Feminisation of informal economy

December 20, 2020

Women workers make up 74 percent of the informal economy

Photo by Rahat Dar

According to the World Bank, a majority of the people living on no more than $1 a day are women. Also, the gap between the number of men and women living in poverty has continued to widen over the past decade.

There are two types of definitions for poverty, absolute and relative. Absolute definitions involve a lack of sufficient means to obtain food, clothing and shelter. Relative definitions use various criteria to determine how constrained people’s lives are in terms of decent living.

A majority of the poor in Pakistan are part of the informal economy. This includes home based workers, domestic workers, sanitary workers and care workers having no formal contractual arrangements. Under the prevalent laws they are also ineligible for social protection.

Women workers make up 74 percent of the informal economy. Women from poor households lack access to decent employment. In the absence of social protection frameworks in the informal economy, the economic stress caused by Covid-19 has pushed more women into home based work, domestic help and farm work as wage earners. This has resulted in a further lowering of the wages offered to them.

Most of the informal workers are locked into a power structure that keeps them dependent on exploitative employers.

Among the main causes of poverty, a lack of adequate income and assets is the most crucial one as it results in a failure to ensure access to basic necessities like food, shelter, clothing and acceptable levels of health and education. Assets, in this context include skills and good health, land, access to infrastructure, savings, access to credit and networks of contacts and reciprocal obligations. Thus a sense of lacking a voice in the powerful institutions of state and society is a factor in poverty. A lack of resilience in the event of adverse shocks too makes one vulnerable to poverty.

Women workers in the informal economy are some of the poorest amongst the poor for several reasons. They bear a double burden: poverty and the gender bias in social and economic life. The bias is reflected in national income statistics. Women constitute a majority of agricultural workforce but many of them work without any remuneration as “unpaid family help”.

Most of the women in domestic help employment come from poor and rural communities settled in urban areas. The rampant poverty and unemployment are push factors for the rural poor. The lack of suitable mechanisms to provide job seekers work closer to their homes makes these women leave their homes and come to cities and domestic work. Their lack of readily marketable skills and low income status speak for their vulnerabilities. Children are particularly vulnerable to exploitation and harassment. It is important to note that the mediators encourage and perpetuate deference, docility and subservience among such workers.

The dependency in seeking employment and placement has led to the commodification of women in domestic service. It has been observed that the middle persons perpetuate exploitation. Such activities entrench patriarchal values and subordination of women workers. This also reinforces labour market segmentation so that women from marginalised communities are pushed into low-wage and precarious work without any protection, checks and complaints mechanism. The middle persons or agents are therefore part of a system that contributes to growing labour mobility.

The decline in GDP growth over the recent years has led to a decline in employment rate, labour productivity and real wages in both agriculture and manufacturing industries. In the absence of inclusive economic growth strategies, roadmaps and public funded initiatives, the situation is likely to worsen.

Male unemployment and migration also tend to push more and more women into informal work. Women are also poorer because of unequal access to resources and their distribution. Poverty is also linked to statistical invisibility of women in home based sector, lack of control over productive resources, limited participation in political and economic affairs, lack of land ownership and gender discrimination in labour markets. The problem is compounded by lack of access to health facilities, education and skill training.

Women all over the world, especially in South Asia, face institutional obstacles to control land and other productive resources. Their low entitlements such as restricted access to land ownership and credit as well as a lower literacy rate and management skills make women more vulnerable. Women in home based work are often denied access to credit and assets. Their labour therefore goes unrewarded and unrecognised. Their health care and nutritional needs are not a priority and they lack sufficient access to education and support services. Their participation in decision making at home and at community level is minimal.

High fertility and high population growth rates, ill health and poverty are also linked in a vicious cycle.

Despite its claims of race- and gender-neutrality, neoliberalism is replacing the old hierarchies with new patterns of racism and sexism. There has been an increase in low-paid, part-time contingent service sector and outsourced manufacturing work that relies disproportionately on marginalized women. The dramatic expansion of a low-wage service and manufacturing sector on a global scale has intensified their exploitation and reshaped the labour market.

The growing employment sectors tend to be without benefits or labour protections, while full-time, well-paid manufacturing jobs are on the decline. This shift in the labor market has resulted in women increasingly carrying the burden of financially supporting the family by entering into informal contracts in manufacturing chains.

Neoliberalism has also created a new political, economic, and cultural context through deregulation, privatisation, securitisation, and the dismantling of the welfare state. These changes have had a contradictory impact on women.

Neoliberalism has overturned the benefits of social welfare citizenship especially in the low-income countries, limiting those to the organised sector and excluding the unorganised working class. The dismantling of the economic safety net, trend toward privatisation and the rise of security state have increased the burden on women. The reduction or elimination of welfare benefits for the poor, cutback of social services, reliance on market strategies, and mass confinement have led to a crisis of social reproduction and a corresponding increase in women’s workloads.

With a decline in social rights and publicly-funded support services, women have access to fewer economic resources and must either turn to the private sector or increase their own unpaid labour.

The writer is executive director of HomeNet Pakistan. She can be reached at lailazharali@gmail.com 

Feminisation of informal economy in Pakistan