Labour Markets
Week 16: Labour Markets
Exam Questions/Key Questions:
ESSAY QUESTION
"Active labour market policy in developing countries is inefficient and inequitable
in theory and practice." Discuss.
EXAM QUESTIONS
Assess the policy and statistical implications of increasing mobility and
casualisation
of labour in developing countries.
‘Intervening in labour markets to protect the poor is typically ineffective an often
counter-productive.’ Discuss.
Assess the view that understanding poverty dynamics requires an understanding of
employment structures and dynamics.
Is ‘unemployment’ a useful category of analysis to assess labour market
performance in poor countries?
“The standard classifications used in labour force surveys, censuses and large
surveys often fail to capture salient aspects of the work and employment experience
of the most insecure people, particularly the rural poor”. Discuss with reference to
alternative views on labour markets in developing countries.
Lecture Blurb: First, we start with a critical overview of some influential
theoretical/empirical approaches to labour markets in developing countries,
especially a contrast between neo-classical and political economy analyses of labour
relations with a focus on the relationship between wages and employment. Second,
the lecture introduces a discussion of the data and measurement problems involved
in employment studies and policies, distinguishing the un-enumerated from the
enumerated sectors of the economy in developing countries. We will particularly
stress the inadequacy of standard statistical labour categories particularly in the case
of rural labour markets in developing countries. Third, we will focus on ‘invisible’
labour markets and ‘footloose labour’, poverty and mobility in LDCs with special
emphasis on rural India and Africa. Finally, the importance of labour market
institutions and workers’ organizations will be emphasised in terms of implications
for poverty reduction.
Definitions:
A labour market is “defined as the place where labor services are bought and sold”
(Fields 2007).
Active labour market policies – started in Western Europe through government
programmes as a way of helping the unemployed find work. Active labour market
policies (ALMP) or programmes can be characterised as measures implemented to
improve the functioning of the labour market, for example the buying and selling of
labour through wage-setting mechanisms.
There are several different types of ALMP, such as investment, fiscal, education
and training policies which can be characterised in many different ways depending
on whether they are aimed specifically at risk reduction, or increasing the
employability of the unemployed: passive/active, protective/promotional etc.
However, it is generally regarded that their aim is to integrate people into the labour
market, (through improvements in their employability), and/or guarantee a
minimum level of income on which it is possible to survive; as a result, they are
often targeted at the reduction of unemployment (Jha 2009). It is therefore
questionable as to their ability to tackle labour market problems in developing
countries – see essay.
UPS (usual principal status): This method defines a person as being in the labour
force if he/she either engaged in economically gainful activities or reported ‘seeking
or being available for’ such activities for the major part of the preceding 365 days.
A person actually working for the major part of the period is counted as employed,
while a person who was either seeking or available for work for the major part of
the period is counted as unemployed.
Problems arise with this method, for example, a person identified as employed
could have been unemployed for certain days during the period, just as a person
identified as unemployed could have worked on certain days. In addition, those
classified outside of the labour force, could have worked or searched for work on a
few days during the period. Such persons are classified as USS – usual subsidiary
status participants in the labour force.
CWS (current weekly status): This method uses a reference period of seven days
preceding the date of the survey and seeks to determine the current activity status. A
person is counted as employed if he/she has engaged in gainful activities for at least
one house during the reference week. Correspondingly an unemployed person is
onw who did not work but was seeking or was available for work for at least one
hour during the reference period. (An implicit rule here is that the actual or intended
participation in gainful activities takes precedence over actual or intended
participation in all other activities – for example, a student or a housewife).
In contrast to developed countries, in developing countries such as India, the
divergence between employment statuses can be substantial. As a result, CWS is
less appropriate for determining the labour force or employment status of a person
in an economy such as India’s. A major problem is the reference period – seasonal
labourers may be able to find work during the time of the survey but not throughout
the rest of the year. Similarly, by using only one hour as the minimum working time
period, it cannot be assumed that an ‘employed’ person has earned the means to
survive.
