A Socio-Economic Study of Informal Sector Workers of Dhaka City

Topics: Informal sector, Employment, Minimum wage Pages: 6 (1382 words) Published: October 4, 2012
Bangladesh e-Journal of Sociology. Volume 9, Number 2. 2012


A Socio-economic Study of Informal Sector Workers
of Dhaka City
Md. Nazmul Alam*
Abstract: Informal sector is a very important area of the economy for any developing country; it is a growing occupational sector for the less skilled people, living both in urban and rural areas. Considerable amount of employment are ensured by this sector. What is specific to the informal economy is the absence of rights and social protection of the workers involved in it. Living in extensive poverty; exploited, with no place to go for protection; lacking access to basic social services; no basic safety conditions at work; holding little or no hope that life can be better; struggling on a daily basis just to survive, they are street vendors, wage labourers working in small enterprises on a regular, casual or contract basis; unpaid workers including family workers and apprentices, home-workers, paid domestic workers and more; and a smaller number are the owners of tiny enterprises. This study concentrates on the workers and their work life and living standards.

W hen the rural migrants and urban dwellers are not provided enough job opportunities by the modern sector, they find employment in small scale, micro level production and distribution of goods and services in the informal sector. According to the ILO (1998: June), the informal sector consists of “small scale, self employed activities, mostly at a low level of organization and technology with the primary objective of generating employment and incomes”. These activities are usually conducted without proper recognition from the authorities and escape the attention of the administrative machinery responsible for enforcing laws and regulations.

Kith Hart’s (1973) introduced the terminology “informal sector”, based on a research in a low-income neighborhood in Ghana. Hart argued that informal sector provided a wide range of low cost, labor intensive, competitive goods and services and recommended that the Kenyan government should promote the informal sector (ILO, 1972: 223-32). Kabra (1995), noted thirty terms including the

survival sector, non-structured sector, and transitional activities which have been and/or are currently used to describe the informal sector. Amin (2002), compiled several terms which have been used to represent the informal sector/economy by different authors. Despite the heterogeneity of the informal economy, workers of the informal sector can be grouped into several basic employment categories, (i) Employer (ii) Self-employed and (iii) wage workers (Chan, 2005:20)

In 2003, the International Conference of Labour Statisticians adopted guidelines to expand the definition to include informal employment. Under the new definition, the informal economy is seen as comprised of all forms of “informal employment” – that is, employment without formal contracts (i.e., covered by labour legislation), worker benefits or social protection – both inside and outside informal enterprises (Chan, 2005:23).


Senior Monitoring & Evaluation Officer, HIV and AIDS Programme, ICDDRB. tuhin.nazmul@icddrb.org

Bangladesh e-Journal of Sociology. Volume 9, Number 2. 2012


There are many debates about the definition & characteristics of the informal sector. Bryan Roberts (1976) observes two characteristics signifying to the informal activities. •

They are labor intensive;

They avoid formal state supervision and regulation.

These two characteristics combine to reduce substantially the input costs of goods and services, thereby cheapening the price of the outputs. Long and strenuous hours contributed by the individual owner, by unpaid kin and others, absence of state supervision and regulation, greater ease in avoiding taxation, avoiding rigidities of labor legislation, rare payment of official minimum wage and 1

inadequate access to health insurance, unemployment...
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