Challenges and opportunities for social protection of informal workers

Asian Development Bank
Gisèle Yasmeen

Vendors display their merchandise in a street market in Indonesia.

The social protection of informal workers is a daunting—but not insurmountable—challenge in the Global South, and increasingly in the North.

The statistics on informal work are staggering. In South Asia, for example, informal work accounts for approximately 82% of the non-agricultural workforce, while in East and Southeast Asia (excluding the People’s Republic of China) it accounts for approximately 65%, according to an October 2015 study co-authored by Women in Informal Employment: Globalizing and Organizing (WIEGO).

Informal work is therefore normal in many countries in the Global South. Most informal workers are self-employed, yet work-related social protection for formal workers is premised on the idea of contributions from both employers and workers. We therefore have to think outside of the conventional realm of social protection when thinking about extending protections to informal, self-employed and sometimes sub-contracted workers as the workplaces and relationships are at odds with typical employer-employee relationships.

WIEGO is an international research, policy and action network that has been grappling with these issues in partnership with with organizations of informal workers for nearly 20 years. One of our central preoccupations is to examine under what conditions informal workers in different sectors, places of work and employment situation—whether they are self-employed, employed or suppliers as part of global value chains—can get access to different types of protection, particularly basic social security. Social protection is an integral part of formalization. According to the International Conference of Labour Statisticians, informal workers do not have access to social and labour protections.

One thing to consider is that informal work is not homogeneous, and barriers to access to social protection vary depending on the context in which they work. Waste pickers and street vendors, for example, are highly affected by municipal policies, unlike domestic workers who provide services in other people’s homes. Home-based workers who manufacture goods from their own homes have a specific supplier relationship with the corporations for which they produce goods, which begs the question of the responsibility of these enterprises for the social protection of these workers. This needs to be accounted for in the design and provision of social protection. It also has an impact on where roles and responsibilities lie, whether that of the state at various levels, including municipalities, the private sector (especially multinational corporations benefiting from homebased work), worker associations and trade unions, and the individual workers themselves. Having said that, social protection cannot be a panacea for correcting systemic inequalities in the global economy. This is a larger issue that goes well beyond the scope of social protection.

WIEGO has identified three priorities for extending social protection to informal workers, namely:

• Access to health care, including occupational health and safety and maternity leave
• Support for caring roles, especially recognizing the childcare needs of informal workers as well as supporting caregivers themselves, most of whom work informally
• Income support for elderly informal workers by promoting the access of informal workers to universal pensions and by exploring other forms of support

While informal workers face significant challenges accessing basic social protection, there have also been significant steps forward to build on over the past twenty years.

For example, a number of ILO recommendations and conventions have specifically mentioned the rights and needs of informal workers. Examples include Convention 177 on Home Work adopted in 1996, Convention 189 on Domestic Work in 2011 followed by the more binding Recommendation 201 on the same topic the same year. More recently, Recommendations 202 and 204 on the social protection floor and formalizing the informal economy—adopted in 2012 and 2015, respectively—are important instruments that have also informed the development of the new Sustainable Development Goals (SDGs).

Finally, there are a number of practical steps forward that serve as examples of how informal workers have advocated for inclusion in social protection schemes, and in what ways informal workers can benefit. Thailand’s universal health coverage system includes informal workers, and head-load porters (kayayei) have gained access to Ghana’s universal health scheme. Waste pickers in Pune, India have formed unions and cooperatives that have helped them gain a voice to negotiate with local authorities, who now contribute to their health insurance coverage. Several jurisdictions, including in some low-income countries, have started to introduce universal pensions that include informal workers.

The 2010 Social Protection in Asia program synthesis report argues that “it is possible to design social protection instruments that go beyond addressing fluctuations in income, and have longer-term impacts on livelihoods and security.” Given the demographic significance of informal work, particularly in the Global South, these examples need to be kept in mind when designing social protection schemes that will meet the ambitious expectations that the SDGs will lift millions out of vulnerability and poverty.