Read how Lucho came to recognise one of the key pieces of the poverty reduction puzzle: wage labour.
I remember it clearly…the snow had forced public buildings in Washington D.C. to shut and we had to find a room to discuss the latest lessons, progress and future plans of USAID’s LEO project. It was the beginning of March this year and the annual LEO Learning Day (which in reality is two days). At some point, after several cups of coffee, Bernd Mueller presented key findings from a study commissioned by LEO which takes stock of the current evidence linking employment and pathways out of poverty, with a special focus on rural wage labour (this infographic is a quick guide). Initially, I thought it was a boring topic but then it hit me! For years, I had been ignoring one of the key pieces of the poverty reduction puzzle: wage labour. Not that I wanted to ignore it; on the contrary, the more I learned about market development, the more questions about scale-up bothered me. In conferences, papers, case studies…always the same nagging question: how can we use the power of markets to reduce poverty at a large scale? I was looking for the answers; but I had been looking in the wrong places.
Since I started working in this exciting field of inclusive market systems development, I have lived in a farmer-centric universe where poverty reduction at scale happens when large numbers of marginalised smallholders improve their livelihoods. Of course, I knew about projects with a focus on off-farm employment, urban and semi-urban workers and jobs for young people and women; but I tended to view them as worthwhile oddities unrelated to my work. I am not sure why, perhaps because all those projects were focused on helping very poor people find a job while I was trying to help very poor farmers produce and sell more. The teams managing these projects were living in the job-centric universe. One thing I realised is that each universe is weak on its own. The solution? A systemic approach to markets where labour is better integrated in our strategies and treated as a key subsystem that is critical to adaptability and scalability.
I had many interesting conversations with Bernd Mueller during the LEO Learning Day and reflected on these issues for a while thereafter. Could this humble, unappealing, and seemingly boring issue of wage labour hold the keys to poverty reduction at scale? This is why I was very happy when on returning to the UK, BEAM Exchange confirmed that we were going to organise an ediscussion on this topic. And then, you can imagine my excitement when I got an email from Anna Garloch (ADCI/VOCA – LEO Project) asking us if we were interested in organising a webinar about the stock-taking paper! We immediately set the wheels in motion to make these two events a reality (watch the webinar).
The three-week ediscussion took place in May and June and was structured around the following themes:
The conversations involved more than 220 top thinkers, researchers and practitioners from 38 countries and were facilitated by leading wage labour experts and senior representatives from USAID, DFID, the World Bank, ILO, SOAS, FAO, MSU and implementers, among others. There were also many people interested in exploring the topic for the first time.
A summary report is now available, presenting the key takeaways, areas of agreement and debate, and highlighting bites of wisdom, experience from practice, and thought-provoking commentary by participants.
During those three weeks, in my role as a co-organiser and active participant, I learned many things that have already changed how I approach market systems development. Here is a sample of the lessons and insights I took away:
• More is better than better: For the poorest people, having more work is often more important to their daily fight for survival than having better working conditions. Quantity can be used as an entry point for our projects (e.g. to engage key stakeholders); however, stepping out of chronic poverty requires sustained improvements in the quality of jobs.
• Tighten the labour market: In other words, reduce the gap between supply and demand of labour. Sounds good, but it's tricky because such initiatives are beyond the reach of many of our typical market development projects (e.g. getting more children out of work and into schools and promoting migration). However, if we are aware of this, we can be more realistic about the impacts our projects can have on wages and incomes, or be more proactive at engaging government agencies that could contribute to our efforts. This is unpacked more in the summary report, especially in week 2.
• Put on the systemic glasses: Job creation does not happen only at the farm level — it happens across the whole market system. We must try to understand which market actors have the largest capacity to hire marginalised workers. A systemic mind-set can also help us to detect inefficiencies that keep wages low; disconnections between labour markets and other critical systems for wage workers, such as transport, financial and health; and power dynamics that reinforce workers’ marginalisation. The week 3 discussion on results management and M&E explored indicators and analysis tools to support this, as detailed in the summary.
• Development as freedom (to work wherever we want): No matter how much we idealise rural life or how important smallholders are for macro political stability or the environment, we should not be the ones making these decisions for others. How can we promote conditions that enable people to work and live wherever they want — on or off-farm?
• Workers unite…employers adapt! Interventions that build the collective bargaining power of workers were proposed by several participants as among the best strategies to improve labour markets. However, if employers unite, will they disengage or hamper our interventions? Not necessarily. We can help employers to adapt and improve productivity, to offset the costs of higher salaries and better working conditions, and to see the interdependency between worker satisfaction and firm productivity and net profits. For example, as explored in the summary, CARE promoted solidarity groups in Bangladesh that led to higher wages for both men and women working for farmers while supporting the latter to increase productivity to offset the resulting higher wages.
• Macro is important: It is important to keep an eye on macro trends (e.g., employment levels, migration and trade), not just on sectoral policies and standards. Week 3 explored this with some of the best thinkers out there. See the examples from Zambia, Malawi and Uganda in the summary.
• Micro is also important: The idea of smallholder farmers hiring more workers looks great on paper, but in reality it requires organisational and management skills that most smallholders lack. Engaging job brokers and technical institutes are two strategies shared by organisations such as Helvetas in the Balkans.
• Counting — and analysing — differently: Using full-time equivalent jobs was generally endorsed as a useful indicator for capturing the range of seasonal, part-time, and informal jobs. However, irrespective of how jobs are measured, it is important to understand whether or not they are linked to deeper structural changes in the broader market system. For example, access to market information; social norms that encourage women to look for meaningful jobs; institutional capacity to enforce contracts and protect property and workers’ rights; well-organised networks and associations; and curricula of training institutions. Check out week 3 in the summary for sample indicators and examples of how other organisations are tracking and defining employment and systemic changes in the labour market.
So yes, I learnt a lot in those three weeks but I also discovered how much I still ignore about wage workers and labour market systems. Many questions and dilemmas remain that left me with a bittersweet taste, for example:
• How can technology be used to increase productivity and efficiency while dealing with job losses and promoting labour-market tightening?
• How can we deal with the impacts of migration that fragment families? And how should we address the impacts of male migration on the women that stay behind?
• How can we promote institutions that counterbalance land accumulation (enabled by forced or voluntary emigration) and the political power that goes with it?
• Ultimately, are all these dilemmas rooted in a structural shift from subsistence agriculture to wage labour that is out of our control?
I hope we can continue this conversation one day; perhaps after a new round of collective musing I'll say 'hasta la vista' with a sweeter taste in my mouth; for the moment, I’ll just keep on chewing my gum.
Luis E. (Lucho) Osorio-Cortes is a markets systems specialist at the BEAM Exchange and Practical Action Consulting. He has more than 15 years’ experience in international development and specialises in the facilitation of market systems development and organisational learning. Lucho coordinates The Market Facilitation Initiative (MaFI), a working group of the SEEP Network helping practitioners to become more effective facilitators of inclusive market development programs. A shorter version of this blog is available on USAID’s Microlinks.