Written by CHRISTIAN GAYA |
Friday, 07 December 2012 08:07 |
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A
VERY large proportion of the population in East Africa Regions still does not
enjoy any social protection or is covered only very partially. This is the case
for the vast majority of people in Tanzania as country, and even in some of the
rest third world countries there are large and growing gaps in social
protection.
Informal economy workers are not covered by social security for a
variety of reasons. One is the extreme difficulty of collecting contributions
from them and, as the case may be, from their employers. Another problem is
that many of these workers are unable to contribute a relatively high
percentage of their incomes to financing pension social security benefits and
unwilling to do so when these benefits do not meet their priority needs.
Their most immediate priorities tend to include health care, in
particular where structural adjustment measures have reduced access to free
services. They feel less need for pensions, for example, as for many of them
old age appears very remote and the idea of retirement perhaps unreal.
Unfamiliarity with public pension schemes and distrust of the way they are
managed add to their reluctance to contribute.
The
problem of low coverage is of course not new, especially in countries like
Tanzania where large numbers of people work in subsistence agriculture.
However, in recent years, prospects of resolving or at least mitigating it have
taken a dramatic turn for the worse, as an increasing proportion of the urban
labour force is working in the informal economy,
inter alia as a result of
structural adjustment.
In
Tanzania and many other parts of the developing world in recent years most of
the increase in the urban labour force has taken place in the informal economy.
In most regions of Tanzania, a growing proportion of the urban labour force is
active in the informal economy, reflecting the (at best) sluggish growth of
wage employment, the massive migration to the cities and the need for workers
to supplement falling wages with earnings from the informal economy.
For example, in the case of Tanzania, informal employment accounted for
almost two-thirds of total urban employment, compared with just 10 per cent.
Several developing countries of Asia have expanded wage employment
substantially but the informal economy remains very important almost
everywhere. In India, for example, if agriculture is included, more than 90 per
cent of workers are to be found in the informal economy.
It should be noted that the informal economy is not a “sector” as such. It is in
fact a phenomenon to be found in almost all sectors. And it includes workers of
all different categories: employees, self-employed, home-workers, unpaid family
workers, etc. Informalization is not restricted to small-scale enterprises; in
many countries it includes unregulated wage labour throughout the economy: in
Tanzania, for example, approximately 95 per cent of urban wage earners are in
informal employment.
In Tanzania for example and in other many developing countries a higher
proportion of women work in the informal economy, to some extent because there
they can more easily combine work with their heavier burden of family
responsibilities, and partly for other reasons related, for example, to
discrimination encountered in the formal economy.
ILO statistics show that in two-thirds of the countries for which
separate figures are available, the informal economy accounts for a higher
share of total female urban employment than is the case for men. There is a
widespread tendency for women to remain trapped in the informal economy for
much of their working lives, whereas for men in the industrialized countries at
any rate, it is less likely to be permanent. For long-term income security (in
old age for instance), this difference has especially important implications,
as women tend to live longer than men.
Informal economy workers have little or no security of employment or
income. Their earnings tend to be very low and to fluctuate more than those of
other workers. A brief period of incapacity can leave the worker and one’s family without
enough income to live on. The sickness of a family member can result in costs
which destroy the delicate balance of the household budget.
Work in the informal economy is often intrinsically hazardous and the
fact that it takes place in an unregulated environment makes it still more so.
Women face additional disadvantages due to discrimination related to their
reproductive role, such as dismissal when pregnant, or upon marriage. Women in
the informal economy do not benefit from safeguards and benefits related to
child-rearing that in principle apply to women in formal wage employment (such
as family allowances, paid maternity leave, nursing breaks or assistance with
the cost of childcare).
It is now widely recognized that there is a pressing need to find
effective ways to extend social protection. The recent past has seen stagnation
in the proportion of the labour force covered. Given current economic trends,
failure to take action is very likely to lead to a reduction in the rate of
coverage or even in the absolute numbers of workers protected, as has occurred
in Tanzania.
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