Women and the Informal Economy

Introduction

Informal work describes those who work in industries with little or no legal or social protection, a lack of government regulation, and a lack of labour laws that protect workers’ rights. Despite the lack of protection and regulation, informal workers, such as street vendors, garment makers, and domestic workers, provide significant contributions to the global economy and account for more than 60 percent of the global workforce (Barry, 2021). Globally, it is estimated that 2 billion people are employed in the informal economy (ILO, 2018). It plays an important role in job and income generation, especially in areas with high unemployment and poverty. Often, workers turn to the informal economy for survival when there are no other options of employment or livelihood. Indeed, informality exists in all countries regardless of the country’s level of socio-economic development, though it is more prevalent in less developed countries.

While the informal economy does indeed provide economic opportunities, it is important to recall that most informal workers are exposed to unsafe working conditions, have lower and irregular incomes, and lack collective bargaining and representation rights. The case is even more precarious for women working in the informal economy, as this article will demonstrate. In fact, the International Labour Organization (ILO) Recommendation 204 recognises that the human face of informality is female (ILO, 2015). It goes on to state that women are indeed more exposed to informal employment in over 90 percent of sub-Saharan African countries, 89 percent of countries from Southern Asia, and almost 75 percent of Latin American countries (ILO, 2018). As Roever and Skinner (2018) argue, while men and women in the informal economy face the same risks of unstable pay, lack of access to health insurance, and the possibility of job insecurity, women are more susceptible to these issues due to a variety of cultural and social factors. The large percentages of women in informal work are not without their significance in reflecting social and cultural norms that not only restrict women but also keep them in poor economic situations. Ideas of women as unpaid caretakers hinders their economic freedoms, with wider implications for gender equality and development.

Women in the Informal Economy

As reported by the ILO, women are more likely to work in the informal economy compared to men (ILO, 2012). A myriad of socio-economic factors motivate women to enter the informal economy and range from care responsibilities, a lack of mobility and safe and affordable transportation, as well as a lack of formal employment opportunities (Barry, 2021). Moreover, as women bear most of the burden of reproductive and care-related responsibilities, they tend to end up in the informal economy as it offers them flexibility and proximity, thereby allowing them to fulfil their domestic duties while taking on additional paid work. The flexibility of informal work allows women to attend to their households’ needs as well as gain some financial independence and stability. However, this flexibility results in a loss of negotiation power, meaning that the women often have to accept low wages, no worker’s rights, or a lack of safety. As such, the informal economy benefits from women and their labour, but women gain little beyond flexible work and meagre earnings. Following this logic, it is beneficial and less costly for a country to leave the informal sector unregulated so as to tap into this vulnerable and easily-exploitable workforce.

Countries that place less value on women’s education or where cultural and social norms relegate women as solely responsible for the home and family see more women in the informal sector. Seemingly harmless ideas of women as mothers and carers thus lead to labour divisions and gender inequality, as women are unable to enter formal employment and must remain financially dependent on others. Additionally, informal work traps women in poverty due to the lack of security and regulation, as well as low pay, ultimately leading to the feminisation of poverty. The unequal distribution of unpaid domestic work based on gender constitutes a double-duty for working women and often leaves them with little or no discretionary time, which is referred to as time poverty (Hyde et al, 2020). This time poverty greatly limits women’s economic opportunities and leads to gender inequality as women are greatly limited by social and cultural ideas and gender norms (Hyde et al, 2020). Women understand the insecurity and vulnerability of informal work but often lack the opportunity or skills to move to formal employment.

As mentioned above, informal work undermines workers’ rights due to the lack of social protection, decent working conditions and rule of law. The informal economy also negatively impacts women’s economic and work rights. Article 11 of the Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW) obliges State Parties to eliminate discrimination against women in the field of employment, specifically their right to equal remuneration, including benefits, the right to social security, and the right to protection of health and to safety in working conditions (UNGA, 1979). Certainly, the right to decent work should be enjoyed equally by women and men. But the proliferation of women in the informal economy working low-paid and vulnerable jobs stems from women’s unequal access to opportunities. Unpaid care work, lack of fair pay and job security, poor working conditions, and limited opportunity to own and control land and inherit property are all undermining women’s rights.

