The Exploding Informal Economy

Ideas and Issues Labor Organizing

Ocean Springs             More research and documentation is emerging to strengthen my case that unless the labor movement devises a new and workable model (Link: for building majority unions that are effective for workers in the informal economy, there is no future for unions.  Robert Neuwirth, who had earlier written on megaslums around the world, provides some of these insights in an interview in Wired on his new book, Stealth of Nations: The Global Rise of the Informal Economy.

            Here are some mind expanding highlights from Neuwirth’s estimates:

    • More than half of the world’s workers are informal
    • The economic product of their work is over 10 Trillion Dollars (which would make such production second in scale to that of the United States!)
    • By 2020 two-thirds of the world’s workers will be informal

The pure size of such workforces great their own power in the marketplace that if better understood and studied could drive products and demand innovation.

From the interview Neuwirth gives some examples of how this has already worked:

  • The dual-SIM card feature on African mobile phones to maximize calls at minimal rates.
  • The Gala sausage roll that is marketed by the giant British company UAC Foods solely through hawkers, street vendors, and kiosks mostly in Africa.
  • The Pure Water half-liter of water sold and sealed by a special machine at a cheap price where good drinking water is unavailable.

Neuwrith also argues that China is the source of many of these products, and therefore part of the engine propelling their economy because of the laissez faire regulation and manufacturing climate there.

Who knows about that piece of the puzzle, but there’s no doubt that the informal workforce is burgeoning, and looking at work and workers from the developed world’s perspective is missing the fact that this is where growth and change are happening on the margins rife with exploitation and desperate for organization.  The workers of the world are calling.  We need to finally answer that call.