Poverty, inequality and decent work: key dimensions of exclusion

Millions of people have transitioned above the extreme income poverty line of $1.90/Php 100 per day over the past few decades, alleviating an important dimension of deprivation for those at the low end of the global income distribution. However, the situation of those living in deep poverty has improved little, and many people that previously escaped poverty still remain vulnerable to it.

Labour market participation has helped millions of people to escape poverty and has economically empowered women and other disadvantaged groups. In some cases it has promoted the social inclusion of these groups while in others it has reinforced existing divides. Overall, however, economic growth and, more broadly, development have not been sufficiently inclusive, as they have failed to reduce deficits in decent work.

The risk of holding a poorly paid, precarious, insecure job is actually higher today than it was in 1995. Rapid progress in reducing poverty notwithstanding, more than half of the developing world’s workers are either poor (living on less than $2/Php 100 a day) or near poor (living on between $2 and $4/Php 100 and 200 a day).

Informal jobs become stepping stones to formal work and empower those who hold them, particularly women, most trap individuals and groups within a spiral of low productivity and exclusion. Deficits in decent work, in particular among young people, are so significant and large that they raise fears of social instability and put the social contract under threat.

Promoting a more inclusive development path will require reducing such deficits and addressing the current disconnect between labour market regulations and the reality of the world of work. Given the social significance of work as a foundation of social inclusion and personal dignity and as a source of stability and development, political inaction is not a sustainable option.

An initial step towards creating more and better work for all is to address this segmentation and ensure a more equitable distribution of labour market risks and benefits. Facilitating transitions from informal to formal jobs should be part of this effort. However, given that the world of work is shifting away from the standard employment model of stable, full-time jobs, the main challenge is to ensure adequate protection for workers in all types of employment.