Informalization from Above, Informalization from Below: The Options for Organization

by Jan Theron

Abstract

The paper examines different strategies for the collective organization of informal workers, on the basis of a number of empirical illustrations from South Africa. It argues that the situation of workers in the informal economy is best understood in terms of two inter-related processes. The first is  “informalization from above,” whereby employment is increasingly externalized, resulting in a layer of workers ostensibly located in the formal economy to whom labor standards increasingly do not apply.  The second, “informalization from below,” is manifested by the expansion of self-employment and survivalist activities. The dominant form of membership based organization in South Africa has been trade unionism. For reasons that are canvassed in the paper, however, trade unions have not been able to respond effectively to informalization from above. Trade unionism also does not represent an appropriate model of organization to respond to informalization from below. What is needed, rather, is an entrepreneurial form of organization. The paper therefore advocates a paradigm shift towards building collective organization from the bottom-up, based on a culture of self-reliance and of communal solidarity. In this context it discusses the current upsurge of new cooperatives and emphasizes the potential of the cooperative form of organization and the notion of building the social economy as a means of empowering informal workers.

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Jan Theron is a practising labour attorney and coordinates the Labour and Enterprise Policy Research Group at the Institute of Development and Labour Law, University of Cape Town. He was formerly the General Secretary of the Food and Canning Workers Union (FCWU) from 1976 until 1986 and of the Food and Allied Workers Union from 1986 until 1988.