CDS (current daily status): This method also uses a reference period of seven days,
but seeks to determine the detailed time disposition of persons on each day of the
week. A person is considered employed for half a day if he/she is engaged in
gainful activities for between one and four hours and employed for a full day if the
engagement as for four hours or more. The same rules apply as for CWS to
determine the status of employment. However, the CDS estimates are for person
days and not persons.
Underemployment: Difficult to measure and define but Ghose gives one way to
think about it, as the gap between normal, full-time employment, and the actual
level of employment over any given period of time. A way of calculating this is
could be using units of ‘labour days’, assuming that workers would want to work
for six standard days a week and finding out how many of the available labour days
remain unutilised – see Ghose pg. 5110
Key themes of the lecture:
Shift in focus from ‘labour, get lost’ towards ‘inclusive growth’ (DFID) and labour
in low-income countries.
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Trends
Neo-classical vs Marxist labour markets
Dualism, segmented labour markets, informality
Data/methodological issues
Policy priorities
South African data and debates
Labour Markets Background:
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Labour market thinking now where poverty was 30 years ago.
IMF – Trying to show the human cost of losing your job
DFID – ‘Inclusive Growth’ ie growth that is beneficial to those most
vulnerable. Starting to think about labour markets in developing countries, most
research on growth and labour markets has been in developed countries not
middle/low income. Very different situations, therefore cannot model one and
apply to the others.
Insufficient amount of good quality labour market data / frameworks /
models
Informal sector insufficiently understood and significant.
Trends in Global Labour Force:
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Greater integration through globalisation, liberalisation - increasing labour
force, the Liberal Proletariat.
Rising inequality between wages suggests productivity gains driving
growth but workers not benefitting from this growth. Manufacturing sector
rise: broken down – Top end US, bottom end Argentina/Chile. Declining
real wages for the poorest.
As you grow bigger, less to do with wages. Productivity etc.
Social protection (unemployment benefits etc) – not ubiquitous.
Quality of work available – many don’t have enough to feed their families cf
$2 a day
Pressures of globalisation leading to greater intensity of work, shorter
deadlines.
Saving costs – short-term contracts, part time work, labelling sub
contractors as self employed even though they are still dependent, GCC’s –
increasing casualisation.
Access to employment, breaking down cultural norms
Increasing land scarcity, leads to a greater number of wage-workers.
Huge differentiated labour force.
Depeasantisation, drives mobility, labour force migration. Cf migration
lectures, who actually migrates? not cost free.
Lots of trends at the global level:
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Is employment an important mechanism of poverty reduction?
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Wage labour is fundamental if understanding capitalism: Formation of a
wage labour class (freely selling their labour, not slavery etc) fundamental
part of capitalist development.
Notionally free to switch employers but mechanisms tying people down.
Marx: Capitalism turns on systematic exploitation to drive production –
informal economy, reserve army, Michael Denning – people who don’t fit in
the label of wage labour.
 Does suddenly being employed mean that you are no longer poor?
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Failure to absorb these people into the labour market, previously
dealt with through unemployed and informal sector. Alternatives?
- Why, when you have growth does it/does it not generate jobs?
Current Trends in the era of neoliberal globalisation:
Generally…
 Decreasing wage share in most LDCs and indeed worldwide since late 1970s
 Increasing wage inequality (more wage dispersion and falling real wages) –
division of the ‘transnational’ working class
 Decrease in real minimum wages
 Informalisation, everywhere, including fast-growing Asia  both selfemployment and casual wage labour rising at expense of regular wage
employment
 Global labour market increasingly tertiary (non industrial)
 Emergence of a vast “reserve army of labour” in China and India
 Fluctuations in labour's share being confined to the range of 65-75% could
disappear too  exploitation rate increasing in North and South
 Casualisation worldwide and loss of work-days in some regions
Mainly in manufacturing and urban areas…
 Loss of (formal) manufacturing employment mainly in Latin America and Africa
 Increasingly precarious working conditions also accelerate. Even in cases where
globalisation has increased manufacturing employment in manufacturingexporting countries (Asia), this increase has concentrated in un-regulated
enterprises or through ‘outworkers’
 Labour market ‘churning’ = simultaneous creation and destruction of jobs,
especially in low-skilled industries
 Feminisation of the labour force in some cases  as ‘outworkers’ through subcontracting for very low wages (India) – but women’s work remains still highly
invisible
Mainly in rural areas…
 From social negotiation to contract in labour hiring arrangements  break-down
of traditional idioms of accumulation
 Increasing land fragmentations  growing quasi-landless class,  emergence of
growing number of small agricultural employers  acceleration of social
differentiation
 Resulting process of de-agrarianization or de-peasantization  increasing
labour mobility or ‘footloose labour’
Why are labour markets relevant?
