Informal Workers

The ILO (International Labour Organization) refers to informal employment as “all economic activities by workers and economic units that are – in law or in practice – not covered or insufficiently covered by formal arrangements”.

In practice, we could think of four general indicators which describe informal work. These are:

lack of a written contract of employment
no job security
poor or non-existent social protection (health insurance, pension, maternity provision, etc.)
denial of fundamental rights.

According to the ILO, the workforce in the informal economy includes own-account (self-employed) workers, contributing family workers, employees holding informal jobs in formal or informal enterprises, and workers in “unrecognized or unregulated employment relationships”. Within the many occupational groups, there are many different types of power relations, interests, and characteristics.

In recent years, there has been growing interest and concern in the rise of precariousemployment, particularly among trade unions in the Global North. IndustriALL (the global union federation representing workers in the mining, energy and manufacturing sectors) describes precarious employment as “casual, temporary, indirect, zero-hours contracts ... This type of work is increasingly being used to replace direct, permanent jobs, allowing employers to reduce or even abandon their responsibility to workers”. Precarious work is not necessarily informal. Informal work – arguably with some exceptions – is always precarious.

It is perhaps best to think of a spectrum of employment conditions and relationships.

At one end, there is what the ILO calls the ‘Standard Employment Relationship’, “a job that is continuous, full-time, with a direct relationship between employer and employee. This includes decent and productive employment, access to social protection, respect for the fundamental labour standards and strong dialogue between workers and employers as social partners”, together what the ILO defines as “decent work”. At the other end of the spectrum, we find the worst forms of informal employment: as described above. In between, there is a range of conditions of work that are to varying extents informal.

What workers in the union, region and industry are in informal/precarious employment?

What are their working and living conditions like?

Which groups of those workers and/or worker organisations is the union working with or interested in working with more?

All workers were originally in an informal economy, and trade unions were originally created by informal economy workers. The history of the trade union movement is driven by the struggle for democratic rights, good livelihoods, social protection, and secure employment – to formalise an informal situation. Many of the early unions in Europe were first established to provide basic social protection in the absence of any form of state support.

Like many other present-day unions, the origins of the GMB union in the UK can be traced to early friendly societies of informal economy workers:

“That this Society shall be called ‘The Friendly Boiler Makers’ Society’ and is instituted for the purpose of mutual relief in cases of sickness, old age and infirmities, and for the burial of their dead.”
(Friendly Boiler Makers Society, 1834, cited in Spooner et al. 2021)

In global terms, decent work has only ever been enjoyed by a small proportion of workers, in a limited number of countries, and only in recent years – essentially in the post-Second World War era – and mostly by white males.

Globalisation and neo-liberal policies have resulted in an expanding informal economy. In many countries, local industries have collapsed in the face of cheap imports, privatisation, and decimation of public services. The result has been widespread underemployment or unemployment. For those living in countries with little or no social protection, survival has depended on making a livelihood in whatever way possible in the informal economy – often through migration to major cities.

In Zambia, structural adjustment policies, which began to be implemented in the mid-1980s, sharply reduced the number of people employed in the formal sector. The opening up of the Zambian economy to international competition had a disastrous effect on local industries.

Many manufacturing companies were forced to close and employment in manufacturing fell by more than 30,000 in the 1990s. Tens of thousands of miners lost their jobs when the copper mines were privatised or closed. Public sector reforms lost further tens of thousands of jobs.

The unemployed workers and, more importantly, their wives and families had little choice other than to attempt to make a living in the markets and streets in whatever way they could. By 2004, 83 percent of all Zambian workers were in the informal economy. By 2015, according to ILO statistics, the figure had reached 88.7%.

With globalisation and neoliberalism, internationally the trade union movement experienced a steep decline in membership and power. The same new neo-liberal orthodoxy that encouraged privatisation, cuts in the public sector, removal of trade barriers, etc., led to a major shift in production from the trade union movement’s historical heartlands to low-wage countries, coupled with an ideological attack on trade unionism itself and a rise in informal, precarious, and unprotected employment. More recently, the emergence of digital technology, and the growth of ‘platform’ and ‘gig economies’ have exacerbated these trends.

Until relatively recently, perhaps the 1990s, attitudes in some sections of the labour movement towards the organisation of workers in informal economies were largely indifferent or even hostile. Some trade unionists feared that recognition of workers’ rights for informal workers – including migrant workers – could be used by employers and hostile governments to undermine labour standards for formal economy workers, established through a century of struggle. This thinking is at the heart of the divide that is now in the process of being overcome. Additional factors are discussed below.

Contrary to concerns that the recognition of rights for workers in the informal economy could undermine labour standards for formal economy workers, organising amongst informal economy workers can have the opposite effects. By setting minimum standards of workers’ rights, unions and worker associations help to prevent the “race to the bottom” of terms and conditions and protect the jobs of formal economy workers from being informalised.

Perhaps the most celebrated and well-documented organisation of workers in the informal economy, the Self-Employed Women’s Association (SEWA) in India, has been of central importance in challenging the idea that informal workers should not or cannot be organised within the trade union movement.

Since its launch in 1972, SEWA has become one of the world’s largest unions, claiming over two million members and recognised at the highest level of international trade union institutions, yet it had to struggle for years against considerable resistance and hostility from other actors in the (male-dominated) trade union movement.

SEWA was the inspiration and leadership behind much of the rethinking in the labour movement about the informal economy, and the subsequent recognition and development of organised informal labour – whether within the trade union movement, in other forms of workers’ association, or in hybrid forms of organisation.

What is the history of informal work in the union, region, and industry?

Were the unions in your sector or area created by workers in the informal or formal economies?

How has this impacted the unions?

How have relationships between workers in the formal and informal economy developed over time?

Race, ethnicity, nationality, caste, religion, age and migration status add other layers to the divide between workers in formal, precarious or informal work and their organisations. They need to be overcome.

Women and Gender Equality

The gender gap can both cause the divide and make it harder to cross it. Women are more often found in the most vulnerable and precarious sections of informal work.

Women in the informal economy are often overlooked or ignored. A conscious effort to identify the role of women in the informal workforce is required, particularly in male-dominated industries, to enable women to be visible and heard.

In some sectors where women make up the majority of workers, this fact is reflected in the leadership and policies of their organisations. Women may form organisations which include services and benefits such as microfinance, health services and childcare, while organisations formed in male-dominated sectors may focus more exclusively on improving wages andconditions through collective bargaining – seen as the traditional role of trade unions. Hence, they may be reluctant to cede power to male-dominated unions. Despite great efforts by female union activists, most unions continue to be controlled by men. Here, issues related to childcare or violence at work are often not equally represented on the union agenda or in collective bargaining. In some cases, male union leaders are apprehensive at the prospect of strong women entering their organisations.

“Trade unions are dominated by men. This is true of the leadership in the formal economy, but there is a female majority in some parts of the informal economy. In these collaborative informal/formal spaces, there is need for women caucuses to discuss these issues and identify strategies for women both informal/formal.”

“Informal workers’ organisations that have found it easiest to affiliate to trade union structures have been in the male-dominated sectors such as transport.”

Class Discrimination

Class divisions and discrimination exist within the workforce. There is a feeling gained from many discussions with trade unionists that some regard workers in the informal economy as not sufficiently respectable to be members of a trade union, let alone to be elected to trade union leadership.

People working on the streets, wearing rough clothes, using coarse language, in obvious poverty – these are not the people that some leaders wish to see in their union. Their poverty is regarded as eternal and external, not something that should or could be challenged through trade union organisation and representation.

“The attitude towards informal economy workers is that they avoid and don’t pay taxes. That is why many workers see them negatively because of this. But it is not their choice, and they are not that rich to pay very high and unaffordable taxes. Most of them are barely surviving”. (Abboud 2019, in Spooner et al. 2021).

