Published on Jobs and Development

Inclusive cities for informal workers

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Street vendor in South Africa. Photo: John Hogg / World Bank

In most developing countries, well over half the urban workforce is informal. Yet informal workers - and their livelihoods - tend to be ignored or excluded in city planning and local economic development.  No amount of social or financial inclusion can make up for exclusion from city plans and economic policies. The urban informal workforce, especially the working poor, need to be recognized, valued and supported as economic agents who contribute to the economy and to society.
Consider three groups of urban informal workers.
  • Home-based workers produce a wide variety of goods and services from their home: from garments and textiles, craft items, and prepared food, to electronic goods and automobile parts.  Yet most do not have secure tenure or basic infrastructure services to make their homes into productive workplaces. And many face evictions and relocations.
  • Street vendors provide easy access to a wide range of goods and services: from fresh fruits and vegetables to building materials; garments and crafts to consumer electronics; prepared food to auto parts and repairs. They buy goods from both formal and informal suppliers and pay for services provided by porters, security guards, transport operators and others. Many pay fees for licenses, permits or the use of public space, creating revenue for local governments. Yet most lack a fixed and secure vending site; most face harassment from local authorities on a daily basis (including demands for bribes, arbitrary confiscations of merchandise, and physical abuse); and many face the risk of eviction.
  • Waste pickers collect, sort, and recycle waste: helping to clean city streets and reduce carbon emissions.  Yet they are not recognized for their services and are often denied access to waste.
Urban renewal schemes tend to intensify the disadvantages faced by the urban informal workforce. Consider the case of India where four out of five urban workers are informal. Across India today, urban renewal schemes are undermining urban informal livelihoods. Home-based workers are being forcibly relocated to the periphery of cities. Construction workers are being displaced by machines. Street vendors are being evicted from their traditional markets. Transport workers - bicycle rickshaw drivers, horse cart drivers, cart pullers, head loaders - are banned from certain roads.  Waste pickers are denied access to waste and are not allowed to bid for solid waste management contracts. In the name of modernity and growth, 80% of the urban workforce in contemporary India faces economic exclusion, if not loss of livelihoods.
What the working poor in the urban informal economy need most urgently is recognition and inclusion as productive economic agents: inclusion in city planning, the allocation of urban land, basic infrastructure and transport services, and local economic development.  Otherwise their livelihoods will remain threatened by the juggernaut of urban renewal. No amount of social and financial inclusion can compensate for the costs of having one's livelihood undermined or destroyed.
Recognition and inclusion of urban informal workers as economic agents is possible.  In several cities in India, home-based workers have received basic infrastructure services to improve their homes-cum-workplaces; street vendors have been allocated vending sites by the local municipality; and waste pickers have received contracts from the local municipality to collect, sort, and recycle waste. Most recently, in February 2014, the Parliament of India passed a law to regulate and protect street vendors.  There are similar examples from elsewhere in the world. Over 6,000 street vendors in a central market area of Durban, South Africa received infrastructure and technical support.  Waste pickers in Bogota, Colombia are being paid by the municipality to collect, sort and recycle waste.   And the Government of Thailand has adopted an act in support of home-based workers.
What is needed is an approach to urban planning and local economic development that recognizes the contributions of the informal economy and seeks to integrate informal workers - and their livelihoods - into urban planning and economic policies. What is needed is an approach that promotes hybrid cities designed to integrate and support both the informal and formal economies. What is needed is an approach that values economic diversity: large and micro enterprises, formal and informal activities. What is needed is an approach that would promote inclusive urban planning by inviting organizations of urban informal workers to have a seat at the policy table. This will require a radical reappraisal of urban planning to promote the equitable allocation of urban space, urban services, and urban infrastructure in support of urban informal livelihoods, not just formal firms. This will also require that the working poor in the informal economy are organized and have sufficient voice and bargaining power to help shape the development trajectories of the cities in which they live and work.

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