By Namira Samir

The informal economy is a place where identities of labourers become inextricably intertwined. This has severe implications for the fulfilment of labour rights. This article looks at three common identities of informal labourers – namely entrepreneur, citizen and worker – from a labour rights perspective, and considers the consequences of tagging informal labourers to these identities. More often than not, the outcomes of fulsome identities such as ‘entrepreneur’ or ‘citizen’ only fuel precarity.

Introduction

Precarious, invisible and transitory are the defining attributes of work in the informal economy (Lund and Nicholson, 2004). Informal actors are trying different ways to make their economic contribution worth every drop of sweat – including arranging a collective organisational form, accepting help coming from development initiatives run by international organisations (IOs) and non-governmental organisations (NGOs), or via labour unions. The ways these organisations represent informal actors are manifold. IOs and NGOs mostly consider informal actors as entrepreneurs. They regard the informal economy and microenterprises as “two sides of the same coin” (Elyachar, 2005). Meanwhile, labour unions seek to represent informal actors with a rights-based approach. Yet, in some cases, they end up with a reductionist approach where the focus becomes social protection for the precarious workers by leveraging the identity of informal workers as marginalised citizens (Agarwala, 2008).

This article argues that referring to informal actors as entrepreneurs or citizens authorises “positive discrimination” (Harriss-White, 2009), in which the informal actors captured by the identities can reap the benefits of their precarity, while simultaneously facilitating “othering” – disfavouring the importance of a collective identity in the fight for inclusive social policy (Lindell, 2010). I further argue that positive discrimination is inimical to “bonding” social capital through the maximisation of “bridging” social capital. While, ideally, informal actors should be regarded as “workers”, the agenda comes with caveats by which informal actors should clearly define the focus of the struggle and not create yet another divide between the worse-off and better-off collectives (Standing, 2014).

A Tale of Power and Informality

Stories and studies on the informal economy are hard to separate from economic liberalisation. The massive arrival of middle-class, recently laid-off workers to the informal economy hinted at a shift of the narrative of the informal economy from something insignificant to something of value. The growing informal economy prompted informal actors to reconsider their worth. They began creating strategies – not to disappear, but to be acknowledged. It is, as Meagher (2010) stated, “a decisive shift from a politics of exit to one of collective voice”.

Informal actors have identities besides their daily, precarious jobs. Some belong to certain religious or ethnic groups, work in a specific industry with a distinctive gender ratio, or live in the same area. These identities can be mutually reinforcing or destructive, depending on how the arrangements of collective voices are made. Sometimes they may prefer their ethnic or religious associations, casting away the divergent (Lindell, 2010). This form of fragmentation, which is also visible from the cluster-based association of informal actors, explains the lack of success of informal associations in gaining acknowledgement from employers and the state (Meagher, 2006; 2010).

This tragedy spawned a bewildering number of development initiatives from different actors claiming to support informal actors’ rights. Elyachar (2003)’s long-term ethnographic study on microenterprises and NGOs in Egypt illustrated the tension between the state, NGOs and informal actors. While informal actors had previously established their informal association to connect with the state, they renamed their organisation from rabta to NGO. However, their interpretation was flawed. It was not the name that gave the institution such power. It is their established identity and bargaining power that causes NGOs to be treated as “the ear of the state”.

While IOs and NGOs claim to represent and help informal actors, they tend to fall behind in their understanding of work in the informal economy. Equating informal economy with microenterprises and considering informal actors as entrepreneurs will affect the collective objective of informal actors within and outside the IOs’ and NGOs’ range, because it will trigger more development initiatives with entrepreneurial eyes, while the remaining informal actors are left in the back seat with their precarity.

IOs and NGOs might have a respectable identity and bargaining power. But, by representing informal actors with a reductionist identity, it obstructs the main purpose of informal actors seeking help or protection. Similarly, while the labour unions recognise informal actors as workers, they are inclined towards short-term goals, such as social protection for the “poor” informal actors by leveraging the identity of marginalised citizens. This is problematic in various ways for all informal actors, not just the marginalised.