Workers in the informal economies were regarded by the formal workforce as ‘not 100% workers’ who were avoiding paying taxes, were illiterate or uneducated and not worth organising. The informal dock workers themselves complained of being ill-treated and regarded as second-class citizens.” (Kuzu 2019, in Spooner et al. 2021)

Race, Ethnicity, Caste, Religion, Age and Migrant Status

In the early years of trade unionism in Europe and elsewhere, leaders frequently refused to organise un-skilled workers or non-white workers. If they were included in their unions, they feared they would dilute the identity of the workforce, reduce their bargaining power, and undermine trade union ‘respectability’ in the eyes of discriminatory employers, authorities, and workers.

Discrimination based on race or ethnicity means that those in marginalised communities also tend to take up informal jobs, with few other options for work. More workers are migrating internationally to find work, estimated at 164 million according to the ILO. Often undocumented, migrant workers cannot access decent work opportunities and end up in low-skilled, low-paid informal jobs with little in the way of protection. They are often isolated from wider society, unable to access the legal and social protection available to other workers and facing discriminatory treatment. Being so vulnerable, informal migrant workers may not trust union organisers or traditional union structures.

The Tool Box contains additional resources on Discrimination, Anti-Racism and Decolonisation, Young Workers and Women and Gender Equality.

Voice of Domestic Workers in the UK, an organisation largely organised by and consisting of migrant domestic workers, is supported by a national union, Unite the Union. Many of the migrant domestic workers are now union members.

“In the 1990s, there were already a number of organisations providing support to migrant domestic workers. There was an organisation of undocumented domestic workers ... they wanted to link up with the organised workforce because they wanted to be recognised as workers ... We provide them with a place for emergency meetings ... support with publications and fringe meetings with politicians and ensuring the case is put for regaining their rights ... but we have to recognise that domestic workers will lead the way.” (Holland 2019, in Spooner et al. 2021)

In some countries, restrictions exist on the rights of migrants to form and register a trade union. Where unions of migrant domestic workers are not formally recognised as unions, domestic workers have formed associations. Despite a different label, these organisations have structures similar to that of a trade union (Tang 2019, in Spooner et al. 2021).

How does gender, class, race, ethnicity, caste, religion, age, and migrant status intersect with informal economy workers in the union, region or sector?

What steps can the union/worker organisation take to address structural discrimination?

Overcoming the divide by working together can increase the power resources for workers in both formal and informal economies. By drawing on their differing sources of power – structural, associational, institutional, and societal – workers can combine their power resources and strengthen them.

The structuralpower of workers comes from their capacity to withhold labour. Many workers in the informal economy have considerable structural power with the ability to cause major disruption in towns and cities – particularly street vendors, market traders, waste collectors and recyclers and transport workers. Informal workers can and frequently do take industrial action and withdraw their labour, but not against employers, but rather against government and other public bodies that influence or control their day-to-day livelihoods and working conditions.

There are, of course, many workers in the informal economy who have considerably less obvious structural power, such as domestic workers and home-based workers. Even so, they have been able to use structural power after they have been able to organise.

In the town of Petrich and surrounding villages in Bulgaria, the association of women home-based workers held successful strikes over pay after patient and sustained door-to-door organising.

Out-sourced home-based workers hand-stitching shoes for Italian companies managed to resist attempts by company agents to undercut the rates by organising collectively.

Associational power is derived from the collective action of workers, the will and capacity of a group of workers or, better, an organisation of workers with membership that can be mobilised to confront capital or the state.

Increasing informalisation of work means that traditional forms of trade union organisation are falling short. Just as mass industrial production led to the shift from craft unions to industrial unions in the nineteenth century, so the shift towards an expanded informal economy and precarious work requires workers to find new organisational forms.

Workers in informal economies are organised in many ways and have developed considerable associational power – through associations or other organisations with large membership. In some sectors and countries, unions are in a small minority of the organisations of informal economy workers. Waste-recyclers in Latin America are mostly organised in cooperatives, and among home-based workers in Asia, most organisations are NGOs at various stages of becoming democratic workers’ associations. The nature of the informal economy leads to new forms of worker organisation, not least in cases where workers have been rejected by the formal trade union movement.

“In recent years trade unions have lost membership – it has dropped dramatically. But what the unions don’t note is that unemployment causes many workers to go into the informal economy. It is of huge potential for trade unions. They can rebuild their power from this workers’ power”. (Abboud 2019, in Spooner et al. 2021)

Workers’ associational power in the informal economy can help to renew the trade union movement. Informal economy workers have long been organising in unions, associations, cooperatives and so on. They have provided services and have become relevant to workers, something that established unions can learn from. In some countries, the membership of informal workers' organisations is greater than the membership of trade unions.

By expanding membership scope and collective bargaining coverage and building links with workers in the informal economy and their organisations, trade unions can strengthen the collective voice of workers and increase other power resources in the process. Associational power also relies on material resources. The nature of the informal economy means that workers are often extremely poor. However, trade unions often have significant financial and material resources which can fill in this gap.

In the early 2000s in Uganda, the Amalgamated Transport and General Workers Union (ATGWU) was experiencing widespread membership decline due to the collapse of state-owned passenger road transport and the informalisation of the transport sector. By 2006, the union had a combined membership of only 2,000. The union changed its strategy and built links with and organised informal economy associations in the transport industry. It now has 100,000 members and has had a major impact on the perception of informal transport workers within the global union federation for transport workers, the ITF.

In Tanzania, the Tanzania Union of Industrial and Commercial Workers (TUICO) has long been organising market vendors, but was initially resistant to organising street vendors.

However, after huge membership losses, the union recognised the need to extend the scope of their organising strategy and began organising street vendors and working with the street vender association VIBINDO.

“There was recognition on both sides that the other party had something they didn’t have. This created a level playing field between both sides. VIBINDO is doing this because they recognise their lack of capacity for negotiating with government. TUICO recognises VIBINDO has this big organic membership ... TUICO in Tanzania is not yet majority informal, but it is moving towards this.” (Horn 2019, in Spooner et al. 2021)

Institutional power is usually the result of struggle and compromise coming from social dialogue, policy negotiation or collective bargaining, resulting in the creation of institutions and legislation.

The institutional power of informal economy workers is in many instances weak. They are often not covered by labour law or formally recognised by the state as legitimate workers. Hence, the workers’ and their organisations’ status is often precarious, and they are often excluded from tripartite negotiations or policy-making processes.

Many unions (and the national centres to which they affiliate) retain some institutional power, often developed in the post-Second World War era, when inclusion of unions in tripartite processes was strongly encouraged by governments and inter-governmental institutions in some countries.Union leaders may have the ability to meet government ministers, gain media attention, participate in national and international tripartite conferences with governments and employers, and in national and international trade union events. They may know how to work the legal system, offer legal assistance, and protect workers in courts. Where regulatory frameworks are limited/do not cover workers, trade unions may have the power to try and modify them.

Unions of formal workers can also use this position to help to promote decent jobs and the formalisation of informal work, to help raise standards and provide social protection. They may draw on lobbying and political skills or their access to international institutions and processes (such as the ILO, which has developed international standards and guidance on subjects such as transitioning from the informal to the formal economy, social policy or violence at work) and use these to set new standards.

Societal powercomes from building support for workers' actions and mobilising communities through social networks. Trade unions can draw on their global networks in the labour movement for support. Many organisations of workers in the informal economies have significant societal power. They have been able to organise around issues wider than the workplace, including struggles for human rights and social justice, particularly in the Global South.

The Tool Box contains additional materials on power resources, including an Introduction to Power Resources and materials on Analysing Power Resources.

Despite all the potential causes for division between workers in the formal and informal economy, and between their respective organisations, there is now an increasing understanding about the necessity to work together and to ‘cross the divide’. This understanding can be attributed to a generally deteriorating situation of many workers in both formal and informal employment and the realisation of respective existing power resources that need to be combined to build power.

