduce women’s ability to be productive and secure a livelihood.

No matter how plump their pockets may be, constant illness from unsafe water, punitive urban regulations governing informal work in urban public spaces, and a lack of available child care centres erode the potential of other progressive policies.

Market and street traders in Ghana, South Africa, Kenya and Malawi, for example, are advocating both for guaranteed trading spaces during maternity leave and for municipal authorities to ensure that space for child care centres are incorporated into the urban plans.

For example, in South Africa, there is currently discussion about the need to provide informal self-employed workers with access to maternity benefits. But for street traders this may not be enough to secure their existing incomes.

On the streets and in the markets of Durban, women traders know that the municipality’s policy is to immediately reallocate trading spaces once they leave the market. This has meant that women lose their trading spaces, requiring them to take up less productive spaces or go without an income as they struggle to locate an alternative space on their return to work. While a maternity benefit would help for some months, it would not make up for the loss of business incurred as a result of this action by the municipality.

In Delhi, Indian domestic workers lost their jobs when they were evicted by the local government and relocated to a settlement which was far away from the city centre and had poor public transport so that they could not travel to work. An unemployment benefit may have provided some relief to these workers, but would not likely be sufficient enough to replace these lost jobs.

But it's not only informal workers themselves who suffer; their families do, as well.

In Thailand, low-income families — many of them informal workers — now receive a child grant to support the raising of their young children. Yet at the same time, the Bangkok Metropolitan Authority is reducing family incomes through its evictions of street traders across the city.

Working Across the State: An Holistic Approach to Securing Incomes

Women informal workers are taking the initiative to respond to these policy contradictions by negotiating between municipalities and the national government for greater alignment and towards promoting synergies between parts of the state that very rarely come into contact with one another.

Without this holistic approach, the incomes of informal workers will continue to be insecure.

Market and street traders in Ghana, South Africa, Kenya and Malawi, for example, are advocating both for guaranteed trading spaces during maternity leave and for municipal authorities to ensure that space for child care centres are incorporated into the urban plans for markets. These centres would allow women to keep young children close to them and continue to work after the period of maternity. Taken together with a cash maternity benefit and support for child care worker salaries from national government, this would provide more comprehensive income protection than a cash grant alone.

In a similar manner, in Ahmedabad, India, members of the Self Employed Women’s Association (SEWA), the largest union of informal working women in the world, have developed “one-stop shops” — known as Shakti Kendras — that allow workers to link up to different parts of the state to access and advocate for a more comprehensive set of protections, including cash (or in-kind) transfers, as well as improved social and municipal services and infrastructure. They argue that without this holistic approach, the incomes of informal workers will continue to be insecure.

Looking ahead

Some might argue that a basic income grant — rather than specific benefits — would be the way to go. This would ensure a base level of income security no matter the eventuality.

But even then, informal workers would still be much more secure — and add more to their own economic empowerment and the wider economy — if they worked under more supportive urban regulations with access to decent urban infrastructure and services.

While universal cash grants are an important policy intervention to support the incomes of women informal workers, unless their urban realities are taken into account, the grants’ impact will be limited.

Informal workers are already connecting the dots between municipalities and national ministries. It’s time for governments to do the same.

Feature photo: Jonathan Torgovnik/Getty Images Reportage