Liberating Economics: Feminist Perspectives on Families, Work, and Globalization

Chapter 7. Dickens Redux: Globalization and the Informal Economy

7. Dickens Redux Globalization and the Informal Economy All over the world poor women, children, and men eke out an existence as street vendors, home-based pieceworkers, domestic servants, gardeners, and sex workers. When you step off a tourist bus in the global South, street vendors selling their wares eagerly meet you. Street musicians serenade travelers waiting for the metro in Paris, Berlin, London, and Amsterdam. In the early morning suburban joggers in Southern California run past Latina women and men hustling to their jobs as maids, nannies, and gardeners . And an evening stroll through the red light district ‹nds sex workers advertising their trade. All this work takes place in what economists call the informal sector. But not all work in the informal sector is so visible . Hidden in homes and sweatshops around the world, poorly paid workers sew clothes, weave rugs, stitch soccer balls, and assemble electronics. The informal sector is the unorganized and unregulated sector of the economy. Workers and businesses in the informal sector generally operate outside the of‹cial rules and regulations of the state. According to the International Labour Organization (ILO), the overwhelming majority, from 60 to 66 percent, of informal sector workers are women.1 Women often work in the informal sector because it is characterized by extremely small levels of start-up capital and minimal skill requirements and does not require access to organized markets or channels of distribution. Workers in the informal sector work in unsafe, crowded conditions and earn very low wages. Because the informal sector is so large and diverse, huge variations exist among and within countries. Still the ILO concludes that the informal sector is expanding: it is already large in developing countries, it is growing rapidly in the transition economies, and it is (re)emerging in all the industrialized countries.2 118 The size of the informal economy is quite large. According to the World Bank, the informal economy in Africa is estimated at 42 percent of GDP in 1999–2000, and in Latin America it is 41 percent of GDP. It comprises between 19 and 67 percent in the transition economies and 20 percent in the Western industrialized nations.3 These are, of course, rough estimates. It is particularly dif‹cult to measure the informal economy since some of it is illegal, most of it is unlicensed and unregulated, and many of the people who participate in it are clandestine immigrants who are not allowed to work in the of‹cial economy. The emergence of the informal sector in industrialized countries is particularly interesting. Feminist geographer Saskia Sassen argues that this phenomenon is best understood in the context of the structural changes in the economy that accompany globalization: increased income inequality and the restructuring of consumption in both high-income and very lowincome groups.4 An expansion of demand for cheap goods and services is fueled by growth in the low-income population, and the expansion of the informal sector helps meet that demand. The many gypsy cabs, unlicensed group day-care providers, and street food vendors in any large city are examples of the ways that the informal sector works for low-income people. At the same time consumption patterns among high-income groups are characterized by custom-produced designer clothing, luxury homes, gourmet food, and many personal services. High-income households hire limousine services, live-in nannies, and private cooks. These examples illustrate how the needs and wants of the high-income people are coterminous with the expansion of the informal sector. Not for Love or Pleasure: Sex Work in the Global Economy Consumption patterns vary by both income status and by gender. The sex industry is a paradigmatic example of gendered consumption: the needs and wants of men create the demand for sexual services from women, men, and sometimes children. Prostitution has been the subject of heated debates among feminists. Some see it as inherently sexist, degrading, and humiliating. In this view, prostitution rationalizes male dominance and encourages violence against women, and it should be abolished. Others have seen it as a liberating choice. In this view women should be able to use their bodies as they wish, including selling their sexual services. As feminist economists, we take a different view, one that regards the sale of sexual services as a type of work. Dickens Redux 119 Our interest is in understanding the working conditions of the industry and its place...