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I. Accounting for the different patterns of growth and the effects on
poverty  the poverty – employment nexus
II. Essential aspects and forces of capitalist development as it becomes more
globalised
III. Understanding predominant social relations and arenas of struggle for
resources and social reproduction
What happens with Labour Markets? Neo-classical vs Marxist labour markets:
Neo-classical understanding:
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Labour like any commodity with supply and demand determinants
Wages and employment levels depend on elasticity of supply and demand
Driven by Human Capital Theory; shaped by education and skills. Whether this
is the main way to shape labour markets e.g. through policy is debatable.
Wage as the price of labour, adjusting to reach equilibrium points. Argue
that equilibrium will be formed. However, what if prices aren’t allowed to find
an equilibrium market driven level – regulations, minimum wage, wages kept
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artificially too high? Supply kept too high, demand not there, leads to
unemployment.
What is the price/wage elasticity of supply? May vary between labour markets
and society.
Unemployment (disequilibrium) because wages ‘too high’
Solution of neoclassical economists is deregulation.
Marxist Political Economy:
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Labour and capital as social relations not as ‘things’
Reality in labour markets: exploitation and unequal bargaining power – if you
don’t pay people enough, the result is under-consumption: Undermining ability
to realise surplus value/demand. Problem affecting capitalist societies e.g.
Japan.
Distinction between free and unfree (bonded) labour: ‘double freedom’
Wage labour and labour markets as distinctive features of a capitalist system
Antagonism between capital and labour: Seen in US violence industrial
disputes; SA Trade Unions apartheid; Post WWII/Response since 1970s.
Wage as labour time socially necessary to produce goods/services for the social
reproduction of labour
Labour markets as arenas of class struggle
Competition between capitalist and non-capitalist sectors for workers  driver
of capitalist expansion
Normal Working Day – “protracted civil war” lies behind informalisation/
casualisation of labour / outsourcing (no longer bound by the same regulations,
working with the “jobless” – labour brokers): continuous struggles, derived
from how to make a profit.
Bremen: in line with neo-classical intermediataries, “jobless” lower
transaction costs (information). Sees jobless as the problem.
How are wage levels determined?
Argument: “social norms”, under language of helping, mechanisms of exploitation,
understanding reality of labour markets, cannot be determined by neat market.
Dualism, segmented labour markets, informality:
Old Development Economics – The Lewis Model, 1954
Two Sectors: Traditional sector pre-capitalist, operates as floor level for
modern and the modern capitalist sector, high productivity can often be low
labour – high demand for the reserve army.
 Main issue: growth with structural change and transitions
 From a dual economy to a fully integrated capitalist economy
“Traditional sector’ with a large mass of reserve underemployed labour
(unlimited supplies of labour)
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‘Modern sector’ with small employment pool
Industrialisation  modern sector labour demand increase  migration 
urbanisation  increase in productivity of ‘traditional sector’
Are labour markets in LDCs dualistic? Many problematic and confusing
dichotomies…
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Informal – formal dichotomy (from ILO 1973)
Regulated vs. unregulated
Organized vs unorganized
Enumerated and non enumerated (less controversial)
Skilled vs unskilled (is an illiterate carpenter unskilled?)
Urban informal sector: not so urban, not so informal, not so much of a
‘sector’
In reality: continuum of labour relations in terms of ‘informality’, security
and income level
"Unorganised workers consist of those working in the unorganised
enterprises or households, excluding regular workers with social security benefits,
and the workers in the formal sector without any employment/ social security
benefits provided by the employers".
