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Paid informal work in deprived neighborhoods
Pergamon
PII: S0264-2751(00)00024-X
Cities, Vol. 17, No. 4, pp. 285–291, 2000 2000 Elsevier Science Ltd. All rights reserved Printed in Great Britain 0264-2751/00 $-see front matter
www.elsevier.com/locate/cities
Paid informal work in deprived neighborhoods Colin C. Williams* Department of Geography, University of Leicester, Leicester LE1 7RH, UK
Jan Windebank Political Economy Research Centre, University of Sheffield, Sheffield S10 4GD, UK
In advanced economies, work beyond employment has been viewed very differently depending upon whether it is paid or not. Whilst unpaid work, especially voluntary work, has been perceived as something to be nurtured in order to rebuild trust and reciprocity in communities, paid informal work has been viewed as exploitative work conducted under sweatshop conditions that needs to be eradicated. Using evidence from deprived urban neighborhoods in Britain, however, this paper reveals that only a minor part of paid informal work involves exploited informal employees working in sweatshops. Instead, most paid informal work is conducted on a voluntary basis for kin, neighbors and friends for social rather than economic reasons. In consequence, much paid informal work is conducted under social relations akin to the unpaid community exchange that many wish to nurture. The policy finding, however, is not merely that a more laissez-faire approach is required towards such work. Given that the poorest benefit least from such sources of informal support, this paper asserts that the challenge for policy is to identify vehicles for harnessing it amongst such groups. The paper thus concludes by outlining one potential means – Active Citizens’ Credits – by which this might be achieved. 2000 Elsevier Science Ltd. All rights reserved Keywords: Informal sector, Britain, Reciprocity, Time dollars, Mutual aid
Introduction
employment (DSS, 1998; Commission of the European Communities, 1998; ILO, 1996; OECD, 1994) and/or highly exploitative work (Amin, 1996; Castells and Portes, 1989; Frank, 1996; Mingione, 1991; Portes, 1994; Ybarra, 1989). Indeed, these contrasting policy approaches towards unpaid and paid informal work are now so widely accepted throughout all advanced economies that few have sought to question their validity. Here, however, empirical evidence of paid informal work in British deprived urban neighborhoods is drawn upon to question whether such distinct approaches should be maintained. Focusing upon paid informal work, this will reveal that contrary to the dominant caricature, such work in deprived urban neighborhoods does not mostly involve exploited informal employees working in “sweatshops”. Instead, most paid informal work in these neighborhoods is conducted on a voluntary basis for their kin, neighbors and friends for social rather than economic reasons. The
Throughout the advanced economies, policy approaches towards work beyond employment significantly vary depending upon whether this work is paid or not. On the one hand, it is advocated that unpaid work, especially voluntary work, needs to be nurtured in order to rebuild trust and reciprocity in communities (Etzioni, 1993; Putnam, 1995). On the other hand, however, and in stark contrast to unpaid work, the overwhelming consensus is that paid informal work needs to be eradicated. Viewing it as work conducted under sweatshop conditions by marginalized groups as a survival strategy (eg Button, 1984; Kesteloot and Meert, 1999; Lagos, 1995; Maldonado, 1995; Rosanvallon, 1980), this work is seen to represent either unfair competition for formal *Corresponding author. Tel: 44 116 252 5242; fax: 44 116 252 3854; e-mail: [email protected]
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important finding, therefore, is that most paid informal work is conducted under social relations more akin to those forms of unpaid work that many wish to nurture. Here, however, the policy finding is not merely that a more laissez-faire approach is required towards such work. Showing that the poorest sections of society are the least able to benefit from such sources of informal support, this paper will assert that the challenge for policy is to identify vehicles for harnessing it amongst such groups. The paper thus concludes by outlining one potential means – Active Citizens’ Credits – by which this might be achieved. Before commencing, however, it is first necessary to define what is meant by paid informal work. In recent years across the social sciences, it has been argued that social and economic restructuring, together with government policies, have led to the creation of a large and growing sphere of paid work beyond the realm of formal employment. The consensus in the literature is that this paid work, variously referred to as the “underground” sector, “hidden” work or the “shadow” economy to name but a few of its titles (see Thomas, 1992; Williams and Windebank, 1998), involves the paid production and sale of goods and services that are unregistered by, or hidden from the state for tax, social security and/or labor law purposes, but which are legal in all other respects (Commission of the European Communities, 1998; Feige, 1990; Portes, 1994; Thomas, 1992). Paid informal work, therefore, includes all legitimate activities where payments received by individuals are not declared to the authorities. It does not include those illegal activities where criminal aspects are involved beyond the non-declaration of income (eg drug peddling).
