Every formalization process benefits those who have money. The ones who are left behind are the ones who cannot pay.
- Gloria Solórzano, Vendor leader in Peru
Peru has one of the highest incidences of informal employment in Latin America – 75 per cent of the workforce is informal (National Household Survey data, Dec 2011).
The “Strengthening the Voice of the Working Poor in Social Policy Decisions in Latin America” project was implemented in 2010 in Peru and Mexico under the leadership of Carmen Roca, WIEGO Latin America Regional Advisor. The project aimed to make social policy more responsive to the needs of the working poor, in part by fostering dialogue between policymakers, government officials and informal workers.
First, worker organizations were identified and research conducted, including work with National Household Survey data to have a more detailed picture of the informal workforce. The data made clear that the majority of workers in the informal economy are living in poverty or extreme poverty and have less education. The majority among the self-employed are women. Young people enter the workforce as salaried workers in informal employment, while old-age workers finish their work life as self-employed.
The project has raised awareness about the vulnerability of this large part of the population. The studies were widely publicized and disseminated to decision makers, including authorities at Parliament, the Ministry of Labour, the Ministry of Development and Social Inclusion, and the media.
A capacity building program for informal worker organizations assessed training needs and provided them with a range of specific courses, including on computer use, sustainability of organizations and fundraising, and talking to politicians and policymakers. Techniques for improved networking within national organizations and with organizations of other types of informal workers were emphasized. Through their newfound ability to network across organizations, the informal workers came to see how much they had in common across occupational sectors. This created opportunities for collaborative advocacy, with results that exceeded expectations.
In 2010, informal workers had an important opportunity to raise their voices in two election campaigns when WIEGO sponsored debates with the candidates for President, and for Mayor of Lima. Here, informal workers were able to ask questions, articulate their needs and present a common set of priority demands.
A new national government, elected in 2011, immediately created a Ministry for Development and Social Inclusion (MIDIS) to aid in fulfilling its electoral promises: an improved childcare program, a non-contributory pension for those over 65, and expanded health access. These were the demands that informal worker discussed with the then-candidates to President at the events organized by WIEGO.
In 2012, a multi-sector group of government officials, led by MIDIS, met with informal workers’ leaders to discuss the workers’ situations and needs. The Board on Informal Employment, a group of NGOs and academics close to WIEGO projects, also participated at the meeting, which WIEGO chaired. Opportunities for piloting daycare and old-age support programs in prioritized districts of Lima were identified and soon undertaken.
The Campaign for the City Ordinance
In May 2014, Lima’s City Council passed a new ordinance that governs how individuals are authorized to sell in public spaces. The ordinance covers Lima’s Cercado district, the downtown area – a main commercial centre – and will have a major influence on the other 42 districts of Metropolitan Lima, a city of almost 10 million inhabitants.
WIEGO directly supported the consultation process that gathered more than 150 street vendors’ federations. At the consultation workshops, the draft ordinance was shared and comments and suggestions were taken to improve the text and its content. Other workshops took place with street vendor leaders and with municipal authorities of the different districts of Lima. City Council listened and subsequently improved the ordinance based on these consultations.
The ordinance, which replaces one that is nearly three decades old, recognizes the vendors as legitimate workers. A pro-poor orientation in the ordinance prioritizes licenses to vendors who live in extreme poverty and those who have particular difficulties, including women heads-of-households, seniors, pregnant women, and people with disabilities. It will now allow the presence of “assistants” for those who need them.
Underlying the licensing regime is a fundamental commitment to encouraging vendors to save money and move toward formalization of their businesses over time, helping them leave the streets for more secure incomes. Individual and collective savings are promoted through specific programmes, with the aim of having street vendors “graduate” from the street to more secure, profitable, and promising urban/commercial projects. This in turn will free up licenses for others who need the opportunity to earn.
The new norm simplifies and shortens the process by which a street vendor can receive authorization to vend, and extends the period of a vending license from one year to two, so vendors can plan for more continuous income. Also, authorization now will be given earlier in the year for the next year, so vendors can plan their near future. And the appeal process is more immediate, reducing vendors’ uncertainty.
The requisite for vendors to have health insurance in order to obtain a license encourages them to use state programmes now available that offer health coverage for the poor. As well, the city commits to promoting special agreements with the health insurance system for the poor.
While the ordinance mandates city government to work for inclusion of street vendors and for their economic development, the city administration benefits as well – the new, streamlined system will demand less time of the municipal bureau.
The new ordinance does not solve all the problems. The number of authorizations granted still only reach about half of those who make their living from vending. The unauthorized street vendors will continue to risk punishment, which includes confiscation of their merchandise. However, Carmen Vildoso, a WIEGO Board member who became Manager of Economic Development at the city in 2013, was instrumental in moving the ordinance through council. She says if municipal workers are less occupied in time-consuming procedures, there will be a greater possibility for working out policies with more intelligence, creativity and dialogue.
Significantly, the ordinance makes mention of dialogue and establishes a new commission that will bring together the municipality, street vendors’ organizations and neighbourhood representatives. While the actual working design of this commission is yet to be determined, the expectation of sitting at a common table to resolve issues is promising.
Law and Informal Workers in Peru
The success of the street vendors in achieving this more favourable ordinance is one example of how important law is to the lives and livelihoods of informal workers.
WIEGO’s “Law and Informality” project has been active in Peru. This work has been done in partnership with Instituto Sindical de Cooperación al Desarrollo (ISCOD), a Spanish trade union cooperation agency that works with informal workers. After consultation with domestic workers, market porters, street vendors, and waste pickers, the project team focused on capacity building for worker leaders from different organizations. Training modules for workers were developed and courses on organizational skills and on the laws affecting particular groups ran weekly so workers understood their legal rights. Creative material was produced and disseminated, along with a background paper on Law and the Informal Economy in Peru. A compilation of laws for each sector was made available in Spanish on a dedicated website.
The groups subsequently developed proposals for new laws or for enforcement of existing laws.
Street vendors are not the only sector to see progress as a result of the focus on law and informality. Domestic workers are more effectively pushing for ratification of the international Convention for Decent Work for Domestic Workers (C189). Waste pickers have begun pursuing projects such as a recent proposal to build a recycling plant. Market porters are working for enforcement of the two laws that regulate their work. All sectors are better able to advocate for enforcement of existing laws.
Expanding the Work
WIEGO’s work in Peru is not limited to Lima. Through our “Securing Economic Rights for Informal Women Workers” project, the work in Lima is being replicated in three other jurisdictions. This project allows us to work at a much more local level while building on previous work.
WIEGO is also working to launch a public campaign in 2014 to improve the image of informal workers. Despite their prevalence in the working population, informal workers in Peru are afforded little respect. After a government move to relocate the wholesale market in La Victoria erupted in highly-publicized violence in 2012 (see Worker’s Story), public perceptions about informal workers worsened. The campaign on Women's Voice & Leadership will use media partnerships, social media and advertising messages to raise awareness of the prevalence and importance of informal workers to the economy and the social fabric in Peru.