Pandemic: Informal workers urgently need income replacement — and more protections

“Flattening the curve” has become a mantra of the COVID-19 pandemic — but calls for staying home and social distancing have starkly emphasized the inequalities in our society, including amongst workers. 

Social distancing and staying home are real possibilities for middle-class office workers covered by social security. They are much less achievable for unprotected informal workers who fall between the cracks, excluded from formal work-related protections as well as from state social assistance programmes that target the very poor and those outside the labour market. 

“I am afraid of the coronavirus,” said an informal worker in Mexico, “but I am more afraid of dying of hunger if there is no work.” 

This stark reality is likely to be particularly pronounced for women informal workers, who will have to cope with a greater care burden while attempting to put food on the table. 

Cash grants among measures needed immediately

In this situation, social protection measures — such as cash grants to replace incomes — are critical. These would give informal workers greater financial freedom, affording them the ability to social distance as much as possible. As public health restrictions on movements in public space and on contact with others become more stringent, such measures will become essential to keeping the world’s large informal workforce out of poverty. 

Informal worker organizations in many countries are now calling for such income replacement measures to be implemented as part of a wider package that can support vulnerable workers. 

But it’s not just informal workers who will benefit — by allowing vulnerable workers to social distance, the epidemic curve will have a greater chance of being flattened, benefiting everyone by slowing the spread of the virus and allowing health systems to better cope. 

Informal worker organizations in many countries are now calling for such income replacement measures to be implemented as part of a wider package that can support vulnerable workers. 

• In South Africa, a coalition of 10 organizations in the informal economy has called for the implementation of a “Living Cash Grant” to be extended to informal workers. 
• HomeNet Eastern Europe has called for a basic minimum wage to be extended to home-based workers in the region. 
• The Street Vendor Project in New York City has called for implementation of an emergency universal basic income. 
• In India, the Right to Food Campaign has released a call for the government to urgently distribute food, soap and cash to poor and informal workers. 
• The International Domestic Workers Federation has called for the enforcement of paid sick leave and adequate compensation in the event of dismissal.
• The Alliance of Indian Waste Picker's has demanded "all waste-pickers and informal waste collectors be given emergency basic income of INR 10,000 per month per household."

Some governments are already starting to respond. The Canadian government has announced an $82 billion (about US$57.4 billion) emergency fund for COVID-19, which includes financial support for both the employed and self-employed, including additional child and family benefits for those families struggling to balance care and income needs. In Peru the government has extended a cash allowance of 380 soles (about US$110) to poor and very poor families during the 15-day period of national emergency. However, waste pickers who work with municipalities are being included within these measures as a vulnerable occupational group. In India, the Kerala State Government has announced a package of measures that include cash, health support and food. 

What should governments consider when implementing such support measures?

Firstly, while the focus on the poor and very poor is important, it must be recognized that many informal workers earn just enough to not fall into these categories. Yet without support they are very likely to fall into poverty due to the economic fallout of COVID-19. 

To prevent this, governments must extend social protection measures beyond the poor, ideally by universalizing benefits, or at the very least targeting groups of workers who are known to be vulnerable. Financing for this is possible, even in emerging economies. In South Africa, for example, it has been suggested that the approximately $11 billion surplus in the Unemployment Insurance Fund could be utilized to support vulnerable workers.

To prevent this, governments must extend social protection measures beyond the poor, ideally by universalizing benefits, or at the very least targeting groups of workers who are known to be vulnerable.

Secondly, this time of emergency should not be used as a justification for a reduction in employer-supported social security. In the USA, for example, the Trump administration has proposed a payroll tax cut, which will put more money into the pockets of workers immediately, but which may also bankrupt the Social Security and Medicare programmes. In the long-term this would be disastrous for formal and informal workers as protections are further eroded, making countries even less able to cope when future crises hit.

Thirdly, social protection measures must be seen as part of a package of measures. These include health and hygiene support, measures to relieve the working poor from loan repayments, rent and utilities payments, and support for care work. Care-related support will be particularly important for supporting women workers who will have more demanding care responsibilities at home due to school closures and sick family members. 

No time to waste for new measures

Flattening the curve can happen, but only with full cooperation from every citizen across affected countries. That cooperation can happen even in the most challenging places, as India proved yesterday when the country of 1.3 billion people was asked to come to an unprecedented halt. But halting requires millions of workers in India and across the Global North and South to give up their livelihoods. Governments need to safeguard its most vulnerable citizens by providing income security and paid sick leave, as well as essentials, such as food and soap for handwashing. And they need to do this now — if not, workers desperate to feed their families will return to their livelihoods in the streets and that puts everyone at risk. 

Header Photo: María Elena Díaz Espinoza, a waste picker in Lima,Peru, collects recyclables on the streets in the neighbourhood of Los Olivos. Credit: Juan Arredondo/Getty Images Reportage 

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