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Informality Matters
Dear Reader,
It has been 40 years since the International Labour Organization first used the term “informal sector” to identify the now billions of unprotected workers engaged in legal but unregistered enterprises outside formal economic structures. Since then, the world’s economies, large and small, have undergone extreme booms and busts; and the most vulnerable have been those with the largest rates of informality. Today we face the challenge and opportunity to promote inclusive growth across interconnected and interdependent economies.
Informal workers WORK – often incredibly long hours under harsh conditions and for little pay. A large informal sector can improve a country’s overall economy by boosting innovation, production, and income levels—but only for the short term. Leaving these workers on the periphery means that as much as two- thirds of the world’s working population remains undeveloped and that we lose a potentially thriving addition to the mainstream economy. A sustainable global economy requires the integration of all workers.
With four decades of successes and failures in integrating informal workers into mainstream markets, we have the knowledge to imple- ment real and lasting change. Bringing together all stakeholders—workers, business, and governments—will move us beyond short-term, immediate (and, ultimately, ineffective) fixes to a concerted approach for inclusive economic growth.
We would like to thank the many people and organizations who continue to promote the rights and interests of the poorest workers around the world. Together we can ensure that everyone can realize the promise of a global economy.
Karen Tramontano & Caleb Shreve
Founder and President & Executive Director
Read the Summary Brochure "Informality Matters"
Read the Full Report "Informality in Emerging Markets: A Cross-Country Examination"
A Call to Action
The Global Fairness Initiative announces the publication of Informality in Emerging Markets: A Cross-Country Examination. Launched on November 8th, 2012 by President Karen Tramontano at the Pell Center for International Relations and Public Policy - the report highlights the need for policy makers, multilateral organizations, and grant makers to understand and address informality. If we hope to create truly sustainable and inclusive markets and end the cycle of poverty, we must address informality.
Informality Rates Among Sample Countries
Exclusion of Agricultural Workers from Informality Statistics
Because informal workers operate without registration, determining their exact number is difficult. In the case of agriculture workers-often temporary, migrant, or working in remote areas-quantifying informal participation is even more of a challenge. Current estimates put informal agricultural employment at more than 65% of total wage employment, with rates as high as 80% in regions that rely heavily on agriculture.
Addressing Informality is About More than Better Jobs
It's about including a marginalized group into social and economic structures that allow for productive and rewarding participation in increasingly interconnected markets, ultimately enabling stable sustainable economies with decent lives and livelihoods for all.
Strategies for Formalization Include:
- Sound employment statistics gathered independently by each government
- Direct surveying of workers to understand needs and perceptions
- Development of country-specific and sector-specific policies that can progressively transition workers and enterprises to the formal sector
- Affordable and accessible tax regimes that progressively create tax revenue
- Collaboration of government and the private sector to increase compliance
- Investment in missing middle financing to increase size of local enterprises, increase productivity, and decrease informality.
- Promotion of youth-flexible trade and entry-level placements for the integration of new workers to the formal labor market
- Aid to specific countries tied to improved legislation for the integration of the informal sector
Read the Summary Brochure "Informality Matters"
At GFI we believe that women represent the greatest potential for putting an end to the cycle of poverty that undermines development around the globe. GFI programs work with women agricultural and textile producers to remove the economic, technical and public policy barriers that prevent women from bringing their good to sustainable markets at a fair price.
Women account for 70% of the world's population living in poverty
Agricultural and textile production, carried out primarily by women, is the foundation of most developing country economies. In many developing economies as much as 80% of women are employed full or part time as small-scale producers in the agricultural sector and account for the majority of food security production for both their families and the communities where they live. Despite carrying such a heavy burden of the productive work, women are often marginalized to the informal sector of developing and even established economies where they find themselves ineligible for social services and social protections afforded the formal sector. The result is a deep cycle of poverty and social inequality experienced by women producers that keeps them isolated from mainstream capital markets and government social programs.
How GFI is Making a Difference
At GFI we see a deep and sustained investment in women producers as one of the single most effective strategies to break the cycle of poverty in the developing world. Empowering women farmers and textile workers requires a multi-faceted, multi-stakeholder engagement process aimed at creating opportunities for improved input, access to credit, removal of institutional and supply-chain barriers, access to high-value markets and policy reform targeted at enabling women to sustain real economic growth and improve livelihoods.
GFI's core set of program tools follows a process that targets barriers and creates opportunity through the following steps:
- Building Local Capacity
- Providing Technical Assistance
- Market Analysis
- Policy Evaluation
Learn More
GFI Programs Aimed at Women:
GFI has implemented numerous programs aimed improving the livelihoods of women around the world. GFI's Building Inclusive Shea Economies won a SEED Award in 2010, recognizing the program as one of the most "innovative small-scale and locally driven entrepreneurships around the globe which integrate social and environmental benefits into their business model."
GFI's South-South Collaboration brought together women entrepreneurs from India's SEWA cooperative and Ghana's Pagsung cooperative to share best practices and swap experiences managing women-owned and operated enterprises.
More GFI Programs Aimed at Women:
Women Farmers with Global Potential
Salt Workers Economic Empowerment Program
The Women's Trade and Finance Council
GFI is honored to have the support and leadership of BBDC as we train, mentor, and empower young leaders in Washington, DC. The partnership with BBDC will ensure that Dr. Shirley Sapin's mission to promote social activism and civil rights will continue by inspiring future generations to participate in issues and programs at the heart of achieving economic access for the working poor. The special fund will grant local Washington D.C. university students the opportunity to be apart of the Sapin Fellowship.