It cannot be assumed that trade unionists who want to build a bridge know how to construct it, may actually arrive at the right place and will be welcomed with open arms when they reach the other side of the bridge.

There are conflicting interests, traditions and organisational modes between trade unions and informal economy workers ́ organisations. In some situations, workers may be very wary, if not potentially hostile. They may have had bad experience of them in the past; they may know them to be undemocratic or dominated by party politics; they may know them to be male-dominated, etc. It is essential to recognise that this may be based on good reasons, sometimes requiring the union to take a long hard look at itself.

Nevertheless, it is crucial that trade unions engage in building bridges. We offer some critical steps towards what we see a successful building, crossing and cooperating on the (other side of) the bridge.

“It’s really not that difficult to cross the divide – its less of a chasm than one might think!” (Barrett 2019,in Spooner et al. 2021)

“In the context of the global capitalist economy, informal and formal workers are confronted by exploitative systemic conditions. Trade unions need to move beyond the old conversation about ‘organising informal workers’ and recognise the organisations of workers in the informal economy in cases where they are already organised! Instead, all workers should unite against the common systemic problems of an inherently exploitative system”. (Pillay 2019, in Spooner et al. 2021)

For trade unions, it is important to understand the economy specific to the group of workers in mind. This requires listening to the workers themselves and sustained participatory action research. Participatory action research will help you create worker research teams to do one-to-one, in-person surveys of workers in informal and formal work and analyse the results.

The FES Tool Box contains additional resources on Participatory Action Research.

Participatory action research is critical to the development of organisation and representation of all workers. With participatory action research, workers’ organisations and unions have democratic oversight from the outset, workers are centrally involved in the formulation of research questions, directly involved in surveys and other field research activities, and have ownership over the conclusions. This is partly out of democratic principle, but also because of recognition that the workers themselves are the most important source of information and knowledge of their own industry. There is a growing community of academic scholars and research organisations – such as Women in Informal Employment Globalising and Organising (WIEGO) - sympathetic to the trade union movement, who may be willing to work alongside unions in researching informal economies. https://www.wiego.org/about-us/what-we-do

In the informal economy, workplaces are scattered and individualised – it may be the home, the employers’ home, the street, the road, or a dump. Other workplaces are mobile, seasonal, or insecure. To the untrained eye, informal workplaces such as markets, bus terminals and waste dumps can appear to be completely chaotic, but generally they are highly organised with multiple intersecting economies, complex organic systems of informal transactions, hierarchies, governance, and employment relationships.

The informal economy frequently involves an intricate web of employment and power relationships. These are very rarely bound by a formal contract, but many workers have some form of employer, whether market stallholder, vehicle-owner, waste-dealer, outsourcing agent or sub-contractor. This is essential to understand, as these employment relationships are fundamental to livelihoods, may form the basis of collective bargaining, and are often also part of the self-organisation of informal economy workers.

It is important to understand the detail of livelihoods. Making a living in the informal economy in a specific industry can be complex. The amount of money a worker can take home to her or his family is the result of daily transactions with informal (and formal) employers, customers, suppliers, formal or informal taxation, casual employees, officials demanding bribes, criminal gangs and other essential expenses. It is sometimes difficult to get a full picture, as workers may be reluctant to reveal the detail of their own micro-economy, which is essential to build sufficient trust and confidence, and may take time and patience, with the research being led by workers themselves.

Workers in the informal economy may struggle to be recognised as workers. Street vendors or waste-pickers may be labelled as business people/entrepreneurs, domestic workers and home-based workers, but are too often seen as simply ‘doing what women do’, playing into gender stereotypes. Sometimes informal workers do not even recognise themselves as workers. In many cases the lines may be blurred, with unpaid family members working.

Clearly, most informal economy workers do not have an identifiable employer, or they are in some form of disguised employment relationship. A matatu (minibus) driver in Kenya, for example, is not a formal employee of the matatu owner and may even regard himself (and it is almost certainly a ‘him’) as self-employed, but is clearly dependant on the vehicle owner for his livelihood, conditions at work and security of employment. Similarly, a waste recycler in India may be technically self-employed (or operating as part of a collective), but is dependent on the wholesale recycled materials dealer to set prices and determine livelihoods. In the new digital ride-hailing industries (Uber, Taxify, etc.), the employers refuse to accept responsibility for their ‘employees’, hiding behind the fiction that they are only providing the app, and that the riders and drivers are all self-employed.

Matatus are the main form of transportation in Nairobi, they are vans or minibuses that pick-up passengers throughout the city. The city is proposing to build a Bus Rapid Transit System to ease congestion and reduce air pollution. The change has the potential to create formal jobs, but will result in massive job loss in the informal matatu industry sector. The bus transport unions are demanding a just transition. The transport unions organized surveys and interviews of matatu industry workers using the Participatory Action Research approach. They identified forty-two different occupations, some of which were entirely unknown to the world of formal employment. The following are excerpts of the research questions:

Workplace (Where do you work?)

☐ On board (drivers, conductors, etc.)
☐ Off-road service area (mechanics, tyre menders etc.)
☐ Stage / Bus stop
☐ Along the route (in case of traffic hawkers)
☐ Other (Name it)_________

Do you have a written agreement with someone who pays you to do your job?

☐ Yes _______________
☐ No _______________

How many hours do you normally do this job each day? Each week?

Do you work irregular/unpredictable hours?

Whom do you receive money from in this particular job? (if self-employed, who are your customers?)

Whom do you in turn pay within your work set up

How much money do you receive in total, before paying other people of other expenses?

Out of the total money you make out of your business/job, how much do you use for the following purposes:

☐ Fuel for vehicles
☐ Maintenance of vehicles or machines you use
☐ Fines/bribes for example to olice or “kanjo”
☐ Taxes (payment to example Kenya Revenue authority/filling of returns)
☐ Licenses for businesses
☐ Insurance for businesses
☐ Suppliers (those who provide you with goods/services you need for your business to run)
☐ Owners target (in case of matatu owners or business owners)
☐ Other workers helping you in the business
☐ Loan repayment for money taken to run the business
☐ Other_______

What are the problems you face at work?

How would the introduction of the Bus Rapid Transit system affect your work?

Do you have confidence in the government to introduce the Bus Rapid Transit system?

The complete survey and additional focus group questions are available as part of a labour impact assessment report commissioned by the transport unions.

https://issuu.com/itf_rpc/docs/brt_labour_impact_assessment_report_2019

Discussing the following questions will help you understand the daily life of the workers and how the informal work and workers are organised. Identify informal workers who can assist you in the discussion and/or visit the place of work and speak to workers there.

How does the industry actually work on the ground?
How does the informal micro-economy function in practice?
What constitutes a workplace’?
What are the occupations? Who is a worker?
What do workers do to earn a living?
Is there unpaid work being done by family members or others?
What are the employment relationships?
What are the gender relationships and how do these impact the workforce?
What are the race, ethnic, religion, caste, migrant, and/or age relationships and how do these impact the workforce?
What forms of organisations of the workers already exist (both formally and informally)?
What problems do workers face?
Who are the bargaining counterparts needed to address these problems?
What is the political economy of the industry or sector?

Once you have a basic understanding of and connection with informal workers, review the Tool Box materials on Participatory Action Research if you have not already done so.

Preparation

How will you recruit informal economy workers to form research groups?
What information do you need to help you decide which workers you will survey?
What problems might you run into in terms of accessing the workers in the informal economy? What can be done to overcome these problems?
What support and information might be needed to create the survey? Will you be able to adjust the survey questions as you gather information?
Are any additional resources needed for the worker interviews?

Field Work

How can you best ensure that the workers you will be interviewing are comfortable?
How will you introduce yourselves, explain what you are doing and request the interview?