Examining paid informal work in deprived urban neighborhoods In order to investigate the nature of paid informal work in deprived urban neighborhoods, in 1998, structured interviews were conducted with 400 households in such neighborhoods in two British cities, Southampton and Sheffield. The former is a successful service-oriented economy with low unemployment rates in the affluent south-east of Britain, whilst the latter is a poorer northern city, once famous for steel making but now suffering high rates of unemployment. In both cities, two types of deprived neighborhood were studied: an inner city neighborhood on the eastern fringes of the central business district, composed of mostly private sector housing and with the highest concentration of ethnic minorities in the city; and a neighborhood of mostly social housing, locally viewed as a “sink” estate. High unemployment and chronic social problems characterize all four areas. These localities were chosen for study because they are precisely the types of neighborhood identified by Green and Owen (1998) where non-employment, 286
unemployment and inactivity are highest in Britain and which are slipping ever further behind other areas in terms of employment rates. Examining the employment profiles of the 400 households surveyed, the extent of non-employment in these deprived neighborhoods and how this is grossly under-estimated in conventional unemployment statistics is revealed, as is the sheer size of the gap that needs to be bridged if full-employment is to be achieved in these neighborhoods. Just 34.9 per cent of the 870 adults surveyed had a job (41.0 per cent of men and 29.5 per cent of women). Moreover, 53.5 per cent of the households were jobless compared with 35.6 per cent nationally according to Dunford (1997). As a result, the vast majority of the households surveyed were on a low-income. Examining their total weekly household income before tax and other social contributions, 69.5 per cent had a gross income of less than £250 (c. US$380) per week and 80.0 per cent of households less than the approximate individual (not household) British average full-time wage of £365 (c. US$566) per week. The aim of the research was to investigate the nature and extent of their informal economic activity so that the possibilities for developing such activity could be explored. To do this, a modified version of the successful survey technique first pioneered by Pahl (1984) was employed. Using a list of 44 common household tasks (including home improvement and maintenance, routine household work and caring), households were asked whether each activity had been undertaken during the previous 5 years/year/month/week (depending on the activity). If so, they were asked: who undertook the work (eg a household member, relative living in another household, neighbor, friend, firm); whether they were unpaid or paid; and if paid, whether they were paid “in-kind” (eg a gift), “cash-in-hand” or formally. This enabled the work to be categorized into self-provisioning, unpaid community exchange, paid informal work or formal employment. The same task list was then used to elicit the nature and extent to which household members had conducted work for other households. If so, they were asked who had undertaken the work and whether it was unpaid, or whether they received payment in-kind or “cash-in-hand”. Although customers did not necessarily know whether money was declared or not, previous research using this technique reveals that when the results from households as customers and suppliers are compared, the same levels of informal activity are identified, meaning that the technique does not suffer from under- or over-reporting by respondents (eg Leonard, 1994; Pahl, 1984). Indeed, this was also found in this survey suggesting that the data is relatively reliable. To ensure that all paid informal work was included and having established a rapport with the respondents, additional open-ended questions were asked about any other undeclared work conducted for, or supplied by, households or
Paid informal work in deprived neighborhoods: C C Williams and J Windebank
firms in order to pick up the extent to which the residents of these deprived urban neighborhoods might be engaged in sweatshop activities or purchasing their products. To understand the motivations of suppliers and consumers of paid informal work, meanwhile, consumers were asked in an open-ended manner why they had used that particular source of labor to get the task completed and suppliers of paid informal work were asked why they had undertaken such activity whenever this was the case.
