This workers’ migration from informal to formal economy…

20Jan 2017
Muharram Macatta
The Guardian
Commentary
This workers’ migration from informal to formal economy…

THE increase in dependence on technology by our standard of living underscores the need for a more technologically trained workforce.

Attracting young students into various careers – as engineers, technologists, technicians, etc. – poses serious problems in countries across the globe.

To help attract the attention of high school students and direct their interests toward engineering, it is necessary to identify and analyse potential future challenges in fields like engineering that could contribute significantly to people’s standards of living.

This task has challenges of its own. One is to attract the attention of the student, and another is to excite students’ career interests by identifying challenging and rewarding future opportunities in engineering.

For instance, the field of nanotechnology offers challenging and rewarding future opportunities. Specific challenges would help attract the attention of students, ones that are easily understood and bring obvious benefits to peoples.

These could include a “zero-emissions” power source to support a 480km, 130 kph, four-passenger car; a “wind-up”, low cost, device to access the world wide web, anytime, anywhere; home diagnostic system with tele-medical connection, including ingestible nano-devices, video and thermal sensing, as well as a system for fully-recyclable packaging.
The following engineering fields have been identified as likely targets for future challenges:

materials, climate, energy and the environment, education, biomedical, communications, water practices and management, digital divide, transportation (personal use vehicles), agriculture and the environment, robotics, reuse and recycling and the environment, sustainable development, security, water supply, public transportation and the environment.
Sustainability typically involves the balancing of three major factors: The economy, the environment, and some notion of equity. Though the economy is already a key aspect, the recognition of the informal economy, seems to be absent from the many possible permutations of these three.

This analysis will explore the various aspects of the informal economy and how it can make a considerable impact on achieving a more sustainable future. More specifically, it focuses on how the informal economy can encourage the sustainable use of goods, while offering an alternative to the regulated market economy as well as transforming informal to formal economy.

By supporting the informal sectors such as farmers markets, street vendors and non-market activities, a shift away from a car-dominated society and singular economic trajectory can begin.

The informal sector can provide social capital, promote local economies, create jobs and provide the need economic shift toward a sustainable future.

Development policies to lift productive capacity by raising productivity through diversification, technological upgrading, innovation, entrepreneurship and investment in skills are an essential foundation for full and productive employment and decent work for all.

Micro, small and medium sized enterprises (MSMEs) generate the largest proportion of jobs around the world. It is therefore essential to improve the environment for enterprises to start-up, survive, grow and be sustainable.

Promoting MSMEs supports domestic resource mobilisation as well as spurring investment demand, generating productive capacity and decent work while building social cohesion.

Increasing formalisation of economic activities is an essential foundation for the development of sustainable enterprises. They need financing for their productive activities, which in turn generate jobs and the economic growth and structural transformation that raise living standards.

Financial inclusion and more accessible financing conditions for MSMEs loosens constraints to growth by supporting the expansion of working capital and investment, increasing resilience to adverse economic shocks and the development of skills and capabilities.

Access to finance is the biggest constraint faced by especially micro and small enterprises in both developed and developing economies.

Investing in the extension of social protection coverage is a significant factor in tackling persistent poverty, economic insecurity, growing levels of inequality and insufficient investment in human capabilities. It can also bolster aggregate demand.

There has been significant progress in extending coverage of social protection systems and improving their level in a number of emerging economies.

Universal access to social protection systems, including by establishing and maintaining nationally determined social protection floors, is not only an important means of assisting those living in or vulnerable to falling into poverty but also a factor that helps to stabilise the economy and maintain and promote employability.

Several areas of labour market policy action combine with enhanced fiscal measures and productive development policies in supporting inclusive growth and jobs. They include strengthening labour market institutions such as collective bargaining, reducing wage inequality, through things like minimum wages, and improving employment outcomes for vulnerable groups in the labour market.

Others are improving job quality by fostering the transition of workers from the informal to the formal economy, and tackling labour market segmentation; ensuring equality of opportunities to participate in quality education, training and lifelong learning.

Yet others are promoting universal social protection and fiscal measures such as adjustments to tax and social protection systems to lift the incomes of lower income households, which have a high multiplier effect because such groups spend most of any increase in disposable income.

Investment in infrastructure is also a proven method of accelerating recovery. Such investments in the medium to long term growth potential of economies can also be designed to maximize the short term employment impact.

The ILO Declaration on Fundamental Principles and Rights at Work sets out the foundations for the human and labour rights that enable people “to claim freely and on the basis of equality of opportunity, their fair share of the wealth which they have helped to generate and to achieve fully their human potential”.

It is important that the advice provided by the Multilateral Development Banks and the IMF in areas such as labour market reform or on project funding does not differ from that provided by the ILO as the competent international authority on international labour standards.

Decent work is both a means and an end of sustainable development. Respect for fundamental principles and rights at work and labour rights in general is part of the integrated approach that can foster the simultaneous achievement of the social, economic and environmental pillars of sustainable development.

The ILO is an active member of the UN Development Group and the system of UN Country Teams. It looks forward to much closer country level collaboration between the World Bank Group, the IMF and the UN in support of the cohesive nationally owned sustainable development strategies called for by the 2030 Agenda, including on capacity-building of labour market information systems.

The ILO is well-placed as a result of its tripartite governance structure and its standards system to play a leading role in partnerships that build sustainable labour market and social policy institutions as well as offer constructive evidence-based policy advice on the increasingly urgent actions needed to tackle the global decent work challenge.

Six areas of labour market policy action that together with enhanced fiscal measures and productive development policies can support inclusive growth and jobs are strengthening labour market institutions; reducing wage inequality; improving employment outcomes for vulnerable groups in the labour market.

There is every need to improve job quality by fostering the transition of workers from the informal to the formal economy, tackle labour market segmentation, ensure equality of opportunities to participate in quality education, training and lifelong learning, as well as promote universal social protection.

Responding urgently and vigorously to the scale of the global jobs challenge is key to successful implementation of the 2030 Agenda. Current and forecast growth rates are insufficient to meet this challenge.

Not only will outright unemployment continue to move upwards, many of the jobs being created will not speed poverty reduction, help narrow inequalities or boost aggregate demand.

Weak output growth has a particularly damaging impact on the employment prospects of young women and men. In low income countries, the major challenge is to generate more and better job opportunities in the formal economy for young women and men while lifting educational attainment and occupational skill levels.

Hence, setting course for 2030 requires measures that both rekindle growth and also build the institutions and policy frameworks that are key to transforming and sustaining global development towards the SDGs.

More integrated policies that promote decent work as a vital means as well as end for inclusive and sustainable development are a priority.

It is vital that current trends of decelerating growth, weak employment and widening inequality are quickly reversed by concerted action to make growth greener and more inclusive and establish a trajectory that will enable the goals of the 2030 Agenda for sustainable development to be realised.

The transition from the informal to formal economy must also be prioritised, as should the opportunities presented by the digital revolution, which must be turned into a “development revolution” with the possibilities for the people-centered societies it offered.