INFORMAL ECONOMY

July 4, 2012 Economy, July 2012 Leave a comment

A Blissful Orchestration of the Frail Home-based Workers

Production and consumption of a country are based on its economic system. There are two types of economies: formal and informal. Formal sector is regularised by the government whereas informal sector is unrecognised; though the informal sector is not completely unregulated, there are some norms to keep it ‘somehow’ regulated.

Informal sector includes brick kilns, livestock, fisheries, street vending, hawking, domestic work, waste picking and home’ based work. Globalisation played a major role in changing the economic conditions. Socio-cultural factors including political, social and economic systems also have a direct impact on the economy; thus, they should be favourable. Mushroom like growth in the informal sector increases especially when there are no employments in the formal sector.

The role of the informal sector of the economy is two pronged. It is important as well as controversial. On the one hand, it provides job to the downtrodden people and reduces unemployment, on the other these jobs are low’ paid and lack job security. However, non-government organisations for informal workers have a pivotal role in improving the condition of HBWs. These organisations have a direct impact in enhancing their vocational skills, their know ‘how about marketing and bargaining skill.

Majority of the working women is working in the informal home-based sector. The reason why most of the women work at home, i.e. fall in this sector is they are generally not allowed to go out in the field to earn wages. Therefore, working at home and associating to the informal economy becomes a natural choice for them.

Main reason for adopting this occupation is the unemployment or irregular job of their male family members. Most of the home-based workers (HBWs) live in small and shabby houses and live as a part of the joint family systems. Most of them are illiterate. They can be single or married, widow or divorced. However, their age and marital status do not change their wages.

The role of the informal sector of the economy is two pronged. It is important as well as controversial. On the one hand, it provides job to the downtrodden people and reduces unemployment, on the other these jobs are low’ paid and lack job security.

Women HBWs comprise 70% of the informal labour sector having a great contribution in the economy. They are the producers and artificers but are considered as poor and dependent part of a country as they are least represented in the national statistics. They need to be recognised as ‘labourers’. The government should increase their productive skills by imparting trainings, giving them an easy access to credit schemes, market opportunity. They should be protected by legislation.
Most of them do not have written contracts; decreasing demands of handicrafts / handmade products, and increasing interest rates and prices make their lives more miserable. They face production challenges such as lack of modern equipment, no easy access to micro credit schemes, due to irregularity and seasonal work, they have to do different natured works to make their both ends meet. Lack of information about the changing market trends, meager wages and in health challenges, poor diet is most evident which brings all other sufferings related to health.

Middle person is a great power. He can either make the lives of the HBWs easier or miserable. He/she is the provider of ‘orders’ for the HBWs and gives them remunerations for the value-added finished products. Irregularity in payments, non-payments for first work/contract/’order’ and the threat for the non-availability of new contracts is also due to the middle person.

Most of them do not have written contracts; decreasing demands of handicrafts / handmade products, and increasing interest rates and prices make their lives more miserable.
Role of the state cannot be denied in any sphere of life whether it is religion, culture, or any form of wants and disparities, redress of issues of health, sustainable development, or economic empowerment. It seems that the government of Pakistan does not know the importance of the HBWs sector because the labour laws do not give protection to the HBWs. Prime hindrance in this regard is that HBWs do not come under the umbrella of ‘workers’. The need is to recognise HBWs as workers and add the definition of HBWs in the documents concerning every labour right, so that any further development in the legislation and statute may be applied to HBWs positively.
Being labourers, they are entitled to all the workers’ rights, for example, facilities of social security, health facilities, minimum wages, etc. But, as they are not included in the definition of laborer therefore they are deprived of all these facilities. It is not only against the human rights but also against the labour rights.

An informal worker has to opt informal sector, because s/he has no other cushion to fall back on. There is a need to eliminate the negative features of the informality on the condition that the informal workers would be earning a ‘decent living’ while keeping in view that one of the essential feature of the informality on the condition that the informal workers would be earning a ‘decent living’ while keeping in view that one of the essential feature of the informal sector of the economy that is of providing the downtrodden poor people with sustainable livelihood may not lose.

By: Rubina Kokab

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