Analysis

How will you analyse your data? What problems might you expect and how will these be overcome?
What actions need to be taken as a result of the information you have gathered and analysed?
How might you continue using participatory action research later as your work with workers develops?
If applicable, plan how you will do Participatory Action Research with workers in formal sector jobs.
Will you have joint or separate research teams for interviewing workers in the formal and informal economy?
How will you include workers from both the formal and informal economy in the analysis and use of the data?

The divide between workers in formal and informal economies is often exacerbated by the framework of labour and employment law. Many workers are not recognised under labour law as workers with the same rights as those in the formal economy, despite ILO statements and recommendations to the contrary.

In some countries labour laws forbid workers from joining unions. Migrant workers are especially excluded, for example, almost all of the migrant domestic workers’ organisations are not legally recognised due to government policies.

It is essential that unions check their labour laws and analyse whether these may present obstacles to organising among workers in the informal economy. If so, it may be necessary for unions to demand legal reform or new interpretation of the laws.

Labour law is one factor that influence the form organisations in the informal economy take. Other factors are employment and social relationships in the specific sector, national laws and policies which may include or exclude the rights of workers to organise, the attitudes and policies of the trade union movement, gender relations within the group of workers, and interventions by NGOs, politicians and political parties, development agencies, faith organisations, etc.

As an effect, there is a wide variety of workers’ organisations in the informal economy, including trade unions, cooperatives, voluntary associations, self-help groups and other completely informal and unregistered associations, with many hybrid variants and transitional arrangements between one form and another. Some are sophisticated, sustainable, and highly effective. They are not necessarily democratic. There are also criminal gangs and cartels, as well as organisations controlled by NGOs, politicians, or business interests.

“In Belarus there are many membership-based organisations of market vendors, but the government will not recognise them as workers or unions because they don’t have regular arrangements. They are not legally allowed to be registered as a union. This means that they have to register as associations instead. Once they are registered as an association, trade unions stop seeing them as potential trade union members.” (Abboud 2019, in Spooner et al. 2021)

One important aspect that influences type and purpose of organisation is the identity of workers. Fundamentally, unions are based on their common understanding that the world can be understood to be divided between capital and workers, and that workers have to organise collectively to improve their livelihoods.

Workers in informal economies, especially those that are self-employed, may believe themselves to be entrepreneurs or small businesses rather than workers. A market stallholder, for example, may informally employ assistants, a taxi driver may own two or three taxis, a waste-recycling dealer may informally employ waste-collectors. In small enterprises, class boundaries may be blurred, with owners working alongside workers and family-like relationships playing a major role. Furthermore, in the digital or platform economy, battles are wages about the classification and identity of workers as independent freelancers or employees. Not all workers see the world in binary terms with workers and bosses/capital – and in effect reject a class analysis of society.

These divergences need to be taken into account to understand the identity and purposes of workers' organisations. The blurring of class interests can be replicated within informal workers’ organisations and unions. In the informal transport industry, for example, the Kampala Operational Taxi Stages Association (KOTSA), jeepney workers in the Philippines (PISTON) and other unions and associations include informally employed drivers, owner-drivers and small fleet-owners in their membership and leadership.

While there is a clear structural antagonism between owner and worker over livelihoods and working conditions, they are likely to have more in common than what divides them, not least the need for solidarity in the industry against attempts by the state to remove informal transport from the streets.

The complexity of class identity and class consciousness in the informal economy encourages suspicion among some trade unionists that the inclusion of informal economy workers leads to the weakening of trade unionism as a working-class movement and a threat to livelihoods. At the same time, many workers believe that trade unions are there to protect the interests of a privileged few with better jobs and more security. When the objective is to cross the divide, an understanding of identities, status and interests of workers is essential before a joint definition of purpose and objectives can be undertaken.

“We’ve had cases in which trade unions are reluctant to support a minimum wage for domestic workers because this will negatively affect their members who themselves employ domestic workers and will have to personally pay more for their labour. And this isn’t just a question of middle-class workers employing domestic workers, this can be working class people earning a minimum wage.” (Tang, 2019 in Spooner et al. 2021).

“In Indonesia, the formal trade union factory worker members have opposed the minimum wage for domestic workers because their members, who work on minimum wage, employ domestic workers to allow them to work the overtime hours necessary for them to survive (because wages are so low). They are reliant on domestic workers and raising the minimum wage for domestic workers in this context seems to them untenable. It is a vicious circle.” (Parra 2019, in Spooner et al. 2021).

In the South Korean construction industry, the initiative to organise among workers in the informal economy came from the trade union movement itself. The IMF crisis in 1997 led to a major restructuring of industrial relations – and a shift from direct formal employment to ‘independent’ contractors, false self-employment and disguised employment.

This led to the creation of the Korean Federation of Construction Industry Trade Unions (KFCITU), which organised from site to site to establish sector-wide agreements based on trade or occupation. This was ground-breaking, as Korean labour law had excluded the self-employed from its definition of workers. (Lee 2019, in Spooner et al. 2021)

“In Mexico, the trade union does not want waste-pickers to be organised because their members are the drivers of the rubbish trucks where the pickers work for free (i.e. cash in hand) while drivers are public employees. So, the organisation of waste-pickers is seen as a threat to income”. (Parra 2019, in Spooner et al. 2021)

Do workers in the informal economy define themselves as workers?

In your sector, region or country are workers in the informal economies legally defined as workers? What impact does it have on their organising and organisational form?

What can you do to improve any laws and governmental policies that affect workers in the informal economy status as workers?

Does the union/worker organisation define workers in the informal economy as workers?

What can you do to improve any of the unions’ practices and policies that affect workers status in the informal economy as workers?

What is the common ground, how can a common purpose be defined?

An absence of formal employment relationships does not exclude the many people and institutions who have a direct impact on workers’ livelihoods, even among the self-employed.

It is important to identify who are the bargaining counterpartswith whom workers must negotiate to improve livelihoods, solve major issues and secure rights. These may be employers, suppliers or, more likely, the public authorities responsible for economic and industrial policy, informal workplaces, regulations or local by-laws, law enforcement and urban planning and development.

Listed below are some examples of rights and benefits that workers in the informal economy have collectively bargained for:

protection from eviction or removal from the place where workers perform work
protection from harassment by authorities
protection from exploitation by middlepersons and authorities
social benefits and protection coverage
legal recognition as “workers” with certain rights
legal recognition of the worker organisations and unions,
right to negotiate collectively with authorities through the creation of “bargaining forums”
right to participate in municipal and city governance insofar as this affects the conduct of their work and livelihood.

The workers' association or union may need to pressure the decision-maker to agree to meet and bargain. For each problem that workers need to resolve, the decision-maker may be different, requiring the union to pressure a number of different local authorities or businesses.

A campaign to win new laws and policies that protect the right to collectively bargain and the responsibility of decision-makers to meet and negotiate with worker representatives may be needed.

The creation of bargaining processes and forums is particularly important, as it allows for the participation of informal economy workers in the formulation and enforcement of regulations that affect their work and livelihood and improves the overall governance of the city or municipality. Bargaining processes not only facilitate the collective representation of workers, but promote social dialogue as well.

To pressure public authorities to negotiate, workers in the informal economy and their organisations often engage in various forms of collective action such as holding protest actions (such as demonstrations, rallies, marches, boycotts and strikes), pursuing litigation and legal action, making petitions, mounting campaigns and building community ties and alliances with local residents.

“[With organising independent drivers ...], all the strategies that emerged were built around an overarching framework to build collective power to produce the capacity to bargain with somebody. To address this, we took the industry approach. Representing independent contractors, we chose to fight the battle with the state. We put the government in the middle and it became a battle for regulation. We managed to achieve something akin to collective bargaining with the City Council for independent drivers.” (Mathew, 2019 in Spooner et al. 2021)

For many economy workers in the informal economy, the main collective bargaining counterparts are not employers, but national or local governments or agencies of the state. This is true for transport workers, street vendors, market traders and others. Home-based workers may demand better housing from local or national governments to improve their working conditions, or domestic workers might demand legal protection from exploitative employers and agents.

