2. Elective : Elective on “The role of social and solidarity economy organizations in formalising the informal economy

3. Knowledge expedition on Informal economy , and the transition to formal economy (20mn)
Facilitator note: Draw out the issues of women as vunrable workers in the informal eceonmy, as the majority in many countries, in particular young women.

4.
4:32

5. Group work
Using the all method introduce to each other (name, country and institution) and discuss in pair and in 4 the following questions;
Identify through the video and own experience, one or two decent work deficits in the informal economy.
Do you think there could be any different decent work deficits for the woman in the video, as compared to the men?
Can you share one success story on successful transition and decent work?
How SSE could be a response to address those deficits and promote transition to formal economy?

6. Expectations and contributions
Expectations (yellow post-it)
Contributions (green post-it ) knowledge

7. Three objectives
Discuss the new ILO Recommendation on the transition to formal Economy adopted by the ILO 2015, and discuss in particular the role of SSE in implementing the new instrument
Map out and share policy approaches by participating countries as well as practices on SSE and the link to formalisation;
Discuss way forward in putting into practice the Recommendation concerning the transition from the informal to the formal economy by promoting SSE

8. Day 1 _ focus
Conceptual framework on informality and transition to formal economy : Recommendation 204
The social economy: enhancing productivity, improving working conditions, extending social protection in the informal economy

9. The informal economy in numbers
1. 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.
2. 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.
3. With 9.3 per cent and 17.8 per cent respectively, middle income countries in Africa like Mauritius and South Africa show much lower percentages of informal employment.
4. For North Africa and the Middle East, informal employment also accounts for a substantial proportion of employment ranging from 30 per cent to 70 per cent.
5. South and East Asia also 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.
6. 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
7. In the majority in Sub Saharan African countries women out number men in the informal economy.

10. What ILO means by “Informal Economy”
“Informal economy - All economic activities by workers and economic units that are – in law or in practice – not covered or insufficiently covered by formal arrangements - 90th ILC 2002”
‘in law’ : those excluded or partially covered by the law (eg. 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

11. More definitions
Employment in the informal sector – All jobs in informal sector enterprises - “Enterprise-based definition”– 15th ICLS 1993
Informal employment – “All informal jobs, whether carried out in formal sector enterprises, informal sector enterprises, or households - “Job-based definition”– 17th ICLS 2003

12. E Employment in the informal economy
Two components
Informal sector employment
Informal employment
Informal jobs outside of IS
Formal jobs in
IS enterprises*
Employment in the Informal Economy:
= Informal sector employment + informal employment outside of Informal Sector

13. Who are in the informal economy?
For economic units ( Enterprises, Entrepreneurs, Households)
Unregistered unincorporated enterprises producing at least partly for the market
Registered enterprises who do not declare part of their economic activity to relevant authorities
Informal cooperatives

14. Who are in the informal economy?
For workers
Both men and women but women often out number men. In particular, young women.
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.);

15. The Informal economy is extremely heterogeneous
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 among others

16. 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
Concentrated gender based discrimination (in pay, conditions, voice, skills training).
Businesses
Low productivity and poor performances of informal economic units as a result of limiting factors ( limited access to capital and BDS services, limited human capital, limited access to markets, poor infrastructure, etc.)
The costs for formalization include as well costs for registration; time consuming registration procedures; inappropriate and complex tax and compliance systems.
The lack of incentive to formalization result from poor access to finance, skills programs and business services, and the lack of formal quality health services, etc.

17. 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.

18. Decent Work Deficits within the Informal Economy
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 and sustainable MSMEs
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 or weakly organized and they are not or insufficiently represented in consultative frameworks.
Decent work deficits are most pronounced at the bottom end among women and young workers.

19. 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.

20. What shall we do with informality?
Laisser faire ?
Forbid ?

21.
Martha Chen of Harvard University's Kennedy School of Public Policy says economists face two issues in reducing informality, but their top priority should be reducing deficits of "decent work."
Why the formalization of the economy is a desirable goal

22. In the ILO Governing Body, employers and workers and some governments such as the African group, strongly advocated for an instrument on the informal economy. As a result, a standard setting item on transitioning to formalization has been scheduled for the ILCS.
Although the exact content of the instrument is yet to be decided, much of the conceptual thinking from the Tripartite General Discussion in 2002 may be built upon.
MODULE 1

23. Recommendation 204
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 (in particular for long-term unemployed persons, women and other disadvantaged groups);
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.

24. Recommendation 204 Policy actions on : On 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  

25. SSE in R204
“economic units “ in the IE also refer to “cooperatives and social and solidarity economy units.”
Application of R204 to also : members of cooperatives and of social and solidarity economy units;
Integrated policy framework should among others address: 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;
What does the following statement mean for organizations of workers and economic units in the IE “Employers’ and workers’ organizations should, where appropriate, extend membership and services to workers and economic units in the informal economy.

