Cities cannot become more equal or more economically productive if they exclude the vast majority of their workforce, and especially the working poor.

The report of New World Resources, based on the experience of the Women in Informal Employment: Globalizing and Organizing (WIEGO) network, examines how cities in the global South can create policies, regulations, and practices that support informal workers, thereby reducing inequality while promoting economic productivity and environmental sustainability. Does an equitable access to core urban public services can help achieve a more economically productive and environmentally sustainable city?

Informal workers’ activities – from retail business to waste collection and the production of automobile parts or the assembly of electronic goods – alleviates doubtless poverty and contributes to the whole city’s economic growth. Informal enterprises currently generate from 25% to 50% of Global South countries’ GDP (50% of non-agricultural GVA in West Africa, 46% in India). Moreover, the informal economy creates more jobs than the formal economy, particularly for low- and middle-income groups: globally, informal employment represents just over 60% of total employment and 50% to 80% of urban employment in cities across the global South.

Nevertheless, despite the public service they provide to the city and their contribution to low-income households, the general public, and the broader economy, city officials fail to recognize the contributions that informal workers make to the urban economy as a whole. Urban planners and policymakers still stigmatize the informal economy as a traditional or a “shadow” economy not complying with regulations and taxation, having low productivity and being a source of crime and unsanitary conditions. The reality is far more complex: they miss the dynamic, overlapping, and interdependent relationship between formal and informal economic activities through the exchange of goods and services and global supply chains.

However, by being either ambivalent or hostile towards urban informal workers, cities create a no-win situation, disadvantageous to both the productivity of the city and the livelihoods of poor households. According to Martha A. Chen and Victoria A. Beard, cities can enable a way out of this impasse by including organizations of informal workers, along with other stakeholders, in the formal processes of urban governance and management to negotiate policies and plans that balance competing interests and promote social and economic justice.

Most cities have adopted an exclusionary approach to informal workers and their livelihood activities, as illustrated by the constraints and barriers faced by the three groups of self-employed informal workers featured in the report. Street vendors face evictions, relocations and harassment: every day around the world, there is at least one forced eviction of street vendors. Home-based workers are confronted with an unequal access to core public services (notably, electricity, water, sanitation, and transportation) and single-use zoning regulations, which ban commercial activities in residential areas. Finally, waste pickers are often denied access to waste, have their waste confiscated while organizations of waste pickers are rarely allowed to compete with private companies for solid waste management contracts. These situations underline the real competing interests, both economic and political, for control of public space, public services, and public procurement.

Organizations of urban informal workers are increasingly forming federations and forging coalitions to demand more inclusive cities that recognize, value, and support their livelihood activities.  At the same time, in response to the rise of urban informality and inequality, a growing number of cities have introduced more inclusionary policies and practices towards informal workers, for instance:

  • Public services for home-based workers: Housing and infrastructure services for home-based workers in India at the initiative of The Self-Employed Women’s Association
  • Public space for street vendors: Infrastructure, design, and legal services for street vendors and market traders in Durban
  • Public procurement of waste pickers services: Integration of waste pickers in municipal solid waste management in Brazil

To conclude, 4 main recommendation are made to achieve more equal and productive cities:

  • Increase informal workers’ access to public services, public spaces, and public procurement
  • Reform laws and regulations so they support informal worker
  • Include informal worker leaders in participatory policymaking and rule-setting processes
  • Support coalitions for change