Chronically poor people are poor over extended periods of time, often over a lifetime and may pass their poverty onto their children. Frequently lacking material assets including land, livestock or the equipment for a microbusiness, the main asset of chronically poor people is their labour. The majority of chronically poor people are economically active but the poor quality of that work, including its low-pay, dangerous conditions and insecurity or irregularity means that this work frequently maintains people in poverty rather than enabling poverty escapes. Escapes from poverty, meanwhile, are related to changing conditions of work and additional labour income. This can be through greater diversification, higher earnings per hour or an increased number of hours worked. Evidence from panel data and life histories shows how escapes from chronic poverty are associated with gaining salaried employment and engagement in non-farm activities including through establishing a micro-business or engagement in non-agricultural wage labour.
This Policy Guide examines policies and programmes to improve the quantity and quality of work for chronically poor people engaged in informal wage employment so that their hard work can contribute to poverty escapes. Its main findings are the following:
- Foreign Direct Investment (FDI) can play an important role in opening the space for debates on labour standards. Pressure and campaigns by international civil society organisations, including NGOs, can build-up sufficient pressure for multinational corporations to change their practices. International donors can also play a role in raising standards and Fairtrade has increased the proportion of workers with written contracts on its banana plantations.
- Innovative alliances across state and civil society, including NGOs, trade unions, social movements and workers organisations, with international support, are central for improving, not just the working conditions, but also providing an identity for chronically poor labourers. Labour exchange implies relationships between two or more parties whose interests often conflict. This means that moves towards formalisation per se (for instance through a requirement for written contracts) are insufficient. Instead, these need to be supported by innovative alliances which are better able to even the power relationships within that exchange.
- Access to quality jobs is the function of a range of factors. Social connections are important but so is education. Even reasonably limited levels of education at a primary and secondary level can improve the prospects of chronically poor people in the labour market. However, ideally formal training and apprenticeships should be accessible for chronically poor and marginalised people in the informal economy.
- In addition to a policy focus on demand for labour, as important should be a consideration of the supply of labour to the labour market. Education and training are important in delaying the entry of young people into the labour market and so can contribute to tightening labour markets. The eradication of child labour as well as social protection can further tighten labour markets, thereby increasing the position and power of adult labourers to negotiate their wage rates. In the long-term, family planning policies are important in reducing future supply of labour. The challenge of enabling chronically poor people to access quality work is far too important and extensive just to be left to ministries of labour.