Positive Discrimination, Social Capital and The Precariat

Identifying informal actors as entrepreneurs or citizens triggers what Harriss-White (2009) called “positive discrimination”, where the identity of the less-powerful informal actors helps them prosper. However, it hurts informal actors who are ineligible to be assigned to either identity. This phenomenon can be understood using social capital theory. While, in his initial conceptualisation, Putnam (1993) limited social capital to social relations in a community, the follow-up of his work tackled the issue of “bonding” and “bridging” social capital (Putnam, 2000). Bonding social capital concerns horizontal associations between people, whereas bridging social capital encompasses the vertical relationships in a community, between different groups, classes and networks (Meagher, 2005; Woolcock and Narayan, 2000). The marginal and entrepreneur actors’ superiorities in bridging social capital can pave the way for acquiring their demands through the state or development initiatives. Yet, it will harm the bonding social capital between informal actors and offset the purpose of collective action.

Lindell and Appelblad (2009) draw attention to state-informal actors’ relations. Through the privatisation of city markets, the state weakened the vendors and caused them to settle for being the recipients of care. The consequences are twofold. First, it will destroy the bonding social capital between the vendor and non-vendor informal actors. Second, the outcome will likely benefit the state and the employers, since they are released from their responsibilities to protect all kinds of work in the informal economy.

A study by Jiang et al. (2018) on social protection and the Hukou – a household registration system in China – showed how citizenship is inimical even to people with a shared identity. Migrant workers were ineligible to request social protection or social insurance from employers or the government, because they did not have the local Hukou. Albeit context-specific, the situation of rural-urban migrants working in the informal sector is not a rare phenomenon. Yet, in China, both identities as migrants and as the poor were rejected by the government and the employers. This suggests that as an identity, “citizens” is not just discriminatory in nature, but also weak; it can be twisted by the government and employers.

The one thing that is shared between informal actors is their precarity. The identity is untwisted and represents informal actors as a collective. Standing (2014) used a class-based approach in drawing from the struggle of informal actors. He assigned informal actors to a new kind of working class, the precariat. The precariat includes the drop-out working-class, migrants, minorities and the erudite – of which each category of actors possesses a diverse trump card that, if used as a collective, can allow the acquisition of their rights as labourers. For example, educated informal actors might have superior knowledge about labour rights and the inherent strengths and weaknesses of the state and development initiatives. Meanwhile, migrants’ and minorities’ trump card is their economic contribution. If the precariat recognises its strength and works as a collective, there is no room for state or employer neglect – because the choice to opt out from granting labour rights no longer exists.

Conclusion

The informal economy is considered synonymous with entrepreneurial activities and poverty, when it should have been “all income-earning activities that are not regulated by the State” (Castell and Portes, 1989). In this article, I have argued that entrepreneurs and citizens are unrepresentative of the shared identity of informal actors for three main reasons. Firstly, with regard to entrepreneurs, it encourages a stream of funding by development initiatives that are solely directed towards creating microenterprises, while leaving the labour rights issue of informal actors out of the picture. Second, it enables positive discrimination towards the users of the entrepreneurs’ and the citizens’ identities. Thirdly, it reflects the capitalisation of “bridging” social capital in a way that destroys the existing “bonding” social capital between all informal actors. Besides, identities as entrepreneur and citizens can be distorted by the benefactor of rights.

I argue that “workers” reflects the collective identity of informal actors. The diversity of informal actors’ skills, educational levels and type of work (Standing, 2014) can be transformed into a shared strength of a collective voice demanding labour rights from employers and the state. Settling for less than what they deserve would trap informal actors as prisoners of their own identity – hopeless, dark, and trivial.

Featured image: Masked workers labor at a factory in China via Getty Images

About the Author

Namira Samir is a PhD candidate at The London School of Economics and Political Science (LSE). As a development economist, she uses an interdisciplinary approach and mixed methods to understand poverty and inequalities. Her PhD research focuses on the development geography of Islamic Microfinance in Indonesia.

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