AN ELECTIVE OF THE 5 TH SSEA JOHANNESBURG, 27 – 31 JULY 2015 THE ROLE OF THE SOCIAL AND SOLIDARITY ECONOMY IN FORMALIZING THE INFORMAL ECONOMY

STRUCTURE Session 1 (Today): Introductory video Self-introduction of the Introductory presentation Group work on addressing decent work deficits in the informal economy Session 2 (Tomorrow): Recap of Day 1 Exploring participants experience on the role of the social and solidarity economy in formalizing the informal economy Presentation of three case studies Open discussion on the implementation of the Johannesburg Plan of Action and of Recommendation 204

IMPRESSIONS FROM MALI A short video showing the informal economy in Mali

OBJECTIVES Discuss the role of SSE in implementing ILO Recommendation 204 on the transition to formal Economy Share policy approaches, country experiences and practices on SSE and the link to formalisation; Discuss the way forward in putting into practice Recommendation 204 and the Johannesburg Plan of Action

THE INFORMAL ECONOMY IN NUMBERS  In Latin America and the Caribbean the share of informal employment in non- agricultural activities ranges from 39.8 per cent in Uruguay to 75.1 per cent in Bolivia.  In many African countries, non-agriculture informal employment exceeds 50 per cent, reaching highs of 76.2 per cent in Tanzania and 81.8 per cent in Mali  In North Africa and the Middle East, informal employment accounts for a substantial proportion of employment ranging from 30 per cent to 70 per cent  South and East Asia host large numbers of workers in the informal economy, ranging from 42.3 per cent in Thailand to 83.6 per cent in India. In China, informal employment reaches 32.6 per cent – an estimate that is based on six cities  In all developing regions, self-employment constitutes a greater share of informal employment (non-agriculture) than wage employment. It represents nearly one-third of total non-agricultural employment worldwide  Several European countries report informal economy rates of over 25% (up to 53% in Cyprus)

THE INFORMAL ECONOMY IN SUB- SAHARAN AFRICA Share in non- agricultural employment: 78 % Share in urban employment: 61% Share in new job created: 93% Share in GDP (average): 42%

WHAT ILO MEANS BY “INFORMAL ECONOMY” The informal economy includes all economic activities by workers and economic units that are – in law or in practice – not covered or insufficiently covered by formal arrangements ( 90 th ILC 2002) ‘in law’ : those excluded or partially covered by the law (e.g.. agricultural workers, domestic workers in some countries); ‘in practice’: the laws may exist but the institutions of the state and enforcement mechanisms are unable to reach segments of the workforce

WHICH ECONOMIC UNITS ARE IN THE INFORMAL ECONOMY? Unregistered unincorporated enterprises producing at least partly for the market Registered enterprises who do not declare part of their economic activity to relevant authorities Unregistered self-help organizations, including large segments of the social and solidarity economy

WHICH WORKERS ARE IN THE INFORMAL ECONOMY? Own-account workers (self-employed with no employees) in their own informal sector enterprises; Employers (self-employed with employees) in their own informal sector enterprises; Contributing family workers, irrespective of type of enterprise; Members of informal producers’ cooperatives (not established as legal entities); Employees holding informal jobs as defined according to the employment relationship (in law or in practice, jobs not subject to national labour legislation, income taxation, social protection or entitlement to certain employment benefits (paid annual or sick leave, etc.);

MANY DIFFERENT PROFESSIONS Street hawkers and open-air market traders Construction workers Carpenters Motor vehicle mechanics and cleaners Metal workers Farm labourers Workers in micro-enterprises Waste pickers Taxi drivers Domestic workers

PATTERNS IN THE INFORMAL ECONOMY? Workers Low pay and productivity Weak protection under the law Inadequate and unsafe working conditions High illiteracy rates, low skills levels and inadequate training opportunities Longer working hours Absence of collective bargaining & representation rights Precarious employment relationship Businesses Low productivity and poor performances of informal economic units as a result of limited access to capital, services, human capital, access to markets etc.) Time consuming registration procedures; inappropriate and complex tax and compliance systems. Lack of incentive to formalization.

DECENT WORK DEFICITS Work in the informal economy is often characterized by small or undefined workplaces, unsafe and unhealthy working conditions, low levels of skills and productivity, low or irregular incomes, long working hours and lack of access to information, markets, finance, training and technology.