The Kampala Metropolitan Boda-Boda Entrepreneurs (KAMBE) is affiliated to the Amalgamated Transport and General Workers Union (ATGWU) in Uganda. For most boda-boda (motorcycle taxi) riders in Kampala, the main issues affecting their livelihoods include police corruption and harassment, crime, access to affordable loans, and lack of effective traffic regulation and road maintenance. The association’smain collective bargaining counterparts are therefore the police, the banks and lending institutions, and city government agencies.

Although many trade unions negotiate with state authorities, their structures, procedures, culture, and finances are usually built around recognition and formal collective agreements with employers. This also forms the basis of trade union and labour laws by the state, often inherited and often barely amended from labour laws imposed by former colonial powers.

Lobbying and negotiations with authorities, combined with research, mass rallies and demonstrations, staged by Kagad Kach Patra Kashtakari Panchayat (KKPKP), a trade union of waste-pickers (mostly women) in Pune, India. The campaigning and organising won them municipal recognition in the mid-1990s, along with official authorisation to collect waste and the provision of identity cards.

KKPKP were also able to persuade the authorities to provide waste-pickers with a special medical insurance system. KKPKP later established a cooperative, called SWACH, comprised of over 1,500 members (75% women), to fight privatisation, which threatens their livelihood. Consequently, they won the contracts to do door-to-door waste collection for 200,000 households.

P. Chikarmane, L. Narayan, Organising the Unorganised. A Case Study of the Kagad Kach Patra Kashtakari Panchayat (Trade Union of Waste-pickers. In Bonner, C. 2012. Collective Action for Informal Workers. Organising in the Informal Economy Resource Book for Organisers Number 6, StreetNet International and WIEGO)

In 2011 in Minas Gerais, Brazil, waste-pickers bargained the Recycling Bonus Law. This law established a monetary incentive to be paid by the state government to waste-pickers who are members of a cooperative or workers’ association. It is the first law in the country that authorises the use of public money for ongoing payments for work done by waste-pickers.

The main issue in the debate was the nature of the recognition to be given to waste-pickers as providers of a service to the state. There were two contrasting positions. The one favoured by the waste-pickers’ representatives and their organisation called for mandatory permanent contracts between local governments and waste-pickers’ associations. The second view, favoured by government, accepted that waste-pickers must receive payment for their work. However, they argued that since the waste-pickers already received payment in their commercial transactions, government should provide only an additional incentive or bonus. This second interpretation prevailed in the negotiations.

https://www.wiego.org/sites/default/files/publications/files/Budlender-Informal-Workers-Collective-Bargaining-WIEGO-OB9.pdf

Who are the bargaining counterparts with whom informal workers must negotiate to improve livelihoods, solve major issues and secure rights?

Does the union/workers association have relationships (negative or positive) with any of these bargaining counterparts?

Is there any history of bargaining over issues important to informal workers?

Do you need to develop a bargaining framework for the parties that includes a written enforceable dispute resolution mechanism?

Are there any existing collective bargaining agreements or negotiated agreements that could help provide a template for the bargaining?

Plan how you will learn more about the bargaining counterparts you have identified.

Review relevant sections of the Tool Box materials on Collective Bargaining and Campaigning and Organising.

In the absence of adequate social protection and enterprise development services from the state, many workers’ organisations in the informal economy provide mutual support in housing, savings and credit schemes, social protection funds, health services, childcare, support for micro-business development, micro-finance, protection of members from criminal gangs or corrupt law enforcement, and other services.

The Self-Employed Women’s Association (SEWA)is a trade union, registered with the state and recognised by the international trade union movement. As a union, it organises and represents both rural and urban informal women workers in dozens of occupations and undertakes collective bargaining for improved livelihoods and working conditions.

It also performs many functions that are not normally found within a present-day trade union, such as cooperative development, (including cooperatives for banking, savings and credit, childcare, agricultural products, and many others), and the provision of social protection through forms of cooperative insurance, covering funeral costs, maternity, sickness and ‘calamities’, such as floods, riots and accidents.

Unions of formal workers may have to review the services and benefits it offers to members and change how they might be delivered. They can develop inclusive services and benefits to appeal to workers in the informal economy. For example, they might provide legal assistance, information, helping obtain residence, work permits/visas, support in appeals to labour courts, or lobbying for particular laws.

Some unions see it as unsustainable to expect workers’ organisations to assume this role, and simply do not have the capacity or willingness to provide such services. Many think that this should be the role of government, through taxation, not unions.

Unions who do not have the willingness or capacity to provide services could embrace and support the association’s capacity to do so within the union.

“We had to recognise that what domestic workers wanted from the union would not necessarily be all the usual union things. They wanted a membership card – this was the only piece of identification that they had because their employers often took away their passports. The membership card was a recognition that they were workers and a loud voice in the political sphere.

We had to be flexible as a union and recognise that things do not fit neatly. From the union side, we had to recognise that some domestic workers had to put down their organisations ́ address rather than their personal address, because of their vulnerability.

We wouldn’t normally have accepted this.

We had to decide where they belonged in the union and how they could have a discrete identity in a union branch. We created a separate section for them with a separate allowance and a level of autonomy”. (Holland, 2019 in Spooner et al. 2021)

What services or benefits are provided by the union/ worker organisation?

Do any of these need improvement? If so, how would you go about this?

What additional services and benefits are most important to informal workers?

What steps can informal workers take to organise for these services and benefits?

Even though formal workers' unions are perhaps sympathetic to the principle of inclusion of informal economy workers in the union movement, some have believed that it was impossible to build financially sustainable trade unions of workers from informal economies.

It was argued that the extremes of poverty found in the informal economy make it impossible for workers to pay enough union dues to make the organisation financially viable without external assistance – from workers in the formal economy, NGOs or from donor organisations.

However, many associations of informal workers have developed the means to collect dues directly from their members and have evolved innovative ways of managing and accounting for their income which can be incorporated into trade union systems.

Some unions only receive dues through the ‘dues check-off’ method, and do not yet have the experience or capacity to collect, manage and account for dues individually from members, either in cash or through bank transfers. Dues check-off is an arrangement whereby formal worker unions reach agreement with an employer to regularly deduct union dues directly from workers’ wages that are then passed on to the union.

Many unions of formal workers may have to fundamentally rethink union duesand how they are collected. It may mean the introduction of a sliding scale of dues, dependant on the ability to pay, which could be resented by some workers paying a higher rate, but receiving the same (or greater) level of service and attention.

There are important possibilities of practical support that can make a major difference in financial sustainability: training and technical assistance in building systems of membership administration, for example, or exploring the use of mobile phone technology to improve membership fee collection.

Associations and unions of workers in the informal economy (and many formal economy-based unions) are obviously very often financially fragile and precarious, and many seek direct financial support for their core infrastructure and operations. It is stating the obvious to reinforce the principle that insensitive or inappropriate external financial support can destroy democratic organisation.

However, despite arguments to the contrary, many organisations of even the poorest of workers have proven that they can be sustainable through regular micro-financial contributions from its members. The real underlying problems are more likely to be political and organisational, rather than financial.

Worker associations and unions need a sustainable strategy that provides long-term positive results. Support should not be a one-off and must avoid dependency and instead focus on building up institutions and actors.

“Unions are understandably having to concentrate on where they can get immediate results such as in organising in formal enterprises, gaining bargaining recognition where check-off dues payments are possible, especially when organisers are under pressure from the leadership to expand membership. New demands to organise among informal workers can appear very daunting in these circumstances, requiring dedicated resources.” (Barrett, 2019 in Spooner et al. 2021).

In the General Federation of Nepalese Trade Unions (GEFONT) formal and informal economy workers pay the same level of dues, and representation is equal and fair to all affiliated unions in both the formal and informal economy.