The proliferation of women in low-paid and vulnerable occupations in informal work stems from continuing stereotypes on gender roles and women’s unequal access to economic opportunities and resources. Various services, facilities and technologies, from child-care to labouring-saving machinery should ease women’s reproductive and household responsibilities and enable them to participate in paid work outside of the home. Across the world, women bear the burden of unpaid care and domestic work which unfortunately reinforces gender inequality as women have less time for paid work and to attend to their own needs. When women do find paying jobs, the conditions of their homelife limit their bargaining power in demanding a fair income, safe working conditions, and social protection, all of which constitute their economic rights. For women to truly live the lives of their choosing, these economic rights must be realised. Investing in women’s economic empowerment sets a path for poverty reduction and for advanced gender equality. When living and working conditions of female informal workers improve, so does their productivity, which leads to increased income, contributes to overall economic growth, and reduces poverty in the long term.

Solutions

Already, countries around the world have been working to promote and encourage female education, which also improves women’s competitiveness in formal employment. With the necessary education and skills, women will then be able to find formal employment with less of the risks and dangers associated with the informal economy. Women should always have the opportunity for access to education and the relevant training required for formal employment. Nevertheless, this does not mean measures should not also be taken to improve the pay and working conditions in the informal economy. However, greater effort must be taken to include women in the economy and realise their economic rights. Barriers that prevent women from owning or inheriting land, opening bank accounts or having jobs, as well as starting their own businesses need to be eliminated so that women can pursue economic engagement legally and with the support of the government.

Without a doubt, women’s responsibilities in the home need to be alleviated and shared with partners and other household members. Other measures to ease women’s household responsibilities and free up their time for employment would be to ensure child care. The ILO’s Convention on Social Security (C102) recognises that the time required to care for a young child compromises a workers’ earnings (ILO, 1952). This then provides the basis from which to frame quality child care services as a component of social protection systems. Quality public and affordable care services for young children, ageing parents, or the ill would relieve the responsibilities for many women and girls. Often, young girls and women give up their education to remain at home and help out. Currently, 129 million girls remain out of school around the world (UNICEF, n.d.), with great consequences for gender equality.

In terms of economic rights, various measures must also be taken, as workers’ rights and women’s rights coincide in the informal economy. Governments must ensure that those working in the informal economy have the protection of labour laws and regulations, such as the right to unionise and to earn a living wage. These forms of organisation and representation have the potential to advocate for necessary changes in the informal economy and improve the working conditions for all. Another avenue to pursue is social protection for the workers, especially in times of illness, disability, work injury, maternity, and unemployment, so as to prevent the workers from falling into poverty. Furthermore, at the core of gender inequality is the need for equal pay for work of equal value between men and women. This has been at the heart of women’s rights and feminist movements’ demands over the past decades, without which gender equality will not be achieved. Without these measures, it is difficult for women to lift themselves out of poverty.

Conclusion

Women make significant contributions to the global economy through their informal work, and it is time they are rewarded accordingly. Yet again, social and cultural norms and stereotypes on gender roles hinder and harm women and their economic prospects, leaving them to find unsafe and low-paid informal work. The feminisation of obligations in terms of childrearing, caring and domestic work needs to change so that women can pursue better employment opportunities, in both the formal and informal economies. Governments must take greater initiative in securing the informal economy for both male and female workers by guaranteeing fair and safe employment. This will have an impact on women in poverty and on gender equality. At the end of the day, empowering women in economic areas is crucial to achieving gender equality, and the informal economy is a necessary sector to focus on given the large amounts of women employed informally.