Locking down India for 21 days may slow the spread of the new coronavirus, but it's quickening the misery of the hundreds of millions of people who work in the country's informal economy.
By some accounts, these workers make up nearly 90% of India's labor force, from self-employed trash collectors to stay-at-home garment embroiderers. Job security is minimal and the safety net is all but nonexistent. With cities shut down, these workers are migrating home to villages by the hundreds of thousands, potentially spreading the virus along the way.
India's situation isn't unique. From Southeast Asia to South America, the world's 2 billion informal workers are suffering some of the earliest and most devastating effects of the coronavirus and social distancing. Yet public aid packages have so far been largely directed at formal businesses and employees. If governments like India's want to manage Covid-19 and its economic fallout, they'll need to act quickly to secure the health and safety of their informal workforces.
Roughly 60% of the world's working population is employed in informal enterprises. In emerging markets, such work often constitutes the bulk of economic output, including production, distribution and sales. It plays a crucial role in the daily function of cities and farming communities, and offers a lifeline to marginalized workers. But it also entails significant risks. Swings in market prices can be ruinous to small farmers and food vendors, for instance, while pathogens can often find hosts in a city's wide-ranging waste pickers.
If anything, the lifestyle risks are even more harrowing. Infectious diseases can spread easily in the crowded marketplaces and housing developments where such workers spend their days and nights. Mitigation strategies such as social distancing are luxuries that many can't afford. Even hand washing can be a challenge in crowded city markets and settlements where running water is scarce and communal.
During the catastrophic Ebola epidemic in West Africa, which killed more than 11,000 people, the region's informal economies were devastated by shortened working hours, quarantines, movement-control orders and restrictions on cross-border trade. In Liberia, where perhaps 90% of the workforce is informal, two-thirds of households were unable to purchase rice to meet their daily needs during the height of the epidemic. In hard-hit Sierra Leone, home-based informal businesses reported a 40% decline in income, while 170,000 non-farm self-employed wage workers lost their jobs.
There are already indications that Covid-19 will have a similar effect. In Indonesia, informal ride-hailing drivers are seeing steep drops in income. In Uganda, informal workers have clashed with police seeking to enforce Covid-19 mitigation measures. In Colombia, workers have organized large-scale protests seeking aid following the imposition of a quarantine.
Things will likely get worse. If left unaddressed, the plight of informal workers will pose long-term economic and health risks. In West Africa, the aftershocks of Ebola are still being felt, with estimates of the overall cost to the region ranging as high as $53 billion. Additional impacts include rising fiscal deficits, reduced agricultural production, increased unemployment, and declines in investment and tourism.
The best way to reduce these harmful effects is to get help to informal workers now. Governments and aid organizations should organize cash grants that can be disbursed through the ubiquitous trade associations and labor unions that support these workers. For example, the Alliance of Indian Waste Pickers will likely be better equipped to distribute aid to its members than a government agency would be. In addition, governments should make it a priority to distribute soap, protective supplies and disease-prevention information to these workers where possible.
The world's most vulnerable workers are easy to overlook in the best of times. In the midst of a global pandemic, they need to be seen and heard more than ever.
Disclaimer: This article first appeared on Bloomberg.com, and is published by special syndication arrangement."