Useful to see dichotomy:
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Wages differ primary/secondary sectors.
Mobility between the two is restricted.
Many people trapped in the secondary sector – leads to
underemployment.
Core idea: People who are comparable (idea in terms of Human Capital) are
getting different wages. There should be one price for labour markets to work
efficiently. Causes: Geography, Gender, Occupational differences. Occupational
hoarding – may have particular social mechanisms for managing.
BUT, distinct labour markets are structured differently. Wherever possible,
reducing things to the minimum number of variables to explain something.
Labour Markets in practice:
 Labour markets may not clear, are ‘imperfect’…or wages do not adjust…
 ‘Efficiency’ wages to explain above market-clearance wages - Efficiency wage
rate higher than market level. Gains in moral and nutritionally – e.g.
multinationals paying higher than local firms to the same types of people
(education etc).
 ‘Segmented’ labour markets – with different degrees of imperfections
–gender,
–skills,
–industry,
–unionisation, etc.
 Gradually new strands of mainstream economic theory now recognize the
specificity of the wage-labour relation nexus, by contrast with ‘typical’ market
relations
 Institutionally various ways in which market flexibility is meddled with.
Policy relevance: much of the debate surrounding how flexible should labour
markets be. E.g. institutional mechanisms leading to –ve results in terms of
employment, productivity.
Problems of enforcement of regulations: see Active Labour Market Policies
Wages set too high? Cf developed countries, minimum wage – inappropriate
for neoliberals.
Albert Hershmannn – “The Rhetoric of Reaction” Things that are well
intentioned a) useless b) tend to backfire. Three thesis of rhetoric of reaction:
Futility Thesis (won’t work), Perversity Thesis (Might have unintended
consequences), Jeopardy Thesis (might threaten already established benefits).
Consequences feared therefore action not taken.
Continue to see tensions at the heart of the labour market debate – not enough
empirical information.
Relevance of Labour Markets and Wage Employment:
Assumption that wage labour irrelevant to many people, especially in rural
areas – lots of people involved in wage employment but may not be money
that is exchanged or they may not be working regular hours. E.g. in rural Africa
casual labour/seasonal.
Continuum – exposure to risk/poverty and employment types. Domestic
servants often not included in surveys.
Some typical conventional stories:
Existence of ‘labour aristocracy’ encompassing ‘urban bias’ – ‘regular’ or ‘formal’
workers insulated from a mass of unregulated labour
Rigidity in labour markets  poor people excluded  need for labour market
flexibility  capital rules employment
The rise and fall of trade unions:
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Post-1945 rise  Lobbying governments, collective bargaining and
regulating supply to increase security and remuneration
From 1970s demonised by governments and neoliberal economists as
‘rigidities’ for employment creation  “labour get lost”
Move away from collective bargaining to individual and firm-level
arrangements/bargaining
Non-wage forms of remuneration expand and protection substantially cut –
militant base shrank
Mobility and footloose labour:
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Migration historically key aspect of capitalist development and labour
market formation
Global scale but uneven - economic and forced migration…but barriers to
migrate (to some places) remain big
Rural-rural seasonal / rural-urban / regional / international  connected to
labour market fragmentation
High mobility costs and social differentiation with variety of outcomes 
remittances linkages, footloose labour and ‘brain drain’
Increasing labour market flexibility  increasing required mobility  workers
in search of better jobs / capital in search of (more exploitable) labour
Labour force diversification (through migration) as mechanism of labour
control and exploitation
Are labour markets and wage employment relevant for poverty reduction anyway?
In some developing regions (Africa) Labour Markets (wage labour) does not receive
much attention.
Why?
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Perception/assumptions about labour market participation of poor/poorest
people
Factor endowments (relative land abundance)
Idea of ‘labour aristocracy’ / wage labour = formal economy salaried work
Evidence in many other countries contradicts this image (e.g. India)
Problems and biases in data collection on labour / employment (see below)
Forms of employment and poverty risk: Figure from unifrm.org shows how the
level of poverty risk increases as the regularity and formality of work decreases.