“There was a case in Zimbabwe where the Zimbabwe Congress of Trade Unions (ZCTU) formed the Zimbabwe Chamber of Informal Economy Associations. They decided that they would be associate members, not full members. From this there was an active discussion about membership fees. As informal economy workers are not regulated, the ZCTU did not know how to deduct or collect membership fees. There is also a problem because informal economy associations often want to be able to pay a reduced percentage of the membership fee. This is often not well accepted and leads to other challenges” (Abboud, 2019 in Spooner et al. 2021).

How are membership dues structured and collected?

How can this system be improved?

Do formal and informal workers have the same level of dues and representation within the union/worker organisation? If not, how might this be addressed or resolved?

Are there practical supports that can make a difference in long-term financial stability such as training and technical assistance, meeting and office space, or technologies such as mobile phone membership fee collection systems?

What are the political and organisational barriers to long-term financial stability of informal workers organisations/unions? What steps can be taken to overcome these barriers?

Unions may also need to overcome internal prejudices as to the threats and benefits of the inclusion of workers from the informal economy in formal trade union organisations. It can be disastrous for union leaders to embark on the path towards ‘crossing the divide’ if the membership is not behind them. The union leadership must organise the support of their membership in exploring cooperation with informal economy workers. There are few short-cuts.

Workers’ organisations in the informal economy may need an opportunity to learn about trade unions – what are their objectives and principles? How and why are they (or should be!) democratically accountable? Are they relevant to the needs of workers in the informal economy? What could they gain or lose by affiliating or allying with the trade union movement? It would be wrong to assume that economy workers have any knowledge or understanding of trade unionism. They may feel that unions are exclusively there to protect the interests of already (relatively) privileged workers.

Education that includes workers in both the formal and informal economies needs to be two-way, with both sides of the divide learning and appreciating one another’s issues and organisations. Dialogue and education can help to bridge potential ideological differences. This can be done either through educational events that bring together formal and informal economy workers (seminars, conferences, workshops, etc.), or through a less formal process of discussion and exposure.

An educational format can allow for sharing and learning from each other in an open process outside of formal decision-making and hierarchies. The setting, framing and methodology of such workers’ education activities are important. It is crucial that workers (both formal and informal) are comfortable, confident, and involved. The all too familiar standards of four-star hotels, big lunches, and over-generous expenses or ‘allowances’ are entirely counter-productive. Grand openings with speeches from government ministers and general secretaries are more likely to lead to passivity rather than real engagement.

“There is potential to fund more dialogue space with informal and formal workers to identify common problems. This doesn’t necessarily mean that they all come together in one organisation, it can potentially just mean building alliances, for example on social protection. There are issues that can bring everyone together”. (Alfers 2019, in Spooner et al. 2021)

“Tensions can be reduced or overcome through dialogue and listening. Education and exposure programmes can be developed for formal work unions, including miniature surveys / mapping exercises of informal workers, taking union leaders to informal workplaces.” (Bonner 2019, in Spooner et al. 2021)

In Togo, a Danish-funded trade union project was established to facilitate bridge-building between trade unions and informal associations. (Alfers 2019, in Spooner et al. 2021)

The discussion questions below are useful with a group of both formal and informal workers that is ready to work together. The exercise provides an opportunity for formal workers to take the position of informal economy workers and vice versa, in a discussion about the challenges and opportunities they are facing together.

Be as specific as possible when you list the advantages and disadvantages.

List all of the advantages for the union of involving workers from the informal economy in the union.

Example: larger mobilisations/demonstrations

List all of the disadvantages for the union of involving workers from the informal economy in the union

Example: travel costs for additional elected representatives

List all of the advantages for informal economy workers of involving informal economy workers in the union. Example: access to legal assistance

List all of the disadvantages for informal economy workers of involving informal economy workers in the union. Example: increase in meeting times

Based on the discussion, identify three actions that can be taken to benefit informal and/or formal workers.

What topics for educational sessions will be helpful for informal economy workers? Formal economy workers? Both?

How will the educational sessions be organised (content and materials, dates, times, places, facilitation)?

How will you work with informal and/or formal economy workers in the creation, content, planning, and delivery of materials?

In the 1990s, there was a major shift in thinking in the labour movement about the informal economy and recognition for organisations representing workers in the informal economy. Much of this was focused on policy development, discussion, and conferences of the International Labour Organisation (ILO). Organisations representing workers from the informal economy, led by women, argued for the rights and livelihoods of informal economy workers, and developed alliances with sympathetic unions and union federations.

There were some major victories, notably the ILO's adoption of the Homework Convention (C177) in 1996, the Domestic Workers Convention (C189) in 2011 and the adoption of a Resolution Concerning Decent Work and the Informal Economy in 2002 (International Labour Organization, 2002). This resolution was the formal outcome of a formal ILO tripartite discussion and marked an important turning point for the international trade union movement.

In 2015, Recommendation No. 204 concerning the Transition from the Informal to the Formal Economy was adopted by the ILO. Recommendation 204 restated that informal economy workers have the same fundamental rights as workers in the formal economy, covered by ILO Conventions, but went further with important recommendations to governments.

ILO Recommendations are of course purely advisory, and their impact on government policies and programmes may be marginal at best, but they do provide an important reference point for unions and associations when negotiating or bargaining with governments in support of informal economy workers.

“The union in Tajikistan, after the ratification of Convention 177 and following ILO Recommendation 204, immediately amended the Labour Code to include home and domestic workers. The union’s leadership is also working hard to adopt a law for self-employed domestic workers”. (Zlateva 2019, in Spooner et al. 2021)

Discussions at International Labour Conferences provide an important platform for informal economy workers to engage in policy debates and build alliances with the international trade union movement and the workers’ group in the ILO.

Advocacy is needed not only at the international level, but with all institutions that influence the livelihoods, working conditions and respect for rights of workers in the informal economy, including employers’ organisations, national and local government, law-enforcement agencies, social-protection agencies, planning authorities, development agencies, financial institutions, and others.

This advocacy work can include the establishment and formalisation of collective bargaining platforms between workers and institutions, inclusion of workers from the informal economy in tripartite structures, and providing the institutions themselves with awareness-development, training, and information. Unions and worker organisations can advocate worker engagement with media organisations. Many groups of workers from the informal economy are badly misrepresented in the media, which frequently portrays them as criminal, feckless, dangerous, and uncivilised.

It is important to encourage alliances within broader civil society. Many of the issues faced by workers in the informal economy are shared with a range of NGO’s and community organisations advocating reform and action on the environment, denial of women’s rights, corruption, housing, welfare reform and other key issues.

What are some key issues that are important to workers in the informal economy that could benefit from advocacy work?

What steps can you take to advocate for workers in the informal economy with

International organisations and governments?
National organisations and governments?
Local organisations and governments
Employer organisations?
Law enforcement agencies
Social protection agencies
Planning authorities
Development agencies
Financial institutions
…

What research do you need to prepare?

What allies and media organisations will you involve?

Can you assist with financial support for informal economy workers’ representatives to participate in national and international forums?

As WIEGO has pointed out in the context of the ILO debates on domestic workers’ rights, there can be much ‘finger-pointing’ between unions and organisations of workers from the informal economy on who are the most undemocratic, which can be a major obstacle in crossing the divide.

Many unions are indeed slow, bureaucratic, organisationally and administratively weak, and vulnerable to corruption. It may be tempting for some to think that this is a purely trade union phenomenon, but it is also true for many workers’ organisations in the informal economy. At the same time, trade unionists may point to the undemocratic nature of many informal organisations, but there are also many such organisations which have stronger and more transparent systems of democratic oversight than much of the trade union movement.

