The Pandemic Has Hit Informal Workers Hard. Here's How Ford's Supporting Them

On a high-traffic street corner, an older woman sells tamales out of a cart, feeding dozens of people who wait at the bus stop as they head to school or work. Miles away, another woman cleans a two-story house, rushing to finish so that she can get to the second house she cleans that day. In a junkyard on the other side of the globe, a waste picker goes through mountains of discarded items, searching for anything that can be recycled.

These are just a few examples of the world’s informal workers. According to a report from the International Labor Office (ILO), informal workers make up more than 60% of the world’s workers. That’s a full 2.1 billion workers worldwide. In the U.S. alone, almost 1 in 5 workers are informally employed. In developing nations, 90% of workers are informal workers.

The pandemic hit this massive section of the world’s workforce especially hard. In addition to earning far less than they did pre-COVID, informal workers have largely been excluded from COVID relief efforts, including emergency cash relief and in-kind aid. In 2020, the ILO estimated that 1.6 billion of the world’s 2.1 billion informal workers would be among the most impacted by pandemic-related lockdowns. A recent survey from Women in Informal Employment: Globalizing and Organizing (WIEGO) found these estimates to be accurate.

In response to this crisis, the Ford Foundation has awarded a five-year, $25 million grant to support networks fighting for the rights of informal workers around the globe. The grant, which has already been paid in full, was awarded to WIEGO, a membership-based global research, policy and advocacy network that works to empower people—women in particular—who work in the informal economy.

“These funds will help build a strong, sustainable global movement calling on governments at all levels to invest in protections for the world’s 2.1 billion informal economy workers as a central component of economic recovery plans,” said Sarita Gupta, director of the Ford Foundation’s Future of Work(ers) program. Gupta has since been tapped as Ford’s next vice president for U.S. programs.

She added, “The grant recognized that there can be no global recovery without informal workers, given [that] the inequalities that billions experienced threatened the pace and sustainability of economic growth.”

WIEGO will distribute the funds to organizations including the International Domestic Workers Federation, StreetNet International and HomeNet. The network will determine how to distribute the grant itself.

The grant was financed by Ford’s Social Bond, issued in response to the pandemic, and intended to let Ford allocate $1 billion over two years to support organizations that address inequality and to fund under-resourced areas, both domestic and international.

COVID’s devastating toll

As part of its ongoing research into how the pandemic has impacted the world’s informal workers, WIEGO surveyed workers from 11 cities in nine countries to determine their economic conditions. According to the survey, by mid-2021, the average worker was earning only 64% of their pre-COVID earnings. Approximately 40% of domestic workers, street vendors and waste pickers were still making less than 75% of their pre-COVID earnings. Home-based workers were the hardest hit, earning a mere 2% of their pre-pandemic income by mid-2021.

Since informal workers lack labor and social protections, they’re more susceptible to falling below the poverty line whenever any shocks or crises like the pandemic occur, Gupta said.

By mid-2021, the number of informal workers living in poverty rose from 26% to 59%. This is in spite of the fact that informal workers played critical roles during the pandemic, including, as Gupta noted, caring for families, and supplying and producing affordable food.

“These workers have long been living at the margins, and COVID drove informal workers to the systemic edge because they aren’t registered by the government,” Gupta said. In the U.S., for example, since many informal workers don’t pay payroll taxes, they did not receive the cash relief payments distributed by the IRS. Additionally, the percentage of informal workers who received food support declined during the first months of the pandemic.

A history of exclusion

Despite making up a significant percentage of the world’s workforce, informal workers continue to be stigmatized, viewed by many as illegal, underground or black market workers. This, according WIEGO, is an unfair generalization since most informal workers are simply trying to earn a living, with many of them working in public spaces and providing significant contributions to their communities.

The informal economy is not, as it has sometimes been labeled, a “shadow economy.” Rather, it encompasses work that is not regulated or protected by the state. As such, informal workers do not have the same labor and social protections that other workers rely on—like minimum wages, safe working conditions and paid sick leave.

“Systems fail to recognize and value the work that [informal workers] do… even when it’s productive,” said Sally Roever, international coordinator of WIEGO.

Roever noted an example of a woman milking a cow in an Indian village. The milk from the cow will be eventually sold in a market, and it will be counted as production. The labor the woman put into milking the cow will not be counted. “So the system doesn’t adequately recognize this as work and value it enough to measure it,” Roever said.

Other examples include women stitching garments in their homes, selling vegetables on the street or cleaning someone’s house. This type of work is often unrecognized by statistical, legal and policymaking systems.

Historical exclusion also plays a role in denying informal workers equal opportunities and protections. As we’ve written before, the exclusion of domestic and agricultural workers from the New Deal in the 1930s, most of whom were Black, is part of the legacy of slavery in the U.S.

“Southern Dixiecrats wanted to maintain an economy built on the exploitation of Black workers,” Gupta said. “These workers were excluded from the Fair Labor Standard Act, Social Security, unemployment insurance and the right to organize in the National Labor Relations Act.”

The continued undervaluation of informal workers and the lack of policies that take them into account is a continuation of this legacy, Gupta said.

Making a difference

One of the big issues facing informal workers and their advocates is how to effect change on a global level. How can WIEGO, for example, influence individual laws and policies around the globe?

“We can’t change all of them,” Roever said. Instead, WIEGO looks to global systems to spur change. “The way we look at WIEGO’s role is to look at systemic change at the global level… It’s the global systems that really shape ideas. It’s in Geneva and in Washington and in New York and in London where more global policy debates happen.”

In 2019, for example, WIEGO supported a delegation of women in informal employment to attend that year’s International Labor Office conference in Geneva, which focused on eliminating violence and harassment in the workplace.

Last year, WIEGO sent another delegation to the conference—held virtually due to the pandemic—which focused on how to reduce inequality among the most marginalized workers. WIEGO outlined three key needs: direct representation of informal economy worker organizations, universal social protections, and collective and solidarity financing of social protection systems.

“Once the global norms are reshaped to be more adequate to the employment structure that actually exists out in the world, then our members, the worker organizations… that we work with, they can all use that international norm to advocate for better policies at the national and local level,” Roever said.

Roever said that in order to be effective, the organizations in the network need strong systems, effective leadership, excellent communications and long-term strategies. It’s difficult to accomplish this when they are strapped for funding, especially during the pandemic.

“It’s just a real game changer in the sense of providing the space and support and scope for overcoming some of those big hurdles that do take a lot of resources, time and patience to get into place,” Roever said.

One of the network’s biggest strengths lies in its diversity. Since the organizations operate at the local, regional, national and global levels, they can learn from each other and apply successful tactics in other areas.

Ford has adopted a strong gender equity lens with the grant. According to the ILO report, although more men are informally employed across the globe, in low and lower-middle income countries, more women than men are in informal employment. In developing countries, for example, a whopping 92% of women who work are informal workers, Gupta said.

“Our hope is that this grant helps… continue to build the momentum to establish labor protections across all sectors,” Gupta said. “It’s time we launch a new international progressive era centered around informal workers. That’s what this grant will help support.”

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