A vendor sells fruits during a heavy monsoon rain shower in New Delhi. Anindito Mukherjee/Reuters

In developing countries, informal workers make up 50 to 80 percent of the urban workforce. Keeping them locked out of prosperity is bad for everyone, according to a new report.

Connaught Place in New Delhi has a rich pageant of street vendors. Chai-wallahs who dole out tumblers of steaming tea to weary bureaucrats; Chaat guys pushing bags of crispy Golgappa shells and vats of chutney on their bicycles; grizzled ladies squatting on sidewalks in front of colorful spreads of trinkets and tchotchkes; boys at the roundabout, selling cages full of parrots they caught in the Lodi Gardens. These are among Delhi’s informal workers.

They not only contribute to the city’s economic output but form an integral part of urban fabric. And yet they face numerous barriers to economic, political, and social integration—many of which are set up by the city itself. This is a common state of affairs in the urban centers of developing countries, but it doesn’t have to be.

That’s according to a new report by the World Resources Institute. It outlines why this sector of workers should be treated as partners in the economy, and highlights examples of cities where that is actually happening.

According to the paper, informal workers—like street vendors, waste-pickers who earn money for recycling trash; people who make textiles, garments, shoes, electronics, and other products at home—make up 50 to 80 percent of employment of cities in developing countries. They also contribute a quarter to half of the non-agricultural Gross Domestic Product (GDP). But people working in these three types of jobs face tough odds.  

If they work out of their homes in one of the slum settlements in the city, they may not have access to electricity, clean water, and sanitation; they could be forcibly evicted and resettled far from the communities and the business networks they’ve created. Or, in some cases, the local land-use laws may not even allow them to run a business legally from their homes.

Waste pickers, despite the fact that they’re helping the environment, are routinely denied contracts by private agencies and local governments, and often have their haul of recyclables confiscated. And for vendors, the big problem is that cities often don’t give out enough permits. Without permits, these low-income workers become targets for harassment by police and for solicitation of bribes by corrupt municipal workers. In Delhi, last November, I witnessed a typical example of this. In broad daylight at Connaught Place, a municipal agent shoved the bicycle of a chaat vendor in a show of power, spilling the container of snacks he was selling on the sidewalk. The official then walked away briskly, as a crowd gathered in defense of the beloved vendor. To warrant that sort of bullying, the chaat vendor may have refused to pay the agent a bribe, some in the crowd conjectured; or perhaps, he’d just been in the way.

Such experiences may mar life in the city, but are not likely to deter migrants from rural areas from moving to urban centers anytime soon. And if, as current worldwide trends indicate, cities’ populations continue to grow, the number of people will likely continue to outpace the availability of formal employment. That means the body of informal workers will swell. Working with, not against, new additions to a city may therefore be a good idea, the report suggests.

“The best way forward is to include organizations of informal workers in the formal processes of urban governance and management to negotiate policies and plans that balance competing interests, and promote social and economic justice,” said Martha Chen, a professor of public policy at Harvard University who co-authored the report, in a statement.

The WRI paper proposes three major shifts in policy to correct course. The first: Increase access to public utilities, spaces, and resources; Second: Revise laws that have excluded informal workers in the past, and institute ones that actively include them. The third recommendation: Fold informal workers into local governance.

Making the process of obtaining permits and registering businesses more transparent, and developing more progressive tax policy and incentivizing payment of taxes, are legal steps that the study’s authors say should be taken. Soliciting the input of informal workers in local economic and zoning policies, as well as ensuring that market areas that have sprung up organically are preserved and acknowledged, not destroyed, should be an element of local governance.

The report presents successful case studies over the past decades where one or a combination of these recommendations, is being implemented. In India, the Self-Employed Women’s Association (SEWA), a trade union of 1.5 million women informal workers, has been negotiating with municipal governments for 45 years now to ensure the provision of core public infrastructure services for their members. In a separate case, the city of Bhubaneshwar designated certain areas as “vending zones,” where vendors were authorized to freely conduct their business in 2006.

In Durban, South Africa, a non-profit helped preserve a natural street market of up to 8,000 vendors in the 1990s, which would have otherwise have been razed. In Thailand, an organization of home-based workers was able to get the Bangkok Mass Transport Authority (BMTA) to obtain transportation for workers who had been relocated outside the city. And various Latin America cities, including Buenos Aires, Argentina; Belo Horizonte, Brazil; and Bogotá, Colombia, have taken steps to support waste pickers. They’ve provided transport, contracts, and space for sorting and storing waste.

A lot of these policies require recognizing the work of non-profits and organized unions that engage with these workers, and listening to these workers’ demands. But perhaps most importantly, the shifts in policy require a shift in attitude. They’re predicated on seeing informal workers as assets to be leveraged—as people, not problems.  

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