As the COVID-19 pandemic reached the vast developing world across Africa, Southeast Asia, and Latin America, those working in the informal economy found they were fighting a war without social protections.
“If the government wants to put us on lockdown, they should give us money. In a week we need at least 5,000 Kenya shillings.” When police were trying to close down a packed market in Kisumu, the third-largest city in Kenya, the clamor of dissenting voices of local vendors rose up.
Kenya is not the only African country relying on an informal economy, as 85% of employment on the continent is informal, compared to 44% in the world and only 12% in OECD countries. As the coronavirus has destroyed job markets all over the world, informal workers in developing countries are the least prepared; they are mostly people who are not covered by unemployment insurance or health insurance, and they are living paycheck to paycheck. This article presents some common challenges faced by informal workers in developing countries and possible solutions for governments and organizations to protect them.
Common Challenges Faced by Informal Workers
- A Dilemma between Work and Social Distancing
Social distancing is a luxury for informal laborers who cannot afford to stop working.
In India, people who work as plumbers, garbage collectors and street vendors earn $2 per day on average. For these workers, following the Modi government’s quarantine policy is a decision between getting exposed to the virus or staying at home and waiting for hunger and homelessness. For many workers who have a family to feed, not only in India but throughout the world, taking the risk of keeping working seems to be the only option. However, they sometimes face confrontations with police by doing so.
In Kampala, the Ugandan capital, hundreds of taxi drivers were arrested for violating the government’s two-week ban on public transportation, while they insisted that they “have no choice”. “What does the government expect us to eat? We shall die of hunger before we even contact the virus.” Julius Magaona, a cab driver in Kampala said.
- A Large Drop in Income
Home-based workers, migrant workers and street vendors take a large proportion of informal employment in developing countries, and they are facing severe financial loss due to their countries’ measures in responding to the crisis.
For home-based workers, many of whom are women in Southeast Asia that produce traditional crafts at home, border closures of their countries is the worst piece of news. The demand for crafts products dropped because tourism has fallen off, and prices of raw materials rose. As schools closed down, home-working women’s increased responsibilities in taking care of their children also affected their productivity.
Ride-hailing drivers also took costs of the lockdown. In Indonesia, a driver that earned 80,000 to 100,000 rupiahs daily are now making only 30,000 rupiahs($2.1) per day, and they do not have the option of “working from home”.
Migrant workers in Southeast Asia are not able to return to their overseas work after the borders closed. At least 15,000 newly hired domestic helpers and another 10,000 Filipinos workers were stuck in their home country. Although some Filipinos workers returned to their work before the border closure, for example, those employed in Hongkong, they also lost income worth 14 days’ work for taking quarantine.
For vendors in street markets, which commonly exist in developing countries, the lockdown led to a sharp decrease in sales, and some vendors are not able to continue working since they were selling “non-essential” goods.
- A Shortage of Personal Protection Equipment for Service Providers
Even since before the pandemic, people in the informal economy have been working without health insurance and legal protection. As many cities are now on lockdown, risks and costs of providing essential services are often transferred to them.
In Sub-saharan Africa, less than 20% of the population has access to safe sanitation, where 90% of workers are in the informal sector, among whom women are the most vulnerable because of biology and social-economic status. During the COVID pandemic, they also have no access to masks, hand sanitizers, and other protective equipment when working, leaving them at the highest risk of infection.
- The Heavy Healthcare Burden
In most developing countries, there is a large population working in the informal sector with a low level of social security, while the investment in the healthcare system is never sufficient.
In India, public primary health services do not exist in most cities, and the pandemic is further deepening the social divide between the rich and the poor. It is reported that there is only one isolation bed available per 84,000 people and one doctor per 11,600 people; informal workers have little access to health care when they get infected and even if they have that access, they cannot afford to get treated. As a result, about 400 million informal workers in India are at the risk of falling into poverty.
Challenges for Social Protection Response in Developing Countries
Ever since the coronavirus crisis emerged in January, the most cases have been reported in the middle-income and high-income countries of Asia, Europe, and North America. Governments and organizations’ responses in these countries have been attracting the most media attention; a majority of the reported interventions involved banning gatherings, public health guidelines(washing hands, social distancing, and self-quarantining), and other strict restrictions on social and economic activities. These intervention plans assume that people have access to clean water, space and other essential services and that governments have the information and resources to help groups that will be heavily impacted by the crisis. However, when some developing countries try to take similar measures to handle the crisis, they soon realize that their cases are different.
- Governments in developing countries do not have the financial muscle like developed countries do to maintain the national economy. In Sub-Saharan Africa, $150 billion of new debts should be mobilized to cope with the crisis. Countries in this region do not have the capacity to mimic some measures taken in other countries like paying informal firms to give their employees paid leave.
- Governments do not have the health information or data of people in the informal work sector. Developing countries usually have a large number of migrant or illegal workers; reaching out to them is harder due to culture and language barriers. Information asymmetry also contributes to difficulties in implementing social protection measures. For example, when countries try to expand their existing social insurance programs, they find it hard to assess informal firms and workers’ “regular” income.
