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Wage Work and Labor Market Systems: Lessons from a Global E-discussion

Authored by

Luis E. (Lucho) Osorio-Cortes
Luis E. (Lucho) Osorio-Cortes
Markets Systems Specialist

Luis E. (Lucho) Osorio-Cortes is a markets systems specialist at Practical Action Consulting and the BEAM Exchange.

He has more than 15 years’ experience in international development and specializes in the facilitation of market systems development and organizational 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. Lucho’s post was developed as a courtesy of the BEAM Exchange; an expanded version is available here.

In May and June 2015, the DFID- and SDC-funded BEAM Exchange and the USAID-funded Leveraging Economic Opportunities (LEO) Project organized a three-week long global e-discussion structured around the following themes:

  • Linking rural wage labor and poverty reduction 
  • Migration and structural transformation
  • Results measurement and theories of change

Facilitated by leading wage labor experts and senior representatives from USAID, DFID, the World Bank, ILO, SOAS, FAO, MSU, and implementers, the conversations involved more than 220 top-thinkers, researchers and practitioners from 38 countries, as well as many people interested in exploring the topic for the first time and learning more. This e-consultation built in part off the recent work by the LEO project around wage work and poverty reduction, highlighted in this blog among others, and visualized in this infographic. A summary report is now available, presenting key takeaways, areas of agreement and debate, and highlighting bites of wisdom, experience from practice and thought-provoking commentary by participants. 

As a co-organizer of the event and an active participant, 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 labor market: In other words, reduce the gap between supply and demand of labor. Sounds good, but it's tricky: 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 marginalized workers. A systemic mind-set can also help us to detect inefficiencies that keep wages low; disconnections between labor markets and other critical systems for wage workers, such as transport, financial and health; and power dynamics that reinforce workers’ marginalization. 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 idealize rural life or how important smallholders are for macro political stability or the environment, we should not be the ones making those 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 labor 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. Check out the summary for examples from Zambia, Malawi and Uganda. 
  • Micro is also important: The idea of smallholder farmers hiring more workers sounds great on paper, except for the fact that in reality it requires organizational and management skills that most smallholders lack. Engaging job brokers and technical institutes are two strategies shared by organizations such as Helvetas in the Balkans.
  • Counting — and analyzing — 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-organized networks and associations; and curricula of training institutions. Check out the Week 3 discussion in the summary for sample indicators and examples of how other organizations are tracking and defining employment and systemic changes in the labor market.

What do you think? If you participated, please share your lessons, insights and questions in the comments section below.