A deficit of Rights at work Informal economy workers and economic units do not (fully) enjoy fundamental principles and rights at work. A deficit of Good jobs Informal economy workers and economic units do work but incomes and productivity are most often too low to secure livelihoods and sustainability A deficit of Social protection Informal economy workers do not enjoy safe working conditions and social security schemes. A deficit of Social dialogue Informal economy workers and economic units are not organized and therefore not represented in consultative structures. DECENT WORK DEFICITS IN THE INFORMAL ECONOMY

IE AND VULNERABLE GROUPS The share of women in informal employment is higher than men in most countries. Other vulnerable populations, such as youth, ethnic minorities, migrants, older people and the disabled are also disproportionally present in informality.

MODULE 1

RECOMMENDATION 204 (2015) A. Facilitate the transition of workers and economic units from the informal to the formal economy, while respecting workers’ fundamental rights and ensuring opportunities for income security, livelihoods and entrepreneurship; B.Promote the creation, preservation and sustainability of enterprises and decent jobs in the formal economy and the coherence of macroeconomic, employment, social protection and other social policies; and C.Prevent the informalization of formal economy jobs.

POLICY GUIDANCE The Recommendation provides policy guidance on: The legal and policy frameworks; Employment policies; rights and social protection Incentives, compliance and enforcement, Freedom of association, social dialogue and role of employers’ and workers’ organizations; Data collection and monitoring

THE SSEA IN R.204 “Economic units “ in the include “cooperatives and social and solidarity economy units.” R.204 applies to: members of cooperatives and of social and solidarity economy units; An integrated policy framework should address among others the promotion of entrepreneurship, micro, small and medium-sized enterprises, and other forms of business models and economic units, such as cooperatives and other social and solidarity economy units; “Employers’ and workers’ organizations should, where appropriate, extend membership and services to workers and economic units in the informal economy.

THE SSE AS A BRIDGE Connecting informal with formal economies : SSE organizations, being officially recognized, belong to the formal sector; their members, however, may remain in the informal economy. Bringing together rural and urban societies : SSE organizations can open markets, provide financial intermediation, facilitate procurement, organize market information, etc. SE organizations are, by definition, local in nature, but have the ability to connect the local to the global. Reconciling economic and social concerns : SSE organizations have a dual nature as businesses and associations of people. They ensure that economic and financial interests remain in balance with social and societal concerns. Linking workers and employers and the civil society.

FOUR INTERTWINED OBJECTIVES Economic objectives Environmen tal objectives Social objectives Societal objectives

A VIRTUOUS TRIANGLE Dignity and a decent life Empower- ment Protec- tion Oppor- tunity

THE SSE FOR GREATER PRODUCTIVITY The « Banques Populaires du Rwanda », with 191 branches and 1.3 million members manage 200 million Euros in assets Economies of scale and scope Horizontal and vertical integration Sharing of services Pooling of resources

SSE ORGANIZATIONS CREATING OPPORTUNITIES Providing a platform for joint production and innovation Facilitating capital accumulation; Rescuing ailing enterprises Providing market access Example: the Oromia cooperative union in Ethiopia provides farmers with market access

SSE ORGANIZATIONS ENHANCING PROTECTION Social security in rural areas and the informal economy through mutual benefit groups Micro-insurance schemes Burial societies Community care groups for HIV-AIDS victims Health service cooperatives Example: 21% of the South African population are members of a burial society; they save on average 15% of their income, equivalent to an amount of 4.5 bn Rand (600 million $) per year.

THE SSE: EMPOWERING PEOPLE Greater bargaining power through collective action; Stronger voice through networks and associations; More influence through horizontal and vertical integration; Partnerships with other social movements; National, continental and international structures: RAESS, Social Economy Europe, RIPESS, MBM, UN- TFSSE

SSE ORGANIZATIONS MOST PROMINENT IN THE INFORMAL ECONOMY Savings and Credit Associations: providing financial services to improve existing businesses or starting small enterprises; Workers’ cooperatives: creating more secure jobs (e.g. shoe-shiners coops or waste pickers coops); Mutual benefit groups: providing health care and other social services; Rural producers associations: providing farming inputs and marketing

GROUP WORK Identify if and how the SSE can be helpful in addressing decent work deficits affecting: 1.A domestic worker 2.A women street vendor 3.A restaurant owner 4.A informal construction worker  Which decent work deficits affect those workers?  How can the SSE address them?