Extent and character of paid informal work in deprived urban neighborhoods The first striking finding of this study is the limited degree to which formal employment is used to undertake activities. Just 15.2 per cent of all the tasks surveyed were conducted using formal employment. The remainder (84.8 per cent) was undertaken using informal modes of provision. Examining the forms of informal work employed, some 76.1 per cent of all the work was undertaken on an unpaid basis by household members, whilst community exchange in the form of unpaid labor from other households was used to conduct 3.8 per cent of the tasks. Paid informal work, meanwhile, was used to conduct the remaining 4.9 per cent of the tasks. Some tasks, however, were more likely to be undertaken using paid informal work than others. As Table 1 shows, the tasks households were most likely to have had undertaken using paid informal work were window cleaning (received on a paid informal basis by 8.7 per cent of all households), hairdressing (7.8 per cent), car repair (7.8 per cent), maintenance of appliances (6.0 per cent), plumbing (5.8 per cent) and baby-sitting during the daytime (5.0 per cent) and evening (5.0 per cent). Examining what types of activity constitute the majority of paid informal work, meanwhile, seven tasks comprised just under half (45.2 per cent) of all paid informal work. These were window cleaning (8.6 per cent of all paid informal work), hairdressing (7.6 per cent), car repair (7.6 per cent), plumbing (5.7 per cent), maintenance of appliances (5.9 per cent) and baby-sitting during the day (4.9 per cent) and evening (4.9 per cent). Who, however, conducts such work and why? Do marginalized groups conduct such work under exploitative conditions as a survival strategy or are other social relations involved? To begin to answer these questions, it is first necessary to explore who supplies this work. Less than a third (29.2 per cent) of paid informal exchange received by households surveyed in these deprived neighborhoods used formal firms or self-employed people not known to them who they assumed were not declaring their incomes. Principally, this work mostly involved house maintenance (eg outdoor painting), home improvement (eg plumbing), hairdressing, window cleaning and car repair. Instead, the vast majority (70.8 per cent) of paid
informal work received by households is conducted by close social relations. First, there is the situation where a friend or neighbor is paid either cash-in-hand (24.6 per cent of all paid informal services) or given a gift in-lieu of money (8.9 per cent); second, there is work where kin not living in the household are paid either cash-in-hand (16.2 per cent) or given a gift (8.9 per cent) for doing the work, and finally and sometimes overlooked, where a household member is paid to do the work (12.9 per cent) or given a gift (3.2 per cent). Paid informal exchange, therefore, is more often than not a transaction between a customer and supplier who have close social relations rather than between an anonymous buyer and seller. In other words, it is a form of work that is conducted more in the private than the public sphere. What are the social relations, however, under which this work is conducted? Are these participants engaged in work of an exploitative nature or are different social relations involved? Motivations for using and supplying paid informal work To answer these questions, we here investigate the motivations of people for both using and supplying work on a paid informal basis. So far as users of such work are concerned, although this work was used primarily as a cheaper alternative to formal employment when firms (composed mostly of men) are employed, this was not the case when closer social relations were involved, which mostly involved women. Here, instead, “community-building” rationales predominated. For example, paid informal work was used as a means of developing or maintaining social networks. This is unsurprising. After all, exchange remains the principal nexus through which social relations are forged and maintained in contemporary society (Morris, 1995). To a lesser extent, “redistributive” rationales also predominate, such as when money was provided to kin such as children, a sibling or parent, since it was often a way of giving them much needed spending money whilst avoiding any connotation of charity. Hence, paid informal work is not simply used as a means by which users can save money by getting a good and/or service cheaper than if they had to pay a formal business, as popular prejudice often assumes. Other more socially orientated rationales also exist for using paid informal work. For informal workers, meanwhile, although economic motivations were central when individuals worked for firms “on the side” or engaged in selfemployed activity for people they did not know well, this was not the case with closer social relations. First, there are again “redistributive” rationales. For example, they knew that a person needed a job doing but that they could not afford to pay a formal business to do it. They thus offered their craft skills to these close social relations for a fee well under the market price. In no cases, however, was this work offered for 287