Occupation and power:
Lerche 2009 looking at occupational hierarchies in India – highlights the blurred
boundaries between labour categories. For example, there is much more to the
informal sector than just one category. Cf. Informal Sector lecture TPP pyramid.
Conceptual and empirical problems:
‘Labour force approach’ relevant to 1930-40 Europe/US when unemployment was
main issue  the concept and definition of (open) unemployment is
problematic:
–Too many dimensions in one indicator
–Different data sources
Not context-specific  not useful as performance indicator (of job availability)
Is unemployment a useful indicator?
Are they comparable across countries/regions? Very crude indicator for example
Southern Africa higher rates than Western Africa – is this necessarily true? C.f.
Ghose reading – unemployment a luxury the working poor cannot afford.
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Labour force concepts designed for industrial societies.
Employment/unemployment used. Suitable for developed countries but
inappropriate for development countries.
In absence of developed social security systems, ‘poor’ cannot afford to be
unemployed - But under-employment more relevant – see Ghose 2004.
Self-employment as residual statistical category - “Self-employment”
category doesn’t account for intricate complexities.
Often people don’t just have one source of income. Might depend on
remittances.
Household definitions different.
Need to redesign questionnaires, don’t just target main source of
income/employment. Number of days of employment, per worker, per week, living
conditions (cf china documentary) etc.
Data/methodological issues:
Something happening behind the data: recording/surveys need to be more efficient,
perhaps more people can afford to be unemployed due to greater forms of social
protection. Data therefore doesn’t get you very far. Varying type of statistical
collecting needed.
More interesting indicators of LM performance and poverty:
– Casual wage employment growth
– Person-days of employment per worker per week
– Percentage of regular employees in all employed
– Growth of real wages for casual labour in agriculture
– Wage rate for female casual labour relative to male casual labour
Data Collection Issues:
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Distinction between ‘primary’ and ‘secondary’ activity  bias towards reporting
own-account farming in rural areas; problem of occupation multiplicity
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Bias against reporting many forms of employment as wage-employment 
cultural and political biases / social stigmas
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Inadequate classifications of occupations and status (lack of specificity)
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Huge diversity of own-account activities and need for disaggregation
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Distinction between house-domestic work and unpaid family work, especially for
women
Alternatives for data collection:
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Avoid ‘main’ activity definitions, record all activities
Combination of different methods, like in India (Ghose article – see
definitions at the beginning): ‘usual principal status’, ‘usual subsidiary status’,
‘current weekly status’, ‘current daily status’.
More detailed, clearer questions on timing and rates of wage labour
arrangements. Combination/range of questions.
Greater training needed for collectors.
Bear in mind stigmas about particular occupations and likely under-reporting social desirability bias. Possibility of distortion of information for social
status/prestige reasons or reality.
Adapt occupation categories to local conditions
Need for open-ended questions to give details of occupation, wages, relations
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with employers, etc.
More qualitative research / employment histories
Not just activities but relationships, arrangements/mechanisms. Role of migrant
labour – S.Africa mining.
How can better data help make (rural) labour markets relevant to the understanding
of poverty dynamics?
Methods described above can help us understand ‘invisible’ labour markets and the
following features:
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Casual arrangements
Seasonal patterns
Wide range of wage rates (hiring with implements)
Work parties (social obligation?)
Growing importance of non-farm employment
Determinants of female labour participation
Personal patronage and employer paternalism (free labour?)
Also identify prevalent forms of labour control:
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Rental arrangements / sharecropping
Debt bondage
Control over means of production / inputs / techniques (out-working)
Use of migrant labour
Division by gender and tasks
Discretion in task-based piecemeal labour arrangements
Use of wage and non-wage benefits, deductions, etc.
Threats of dismissal, eviction, etc.
Physical coercion / violence
Patriarchy and female and child labour participation
Policy implications/priorities: Until recently, rural labour markets not regarded as
important.