26. Story telling : Workers perspective
Workers voice
For Facilitator: Encourage workers to look at a story that focuses on promoting on gender equality.

27. Main messages
Informality affects all labor markets, but in different degrees and manifestations;
Decent work deficits are deeper in the informal economy than in the formal economy;
There are many drivers of informality and they vary according to factors such as the economic, political, institutional, and labour market characteristics of a country, its degrees and type of integration in the global economy etc.
Policy responses need to take into account the diverse actors, activities and sectors involved, i.e. uniform policy responses are inappropriate (E.g. not gender mainstreaming policy options will further disadvantage women in the informal economy);
For facilitator: For example not gender mainstreaming policy options will further disadvantage women in the IE.

28. The Social Economy – the bridge between formal and informal

29. Advantage of SSE organizations in the informal economy
Providing services to those in the informal economy;
Organizing informal economy workers;
Providing employment opportunities.

30. One definition among others
“A concept designating enterprises and organisations, in particular cooperatives, mutual benefit societies, associations, foundations and social enterprises, which have the specific feature of producing goods, services and knowledge while pursuing both economic and social aims and fostering solidarity.”

31. Many different terms….
Social Economy, Solidarity Economy, Community Economy, Popular Economy, Social and Solidarity Economy, Social Enterprise, Social Economy Enterprises, Third Sector, Non-Profit Sector, Economic Alternatives, etc., etc.,

32. …but common characteristics
Social Economy entities differ from other types of enterprises and social organizations in that:
Their primary purpose is not to obtain a return on capital and recognize the primacy of people and work over capital;
They are flexible and innovative - social economy enterprises are being created to meet changing social and economic circumstances;
They are built on the principles of solidarity, mutuality, reciprocity, cooperation and proximity;
They emphasise the importance of social capital in producing healthy societies
They highlight social, socio-political and economic benefits of activities, not solely market-based profit maximization
They are based on voluntary participation, member empowerment and commitment.

33. Three intertwined objectives
economic objectives
environmental objectives
social objectives

34. Social economy entities
Social Economy entities are generally grouped into five “families”:
Cooperatives of various forms and various levels, including credit unions and building societies;
Mutual societies established primarily to organize insurance coverage through mutual assistance;
Associations and voluntary organizations, provided they are economically active;
Foundations;
Social enterprises that combine a social and societal purpose with the entrepreneurial spirit of the private sector

35. The Social Economy as a Bridge
Connecting informal with formal economies: social economy organizations, being officially recognized, belong to the formal sector; their members, however, may remain in the informal economy.
Bringing together rural and urban societies: social economy entities 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: social economy entities usually 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.

36. A virtuous triangle
Opportunity
Protection
Empowerment

37. The Social Economy and Productivity
Economies of scale;
Encourages diversity through more democratic processes which facilitates productive workplaces.
Pooling of services, purchasing power and economic functions;
Capital accumulation for productivity investments;
Horizontal networks and vertical integration along value chains
Example: The « Banques Populaires de Rwanda », the country’s biggest bank with 109 branches and 617,000 members who have deposited 156 million US-$ in savings and shares.

38. Social Economy and working conditions
Generating bargaining power to increase incomes;
Organizing social services and community services through self-help;
Taking over bankrupt enterprises
Creating jobs for marginalized people through social enterprises
For facilitator:
A caveat mentioned often is the ghetoising of women in sectors and levels where society sees they should be. E.g. the care economy. Workers oragnisations also see SEs as displacing existing workers employed in social services.
Example: the 606 housing cooperatives organized in the National Union of Housing Cooperatives of Senegal provide affordable housing to over 150,000 households. They have accumulated some 30 million US-$ in savings.

39. The social economy and extending social 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.

40. The social economy and empowering entrepreneurs
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: RENAPESS, RAESS, Social Economy Europe, RIPESS

41. Types of cooperatives most suited to Informal Economy Workers
Savings and Credit Cooperative Societies: 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);
Social service cooperatives: providing health care and other social services;
Agricultural cooperatives: providing farming inputs and marketing.

42. The cooperative advantage in the informal economy…
Cooperatives and similar organizations can play a key role by:
Providing services to those in the informal economy;
Organizing informal economy workers;
Providing employment opportunities.

43. Group work
Identify if and how SSE can be helpful for the following cases:
A domestic worker
A women entrepreneur
The owner of a restaurant
A construction worker

44. Val, Domestic worker in Brazil

45. Samuel, the owner of a restaurant

46. Tam - a woman entrepreneur

47. Stephen, a construction worker

48. Feedback and Open discussion
Group work
Feedback and Open discussion