- Population mobility plays an important role in controlling the spread of any infectious disease and developing countries tend to have more population movement. A WHO study shows that, the population mobility in West Africa is seven times higher than in the rest of world. Therefore, border closures often result in confrontations and humanitarian issues in the developing world. In February, the Philippines, a country that has 10% of its population working overseas, closed its border unexpectedly and migrant domestic workers were not able to return to their workplace outside of the country.
- In many informal settlements, people do not have their own water supply. Water sold by private providers is at a high cost and prevents people from following the government’s instruction of washing hands frequently. In some cases, people use their financial assets to buy water, food and sanitizing items out of necessity, getting themselves into a worse financial situation. All these details should be taken into governments’ consideration when implementing intervention policies.
Possible Solutions For Relieving the Burden on Informal Workers
Some countries in the developing world have taken numerous measures for the relief of workers in trouble. There are good practices implemented in some countries that can be widely promoted. For government actors, the most direct way to help informal workers is cash transfer programs.
- Cash Transfers to Replace Income
Some jobs in the informal economy do not fall into the “essential” category according to the government’s standards, and workers are forced to stop working without paid-leave. A direct way for governments to help is launching Cash Transfer Programs. For instance, in India, the Finance Ministry released a total package of $23 billion to Indian residents, including cash transfers, food, and insurance coverage.
In Peru, where informal workers take a 70% share in the labor market, the government just claimed to make a $100 one-time payment to the poorest.
However, as many cash transfer programs are aimed at the poor, some informal workers living above the poverty line may fall into poverty without receiving assistance during the pandemic. To make cash transfer programs more inclusive, governments should pay attention to specifically assist the informal sector. For Example, the Auxilio Emergencial in Brazil is targeted at self-employed workers, paying them 60% of the minimum wage for three months. In Tunisia, a cash transfer program targeting the informal sector is paying $70 to households with no access to any social security schemes.
As helpful as it sounds, the amount of cash transfers in developing countries is rather moderate for poor families to survive, most of the cash transfer measures are only temporary.
Local NGOs, community actors and private companies also play a central role in reach out these marginalized groups. Some possible solutions that have been adopt by these organizations include:
- Fundraising Campaigns to Support Informal Workers
Local organizations, such as some non-profit organizations working on marginalized groups and workers unions, may have better information to identify the people in need of Personal Protection Equipment(PPEs) and vital services, they are playing an important role in fundraising and distributing suppliers. Some examples include:
An Indian non-profit organization, Community Health, Housing and Social Education(CHHASE), is raising money online to donate family kits with masks, sanitizing items, soap, and clean cloth to 12,000 families.
The South African Domestic Service and Allied Workers Union is raising money for single mothers and domestic workers who lost their jobs in the pandemic in South Africa.
Moreover, some local organizations also use social media to raise awareness and ask for donations. The #sanitizersforslums campaign on Twitter is a good example. Under the hashtag, citizens are calling for governments to provide free sanitizers for people in slums.
- Physical Distancing Strategies by Communities
Many informal workers live in informal settlements that have a high population density, and governments do not have demographic information of these residents and where they usually get food and services. Local groups and community representatives can work together to develop a strategy to re-arrange accommodation, control population movement, decide which public spaces are to close and take collective actions to buy and distribute food and water. These strategies made within communities are often more effective, as local leaders have a better knowledge of regional conditions, and some confrontations and conflicts can be avoided if residents receive guidance from community representatives that they trust.
Experience from our history of fighting infectious diseases is helpful. During the Ebola outbreak in West Africa, Ebola Community Facility Care Centers(CCCs) were built as temporary facilities to support early-stage detection and isolation at the community level. The CCCs successfully limited transmission by shortening the time patients waited for treatment.
In the COVID-19 pandemic, there are also good practices conducted by community groups to deal with food shortages. In India, local Self Help Groups(SHGs) have set up more than 10,000 community kitchens to feed stranded workers and help identify people in need of help.
- Data Collection and Information Sharing at the Community Level
Information asymmetry hinders governments and organizations from identifying workers that will be affected badly by the pandemic, as social-demographic data of informal workers cannot be collected through any official documents or insurance records. Community-based groups can fill the information gap by collecting data through local networks.
Slum and Shack Dwellers International (SDI), a network of community-based organizations that has been collecting baseline data and maps of urban informal settlements over the years, provides critical information to support governments and organizations making decisions to help low-income workers.
Also, those workers are often victims of disinformation campaigns. They do not have access to public health education or an information-sharing channel from employers. Some organizations are working on providing accurate health information and guidelines at the community level. The Whatsapp Coronavirus Information Hub is working with UNDP, WHO, and UNICEF to set up online information-sharing platforms for community leaders, local governments, NGOs and educators to provide useful resources for residents.
Social Science in Humanitarian Action. 2020. “Key considerations: COVID-19 in informal urban settlements”.
ALNAP. 2017. “Learning from the Ebola Response in cities”.
ECONFIL. 2020. “Social Protection Response to the COVID-19 Crisis: Options for Developing Countries”
WIEGO. 2020. “Informal Worker Demands During COVID-19 Crisis”.
WEIGO. 2020. “Impact of Public Health Measures on Informal Workers Livelihoods and Health”.