‘Making the rural labour market a more effective pathway out of poverty is thus a
major policy challenge that remains poorly understood and sorely neglected in
policy making’
(World Bank 2007)
WB solution: ‘to encourage formality while maintaining flexibility’
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Improving large-scale data collection on labour markets  new pro-poor
statistical agenda
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Making use of micro-level research to inform policy for less vague policy
options
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Sector and public investments to boost employment through demand linkages
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Influencing labour demand (incentives, investment, disciplining capital, etc.)
Policy interventions and bargaining power:
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Strengthening labour market institutions, ‘voice’, regulation, determine demand
etc 
– strengthening trade unions,
– collective bargaining and
– Institutions for economic security (basic income grant)
They all potentially carry not only economic but also political benefits in the longterm
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Minimum wages can work for poverty reduction especially where casual wages
are very low but needs enforcing – see Mozambique Cramer 2006.
South Africa: (1995-2003 Post Apartheid):
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Betting on foreign investment, coming in and driving growth.
Service sector has driven large amount of growth seen – supported by
insecure work, outsourcing etc.
Two measures for unemployment: Those hunting for food etc, ie those
who have given up looking for employment, not unemployed.
Around 40% unemployed in S. Africa.
Almost half are young black south Africans, never had a waged job.
Within sectors wage labour has decreased. Solution was to deregulate
and get rid of protections – employers do not enforce/apply regulation.
Labour markets more flexible than most OECD countries.
Alternative causes/explanation:
- Real source of macroeconomic policy
- Structure of capital intensive mineral complex
- Brokers “self-employed” contractors, sacked and hired.
- Exclusion from labour markets not necessarily the problem – it is the way
that they are included.
- Broader industrial policy base to drive demand, possible solution to reduce
rurual poverty.
- Land distribution? Constraints of farming, work on the labour market?
Extent to which people are already dependent on wage labour.
Active labour market policy – started in Western Europe through government
programmes as a way of helping the unemployed find work.
Therefore inappropriate for developing countries – works on the assumptions that
labour markets work in the same way, same categories etc. unemployment a luxury?
Literature:
CORE READINGS
Standing, G. (2006) ‘Labour markets’ in Clark D.A. (ed.) The Elgar
Companion to Development Studies, pp. 323-328, Cheltenham: Edward Elgar.
Really useful article, not that long, but I have left it at home… so will be writing
some key points in due course…
Damiani O. (2003). ‘Effects on Employment, Wages, and Labor Standards of
Non-traditional Export Crops in Northeast Brazil’, Latin American Research
Review 38 (1): 83-112.
This article provides a case study of North-Eastern Brazil, and the effects of the
introduction of non-traditional, export-orientated, high-value crops such as fruits
and vegetables on employment, wages, and labour standards. The potential gains
which could be made through the implementation of policies aimed at improving
rural wage-labour opportunities for the improvement of conditions for the working
poor, such as through the cultivation of more labour-intensive crops such as cotton,
have also been highlighted by Sender, Cramer and Oya 2005. In this case, the
production of these crops was accompanied by an increase in jobs, the up-skilling of
labour, and improvements in wages and labour standards among rural wage
workers.
Ghose A. (2004) ‘The Employment Challenge in India’, Economic and Political
Weekly (November 27th)
Ghose highlights that the employment problem in India revolves around the
working poor and therefore this should be the focus of policy measures. He
highlights that the problems of child labour and gender inequality in the work place
can be addressed through:
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Reducing the level of underemployment
Increasing the real wage rate for casual labour
Facilitating the transfer of poor self-employed/casual labourers into regular
wage paid jobs.
“It is quite clear that a combination of low wage and high underemployment
generates the observed widespread poverty among casual labourers”(pg. 5110).
The priority is therefore to generate a steady process of labour transfer – with an
appropriate level of newly created low-skilled regular wage paid jobs.
A word on data:
Very important to acknowledge how different types of data collection can affect the
outcomes of that data:
 Very few people have regular, full-time wage employment in developing
countries, the vast majority work on an irregular basis, either as self employed or
casual wage-labourers.