Many unions have close relationships with political parties. Indeed, some would-be politicians become union leaders in the expectation that this will improve their electoral chances. Workers in the informal economy (and some formal economy workers) may believe that the unions are too close to government or too close to opposition parties, which could get them into trouble with the government. Conversely, there are many leaders of workers’ organisation in the informal economy that are deeply compromised with politicians who recognise, and are willing to pay for, the potential power of their mass membership in elections.

Union structures may need to be amended, or new structures established to enable workers from the informal economy to fully participate in democratic planning and decision-making processes. On top of this, fresh elections may be needed to ensure that new informal members are fully represented in the union democracy. The union’s constitution may have to be amended if, for example, membership is currently reserved for those in a formal workplace or employment relationship.

Clearly, large numbers of informal economy workers joining the union with democratic rights equal to those of formal economy workers may lead to the election of new leaders from the informal economy, threatening the loss of personal status and livelihoods of the incumbent leadership. Though a sensitive issue and rarely explicitly stated, this is frequently a major obstacle in the willingness of unions to organise and represent informal economy workers.

In Ghana, the Trades Union Congress revised its constitution to provide associate membership to informal economy workers through the Union of Informal Economy Association (UNIWA), newly formed in 2013 with the support of Ghana FES. This provided UNIWA with a fixed number of observers during the TUC congresses, General Council, and the Steering Committee, but withheld full democratic rights within the TUC for workers organised within UNIWA.

In Uganda, a new constitution of the National Organisation of Trade Unions adopted a differentiated voting system for the informal economy members, with a proportional representation according to numbers of paid-up members, and allocated some seats for informal economy representation on its Executive Board, and another two seats on the General Council.

The Sierra Leone Labour Congress (SLLC) decided to allocate one delegate per 3,000 paid-up members from the informal economy, while one delegate each per 1,000 members is allocated to formal sector trade unions at the congresses of the SLLC.

The Ugandan Amalgamated Transport and General Workers Union (ATGWU) initially affiliated informal economy associations on an ‘associate’ basis, but after a long, patient and sensitive process of dialogue between informal and formal economy members, the constitution was changed to ensure more equality. Today, the ATGWU Executive Board has equal formal and informal representation.

To differentiate those worker organisations that are truly democratically accountable and representative of informal workers from those that are not, WIEGO promotes the concept of membership-based organisations(MBOs). Marty Chen, former International Coordinator of WIEGO, defined MBOs to be “those in which the members elect their leaders and which operate on democratic principles that hold the elected officers accountable to the general membership.” (Bonner & Spooner, 2012, cited in Spooner et al. 2021).

While democratic workers’ organisations, unions, and their federations and networks are varied in scope, size, structure, and characteristics, they share a number of key principles. WIEGO has developed the following list democratic principles which can help to differentiate and identify truly democratic workers’ organisations.

Democratic Principles

Most fundamentally, democratic ownership by the members – the workers. Each and every member should have an equal voice in electing the leadership, determining policy, and setting priorities for activity: in other words, the workers own the organisation, not just through exercising their rights to vote regularly, but through participatory democracy. The organisation should be led by a committee or a board drawn from representatives of the workers themselves. It can be an informal local group of a few dozen members, or a complex organisation of many thousands, but the principle remains the same.

Transparency to their members. Every member should have the right to see and understand the workings of the organisation – its constitution and rules, accounts, budgets and sources of income, decision-making processes (e.g. minutes of meetings), recruitment processes for staff and major contractors, and other key records. Apart from strengthening the democratic processes of the organisation, transparency also ensures the accountability and honesty of the leadership.

Solidarity – unity between the members and between workers’ organisations; collective rights (an injury to one is an injury to all) and equality – of gender, race, caste and religion. As women form a large part of the informal workforce, there is a responsibility to pay particular attention to gender equality and the promotion of women in leadership, such as constitutional arrangements that guarantee a proportion of governing bodies to women representatives.

Collective benefits for the membership – serving the interests of its members, not of its leadership.

Independence from governments, employers, politicians, or religious organisations. This is not to imply a lack of respect for the law or the decisions of (democratically elected) governments. Nor does it imply the rejection of negotiation and collective bargaining with governments, employers or other agencies. Workers’ organisations and their members are perfectly entitled to provide support for political parties, where it is in the interests of the members to do so, and they are at liberty to hold whatever religious beliefs they wish. But none of these institutions should have control over the organisation or override the members’ democratic rights.

Financial contribution of members. In traditional (i.e. formal economy) trade unions and workers’ associations, one’s membership is dependent on making regular financial contributions at a rate set by the governing body. This ensures a steady supply of income to cover at least the basic costs of running the organisation. It also ensures that there is a degree of financial independence.

Many workers’ organisations in the informal economy recognise that a regular financial contribution is not just a precondition of organisational sustainability, but – no matter how small the amounts collected and how difficult it is to collect – that it binds the membership to the organisation, and the leadership to the members. This does not preclude seeking and accepting external support, but ensures that the members stay in control of direction and priorities.

https://www.wiego.org/sites/default/files/resources/files/ICC2-Building-Orgs-Informal-Workers-English.pdf

Is the worker organisation/union a membership-based organisation?

Use the table above to discuss where on a range of 1 to 10 the worker organisation falls on each of the following:

Democratic ownership
Transparency
Solidarity
Collective benefits
Independence
Financial contribution of members

Based on your discussion, identify three practical and realistic steps that can be taken to improve the democratic structures and practices of the union/worker organisation.

One of the most fundamental question is whether the workers and their unions and organisations have a sense of inclusive solidarity, whether they recognise informal workers to be workers with the same needs and rights as workers in the formal economy, or whether they believe that solidarity should be exclusive to those in the formal economy. Exclusive solidarity“seeks to enhance the advantages of a particular group (possibly at the expense of others)”, and inclusive solidarity “aims at integrating diverse constituencies and advocates a broad understanding of class politics” (Ludwig 2019, in Spooner et al. 2021).

At the core of inclusive solidarity is a “sense of shared identity, based on a perceived or experienced community as workers” and that “an injury to one is an injury to all.” (Lindberg 2014, in Spooner et al. 2021) Inclusive solidarity is motivated by immediate collective self-interest for material gain (income, working conditions, etc.), but also by broader ethical and political convictions.

These forms of solidarity will often co-exist within workers ́ organisations, and the relationship between the two can be complex and contradictory. Nevertheless, the chemistry of exclusive and inclusive solidarity is the crucial factor in determining whether it is possible, or desirable, to cross the divide between formal and informal workers and their respective organisations.

The differences between what informal economy workers want and what the union can offer can present serious barriers. The unions must address whether it has the appropriate institutions for the organisation and representation of informal workers.

There may be many reasons why formal worker unions and their members may be cautious or hostile to cooperation with informal workers. These issues will need to be addressed in order to determine if the union and/or workers' association is ready to move forward to increased cooperation and to decide what the cooperation could look like.

“Not everyone in unions has accepted the need to engage with informal economy workers. There can still be internal opposition from both members and leadership who see them as a threat. This is most common among unions in the global North, although still present in the global South. In some countries, informal economy workers are not covered by labour law, which makes things difficult by not recognising the right to collectively organise, for example. Organising informal economy workers requires a cultural shift, particularly in understanding collective bargaining in the context of self-employed workers.” (Dave 2019, in Spooner et al. 2021)

Before you discuss what type of cooperation would be most beneficial, first determine if the union and/or worker organisations are ready for increased cooperation.

Do the leadership and members understand inclusive solidarity? Do they recognise informal economy workers as workers with the same needs and rights as formal workers?

What concerns do members and leaders have about increased cooperation with informal economy workers?

Is there support for change? Is there capacity to change?

Is there a mandate from the membership?

What are the implications for constitutional and organisational reform?

What are the implications for the culture of the organisation?

If the union/worker organisation is not ready for increased cooperation, identify one to three practical other steps to move towards cooperation in the future such as:

Informal economy worker interviews and surveys (Participatory Action Research)?
Education?
Advocacy?
Other steps including advocating for the status of informal economy workers, increasing services and benefits, collective bargaining, building financial support and sustainability, or improving democratic structures?

