This article is written by Ayooshee Dookhee, programme specialist for Governance and Policy at the World Economic Forum and Apolitical Insider Fellow. This article has been edited by Hanin Odeh, Apolitical Insider Fellow.

The consequences of the Covid-19 pandemic are being felt by each and every one of us, but perhaps no other area has been so transformatively affected than the world of work. From nurses without personal protective equipment caring for Covid-19 patients to the Indian rickshaw drivers whose livelihoods suddenly stopped when Prime Minister Modi ordered the lockdown of India’s 1.3 billion citizens, to white-collar workers stranded at home with screaming children — the pandemic has exposed the heterogeneous nature of workers.

Further, it exposed the inadequacies of social protection and the all-too-often forgotten indecent global supply chains, often propped up by private sector actors.

We already know that the road ahead for a whole category of workers will be unforgiving but public services and servants have had a big role to play in the response and recovery. An important first step will be to acknowledge the blind spots regarding the informal economy

From furlough to short-time work, multiple job protection schemes are being deployed across OECD countries. But the battle is different in emerging and developing economies, where informality is widespread, averaging 40% of GDP. As Covid-19 continues to paralyse economic activity, from Mexico City to Mumbai, millions of people risk being pushed into extreme poverty. Five months into this raging pandemic, we already know that the road ahead for a whole category of workers will be unforgiving but public services and servants have had a big role to play in the response and recovery. An important first step will be to acknowledge the blind spots regarding the informal economy.

The origins of informal work

The phrase “informal sector” first appeared in development circles in 1972 but its roots date back to development efforts of the 1950s and 1960s.

The International Labour Organisation (ILO) defines the informal economy as “all remunerative work (i.e. both self-employment and wage employment) that is not registered, regulated or protected by existing regulatory frameworks…”, encompassing a range of jobs from street vending and waste picking to short-term contract work. Many of these workers are migrant and daily wage workers.

News emerging on this topic highlight India as the primary country where daily wage and migrant workers are being heavily impacted — many walking hundreds of miles to reach their villages from urban centres, even with some workers getting killed in train accidents while fleeing. But these are not Indian stories solely. I write from Geneva, Switzerland and next door in Italy, migrant fruit pickers are being exploited for little pay, stuck in unhygienic and overcrowded camps.

The question poses itself: why are workers of the informal economy continuously losing out?

First, it is a matter of semantics. Policymakers have, for half a century now, toyed with the term “informality” and as a result fallen victim to the divergent views on formal vs. informal. Further, empirical studies have largely failed to disaggregate the informal sector; and today, policies are much more informed by normative thinking (reducing informality will boost productivity and growth) rather than disaggregation of data as a policy instrument in and of itself.

Businesses have a powerful role to create more shared economic gains but should not do so at the expense of social policies. By living up to their side of the bargain — delivering fair wage and safe working conditions — they can pave the way for an equitable recovery out of the mess that years of bad practices have spurred

The diverse needs and characteristics of informal workers are rarely documented, which has meant that even before the pandemic there was little possibility for needs-based assessments. As a response to Covid-19, governments are struggling to provide adequate social protection as most interventions are emerging as crisis management where a more fruitful policy would have been long-term institution building and provision of safety nets, which would have protected workers the minute crises hit. Crucially, policymaking has failed informal workers because of its lacklustre obsession with regulation and formalisation — upholding a tendency to treat the sector as homogenous and therefore in need of blanket policies.

Policymakers cannot ignore the importance of disaggregated data — starting with more rigorous data collection on the informal sector — in mitigating the adverse effects of informality.

It’s not just the responsibility of government

On the African continent, some countries have cut income tax rates while 18 countries in particular have lowered interest rates to encourage individuals and businesses to borrow. Although these are promising measures, they benefit those in formal employment, already equipped with a level of de facto protection. Earlier this year in India, the government set the ambitious goal of creating a national database documenting its 450 million informal workers in an attempt to provide them with social security. One might argue that the effort has come a little too late.

Second, it is a matter of responsibility. Ensuring decent work is not solely the responsibility of the government. Businesses operating in global supply chains need to step up above and beyond corporate social responsibility.

Workers in the garment industry, for example, are going through particularly hard times. Plagued by subcontracting practices, this industry exemplifies how action taken at one level (for example, lockdown measures in Europe) can have serious ripple effects at different levels of the global supply chains. Lockdown measures paired with slumped consumer demands led to brands suspending or withdrawing about $3.2 billion worth of orders, resulting in 2.27 million direct job losses.

A damning 2016 report by the International Trade Union Confederation (ITUC) exposed some of the realities inside global supply chains of 50 top companies; but four years later, nothing seems to have improved. It is also the responsibility of those employing workers in their supply chains to save them from the tough choice of preserving their health or losing their livelihoods. We can only come to this through deep metamorphosis: greater transparency, a re-imagining of consumption and production, and finally, a duty of care towards each other.

Businesses have a powerful role to create more shared economic gains but should not do so at the expense of social policies. By living up to their side of the bargain — delivering fair wage and safe working conditions — they can pave the way for an equitable recovery out of the mess that years of bad practices have spurred.

Co-designing the recovery

Covid-19 has ushered in a sense of urgency and perhaps this is a good thing. Effective policymaking will need effective partnerships — with employers — to avoid permanent unemployment and consequential poverty. However, these ambitions risk turning into empty words without social dialogue. A new strategy will recognise that decades of decline in workers’ bargaining power has meant that lived experiences of workers went unheard. Now is the time to listen to workers. — Ayooshee Dookhee

We want to hear what you think about this article. Pitch an article to us or send your comments to [hello@apolitical.co](mailto:hello@apolitical.co)

(Picture credit: Unsplash)