 As there is no well-developed system of social security, unemployment is not
an option except for the well off. “The poor have to work in order to survive,
even when the return from this work is inadequate for basic subsistence” Ghose
2004 pg. 5106.
 Ghose argues that these facts imply that Say’s Law of employment prevails:
supply of labour creates its own demand. In these circumstances, standard
indicators such as growth in the number of people in employment or changes in
the rate of employment do not tell us much about employment trends or
conditions.
Other points to note from the article:
 In India, the labour force participation rate of the adult population is low – this
can be explained by the low labour force participation of women. Women take
principle responsibility for the housework and therefore only seek work
intermittently – if housework were counted as a gainful activity, women’s
participation rate actually turns out to be higher than men’s. In addition,
housework contributes much more to family welfare than it does in high-income
countries – it can be categorised by a large amount of activities such as the
collection of free goods (fruits, vegetables, tables, firewood, cattle feed, drinking
water) and activities such as cattle tending, knitting, tailoring and weaving, many
of which are either available for purchase or supplied by paid employees in
developed countries.
 Child labour – not necessarily a case of children missing schooling because they
are put to work, or that all children who don’t attend school work, “only a small
percentage of those children who are not attending education institutions actually
work” (pg. 5108), “the choice is not between schooling and work, it is between
idleness and work” (ibid.). The absence of adequate publicly funded facilities for
schooling is a large factor contributing to why many children do not go to school
regularly.
 A large majority of the self-employed and casual labourers work in agriculture,
while a large majority of the regular employees are in industry. Implications for
Structuralist arguments of comparative advantage.
 The type of employment people engage in also corresponds closely to the level
of education of workers – see Sender, Oya and Cramer Mozambique case-study
2006.
 The type of employment is also a good indicator of poverty status – there is a
large category of working poor in India which mainly consists of casual wage
labourers and the self-employed; “for nearly one-third of those in employment,
earnings from employment are inadequate to guarantee a consumption level, for
themselves and their dependents, on or above the official poverty line” (pg
5109).
 Regularity of employment a key factor in whether somebody is poor or not.
 With respect to labour market policies, Ghose identifies that “Because their
domain of operation does not extend beyond the organised sector, these policies
and institutions tend to generate pressures for improvements in the quality of
organised sector jobs, already the best quality jobs available”(pg. 5114).
 Existing skill development programmes are of little help, as they are not often
geared to training persons with little or no education. Therefore, targeting the
working poor must remain an essential component of policy.
Sender, John, Carlos Oya and Christopher Cramer (2006), ‘Women Working
for Wages: Putting Flesh on the Bones of a Rural Labour Market Survey in
Mozambique’, Journal of Southern African Studies, 32, (2): 313-333.
This article presents case studies of six women working for wages in Mozambique,
their differing/similar circumstances and therefore differing/similar outcomes. One
aim of the article is to: “begin to attempt to understand the processes that cause and
perpetuate rural inequalities” (pg. 324).
Main points to be gained from the article:
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There are important methodological gains to be made if researches can cross
check quantitative survey data with qualitative data they have gained
themselves, as well as a wide range of historical and secondary factors. See
reliability of data form the lecture course. Combining quantitative and
qualitative methodology to produce more reliable data.
The authors highlight that one particular kind of worker who has been
relatively unsuccessful in the labour market is the female wage labourer –
40% of this group surveyed were divorced, widowed or separated.
Wage labour has historically been seen almost exclusively as a male
activity, however, even though there are few wage-earning opportunities for
women, the evidence from labour market surveys (e.g. 2002/3) shows that
“large numbers of women enter the market for wage labour and that this is
extremely significant in determining the ability of many households to
survive” (pg. 316).
However, within this group, the authors emphasis the heterogeneity of the
female wage worker and “warn against the dangers of assuming that all
members of rural communities in Mozambique, or rural women have similar
needs and prospects” (pg. 315).
The authors argue that new policy initiatives are needed because of the
overwhelming evidence that “poor rural women are very unlikely to avoid
recycling of poverty by means of smallholder farming and self-employment
financed by micro credit agencies” (ibid.).