Once the union/worker organisations are committed to moving forward, the next step is to more fully understand the organisations that will be cooperating.

Discuss the following questions, understanding that all organisations will fall short. The key question is whether there is sufficient capacity to improve shortcomings.

If you are not sure of the answers, discuss what steps you will take to learn more.

What is the legal framework? Are there legal constraints to the organisation (trade unions, cooperatives, associations)?

How are informal economy workers/ formal economy workers organised?

Do the organisations represent all workers in the industry or is the leadership dominated by certain interest groups (informal employers, ethnic groups, political parties, criminal gangs, etc.)?

Do women, racialised, young, unskilled, and migrant workers have a strong voice?

Who are the leaders? How are they democratically accountable? To what extent are the organisations democratic?

What are the attitudes of leaders, activists and workers towards trade unions?

Do the organisations include both informal economy workers and informal economy employers?

What is the relationship between the two? What is their relative power in the organisation?

What are the financial and technical and other resources?

Do they collect membership dues and, if so, how is this done?

Do these organisations have power?

Do they have significant membership and/or support among the workers (associational power)?

Do they have the ability to take effective industrial action (structural power)?

Do they command respect and support from other social movements or the general public (societal power)?

Do they already have some recognition from, and negotiate with, local or national authorities (institutional power)?

Are the organisations independent, truly democratically accountable to the workers they represent and capable of long-term sustainability?

There are a variety of approaches to increased cooperation between informal and formal worker organisations, including the following four possibilities:

i. Direct recruitment of individual informal workers into unions through campaigning and organising

ii. Affiliation of informal worker organisations into unions or national centres

iii. Support to transition into a union or membership-based worker organisation

iv. Development of alliances or ‘memoranda of understanding’ between unions and informal worker organisations

Each of four of the possible approaches to increased cooperation between informal and formal worker organisations are explored in more detail below:

i. Direct recruitment of individual informal workers into unions through campaigning and organising

Unions and informal workers’ organisations can build more inclusive campaigning and organising strategies which consider those who have long been excluded from union coverage – including women, racialised and migrant workers.

Campaigning and organising strategies may require separate targeted organising and campaigning strategies, rather than all workers being integrated under the same organisational structures as other workers.

Workers' cultures and ways of communicating may be very different from what formal workers are using in the same job and industry, which will impact the campaigning and organising methodologies.

“In India, drivers use a ‘missed call’ system to sign people up and have developed an elaborate signalling system through missed calls, which, in the context of drivers’ extremely low pay, costs nothing to use.

The New York Taxi Workers Association (NYTWA) is now running a pilot scheme with Uber drivers where they call a number and then hang up (a ‘missed call’) which registers their membership and is then followed up with calls from the union – this is a base of what can be built into an elaborate system.” (Mathew, 2019 in Spooner et al. 2021)

The Hong Kong Confederation of Trade Unions has played a central role in organising formal and informal migrant workers and especially domestic workers.

ii. Affiliation of informal worker organisations into unions or national centres

If the leadership of the union and informal worker organisation are confident that their activists and members are at least willing to explore cooperation, then a more formal democratic process can be initiated to determine agreement on objectives, organising strategy, and common vision. A collective strategic planning process may be helpful.

Informal economy trade unions or associations may be formed where formal jobs have become informalised (e.g. where there has been a change in regulatory/legal frameworks changing the structure of a sector) or when informal jobs become formalised.

In the farming sector in Africa, IMF and World Bank policy in the late 1970s was having a negative impact on the farm sector. There were mass job losses, particularly in Ghana. The agricultural unions were also losing members. Under the structural adjustment programmes, the agricultural union formal worker membership went from 130,000 to 30,000.

At the same time, the ILO adopted a resolution on rural workers which redefined ‘farm hands’ or ‘rural labourers’ as ‘real workers.’ The Ghanaian TUC was encouraged by this and broadened their definition of ‘worker’. This encouraged unions to associate informal economy workers and led to a huge growth in the membership. The unions turned to informal economy workers’ associations, changing the constitution so associations could sit within their structure. (Horn 2019, in Spooner et al. 2021)

iii. Support to transition into a union or membership-based worker organisation

Unions can work with informal worker organisations to recruit members into the union or into an informal worker organisation.

“As a domestic worker, coming straight into a trade union is far too big a leap. What we found was that there were already mutual support groups that existed that had the links with all the workers on the ground on a day-to-day basis. It was those groups that we knew we had to link up with in terms of organising people into the union”. (Holland 2019, in in Spooner et al. 2021).

Trade unions can work with worker associations to provide practical ongoing support or support for specific worker organising campaigns. Worker associations can often assist unions in reaching out to informal workers. Whether the workers affiliate to the union or to a worker association, improving working conditions helps all workers.

The Congress of South African Trade Unions (COSATU) provides affiliated associations of the International Domestic Workers Federation (IDWF) the use of their offices.

iv. Development of alliances or ‘memoranda of understanding’ between unions and informal worker organisations

Where informal associations or unions lack the resources or knowledge base, and wish to maintain their independent structures, there are instances where they can form alliances with, or give support to, associations on specific issues or campaigns. This is sometimes achieved through a formal memorandum of understanding between unions and associations.

The Tanzania Union of Industrial and Commercial Workers (TUICO) has long been organising market vendors, but were initially resistant to organising street vendors ‘machingas’. However, in 2013 the union faced huge membership losses after the municipality dismantled the market shelters that the union had built at Kiriakou Market in Dar Es Salaam.

When workplaces of the market vendors were dismantled, the workers were forced into more precarious work as street vendors. After this, the union recognised the need to extend the scope of their organising strategy and began organising street vendors. However, they were only able to organise around 5000 market vendors and machinga members.

TUICO then signed a memorandum of understanding with VIBINDO – an association of street vendors with 65,000 members – meaning that all VIBINDO members become TUICO members. The memorandum of under- standing with VIBINDO saw TUICO’s membership grow to 140,000 in 2019. (Spooner et al. 2021)

Discuss what form the increased cooperation might take. Be as specific as possible.

Direct recruitment of individual informal economy workers into unions through campaigning and organising?

Affiliation of informal economy worker organisations into unions or national centres?

Support to transition into a union or membership-based worker organisation?

Development of alliances or ‘memoranda of understanding’ between unions and informal economy worker organisations?

Other form?

Depending on the situation, the following FES Tool Box Resources Strategic Planning, Campaigning and Organising, and Union Cooperation and Restructuring may be useful.

Domestic Workers
International Domestic Workers Federation
https://idwfed.org/en

Street Vendors and Market Traders
StreetNet International
http://streetnet.org.za/

Waste-Pickers / Recyclers
Global Alliance of Waste Pickers
www.globalrec.org

Home-Based Workers
HomeNet South Asia:
https://hnsa.org.in/
HomeNet South-East Asia:
https://homenetsea.org/

Construction Workers
Building & Woodworkers International (BWI):
www.bwint.org

Transport Workers
International Transport Workers Federation
www.informalworkersblog.org / www.itfglobal.org/en

Women in Informal Employment:
Globalizing & Organizing (WIEGO)
www.wiego.org

Spooner/ Montague-Nelson/ Whelligan
“Crossing the Divide - Informal Workers and Trade Unions Building Power”.
http://library.fes.de/pdf-files/iez/17534-20210311.pdf

Informal Workers

Crossing the Divides

Content on this page

What is Informal Work?

History of Informal Work

Structural Discrimination

Power Resources

Crossing the Divide

Worker Surveys and Interviews

Status, Identity and Workers' Organisations

Collective Bargaining

Services and Benefits

Financial Support and Sustainability

Education

Advocacy

Democratic Structures

Democratic Principles

Cooperation Between Informal Worker Organisations and Unions

Additional Resources