Points from the case studies:
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Even formal wage labour for one woman (e.g. as a domestic servant for a
Ministry official) provided little more money than a casual wage labourer –
the effects of a reduction of public sector wages (in line with WC/SA) meant
that there were delays in the payment of wages, making it less reliable than
the casual wage labour.
A strike in Sept 2003 by teachers who had not been paid highlights that this
is a trend of the Mozambican formal workers.
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Clear evidence of generational poverty transmission; processes identified
include the effects of early marriage, and educational deprivation. The eldest
daughter of this woman had never been able to attend school, and had been
working alongside her mother since she was 10 years old - this mirrors the
life of her mother.
Domestic violence was a feature of many of these women’s relationships; as
a result, many prefer to live independently. Many husbands do not allow
their wives to work, or accompany their wives to work; in one case stated
here, joint wages were a source of dispute. Survey questionnaires, however
the authors note, are rarely an effective means of acquiring information on
the violence suffered by workers.
Small farmers/companies vs. large scale farmers/companies (including
foreign companies) – large able to pay a more reasonable wage for the
amount of work to be done, often additional benefits such as housing are
included.
Contacts very important in finding a job – especially formal employment –
many of these women were without the resources to pay bribes etc.
Minimal access to credit/NGO contact for many of these women – contacts
very important again. One did try to start producing nipa (an alcoholic drink)
and then a banana-selling stall, but she was unable to find the cash to
purchase the starting materials.
Some female workers have, however, achieved a degree of success relative
to other women – those women who had at least completed primary school,
had very much higher possession scores than other women – one form of
poverty analysis. There have however, been different opportunities for
different ages of children due to a more recent increase in resources in
comparison to previous times of conflict.
This article focuses on how permanent/decent wage employment can transform
the lives of poor rural women and children in Mozambique. It also highlights
through the case studies, the possible positive effects of migration, and the
importance of obtaining skills (for example, language skills) for the two
successful case study women.
With respect to policy, the authors highlight that neither donors nor the Government
of Mozambique have succeeded in directing infrastructural investments directly
towards farm enterprises employing large numbers of wage workers – instead,
donor policy “remains fixated on support to small farmers, who are unlikely to
generate large numbers of regular or well-paid wage employment opportunities,
and on micro-credit provision for self-employed” (pg. 333).
The authors also highlight the possibilities of focusing on wage labour intensive
crops such as cotton, although they state that many proposals for agricultural
development “fail to mention the importance of the income earned through rural
wage employment for the survival of the poorest Africans” (pg. 333).
Additional Literature:
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the Consequences of Globalization. Geneva: International Labour Office (ILO).
Cain, G. (1976). "The Challenge of Segmented Labor Market Theories to
Orthodox Theories". Journal of Economic Literature , 14 (4), 1215-1257.
Cramer, C., Oya, C., & Sender, J. (2008). "Lifting the blinkers: a new view of
power, diversity and poverty in Mozambican rural labour markets". Journal of
Modern African Studies , Vol 46, No 3, 361-392.
Davis, M. (2006). Planet of Slums. London: Verso.
De Neve, G. (2005). “Weaving for IKEA in South India: Subcontracting, Labour
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This book analyses the theoretical considerations with respect to the workings
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His main criticism of the neoliberal discourse surrounding labour markets is
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Most importantly, Fine highlights that labour markets are different to one
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of wages, conditions and careers but also in the way in which they are
structured and reproduced”. Accordingly, “Labour market theory cannot be
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combination of socioeconomic relations, processes, structures anad agents
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Ghose, A. (2004, 27-November). "The Employment Challenge in India".
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Identifies certain operational criteria – e.g. lack of social security coverage, leave
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earnings, unstable working conditions, lack of affiliation to labour organisations and
the illegal/quasi legal nature of the work performed – as things to define the
informal sector.
Idea that the formal sector relies on the informal sector in order to increase its
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necessarily accompanied by a corresponding growth in formal employments.
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