Paid informal work in deprived neighborhoods: C C Williams and J Windebank Table 1
Paid informal work in deprived urban neighborhoods % households doing task
All house maintenance (last 5 years) Outdoor painting Indoor painting Wallpapering Plastering Mending broken window Maintenance of appliances All home improvement (last 5 years) Double glazing Plumbing Electrical work House insulation Put in bathroom Build a garage Build an extension Convert attic Put in central heating Carpentry All routine housework (last week) Do housework Clean the house Clean windows Spring cleaning Do the shopping Wash clothes/sheets Ironing Cook the meals Wash dishes Hairdressing Administration All making and repairing goods (last year) Make clothes Knitting Repair clothes Make furniture Make garden equipment Make curtains All car maintenance (last year) Wash car Repair the car Car maintenance All gardening (last year) Indoor plants Outdoor borders Outdoor vegetables Lawn mowing Caring (last month) Baby-sitting (day) Baby-sitting (night) Courses (eg piano lessons) Pet care All
% using paid informal % of all paid informal No. of times exchange exchange conducted using paid informal exchange
51.1 44.2 61.2 68.0 33.7 20.7 53.7 19.2 24.5 46.0 33.2 18.2 10.5 1.2 2.5 1.0 8.0 46.7 89.2 100.0 81.5 84.2 87.3 100.0 93.5 100.0 100.0 40.2 95.5 18.6
7.9 10.2 6.9 5.9 11.8 7.2 11.1 10.1 7.1 12.5 11.8 1.4 23.8 0.0 0.0 25.0 9.4 9.1 2.9 2.2 1.8 10.4 2.3 100.0 1.0 1.3 1.2 1.0 7.8 0.5 2.2
23.9 4.4 4.2 3.9 3.9 1.5 5.9 19.2 1.7 5.7 3.7 0.2 2.4 0.0 0.0 0.2 0.7 4.2 28.1 2.2 1.5 8.6 2.0 1.3 1.0 1.2 1.2 1.0 7.6 0.5 2.5
97 18 17 16 16 6 24 78 7 23 15 1 10 0 0 1 3 17 114 9 6 35 8 1.2 4 5 5 4 31 2 10
13.7 16.3 55.2 8.0 0.7 17.7 45.0 47.5 40.0 47.5 42.7 67.5 52.7 8.2 42.2 33.2 43.5 42.5 2.5 44.2 46.1
0.0 0.0 0.4 6.2 33.0 8.4 9.1 5.8 19.4 3.7 2.0 0.4 2.8 0.0 4.1 8.1 11.5 11.7 0.0 1.7 4.9
0.0 0.0 0.2 0.5 0.2 1.5 12.1 2.7 7.6 1.7 3.4 0.2 1.5 0.0 1.7 10.6 4.9 4.9 0.0 0.7 100.0
0 0 1 2 1 6 49 11 31 7 14 1 6 0 7 43 20 20 0 3 405
free. A fee was charged which although well above constituting a token gesture was well below the normal market price. For other suppliers, however, who were normally unemployed or early retired, such work was undertaken for those who seemed to have less free time (eg multiple-earner households) and they saw themselves as providing a service to “timestarved” people they knew at a price well below the 288
market value. Consequently, and as stated above, whilst the customers in these cases frequently possessed rationales based on redistributing cash to these people, the suppliers saw themselves as helping out by giving their time. This “trade” between “time rich– money poor” and “money rich–time poor” people, therefore, far from being seen as exploitative in the eyes of the participants, was more perceived as
Paid informal work in deprived neighborhoods: C C Williams and J Windebank
involving mutual reciprocity. Each partner was giving the resource that they possessed in relatively greater amounts to the other in order to get a task completed. Besides these redistributive rationales, there are again community-building rationales involved in undertaking paid informal work. For example, many of those involved offered their services as a means of maintaining and forging social networks. For them, offering to do a job informally for a small payment was a way of mixing with and helping people they knew and at the same time, making a little money on the side. The majority of paid informal work, in sum, is undertaken for kin, neighbors and friends and involves social objectives rather than a strictly economic utilitarian rationality. As such, paid informal work is similar to formal employment, which is also conducted for a range of reasons, many of which are social rather than purely economic. Who, however, engages in such work? The distribution of paid informal work Jobless households, despite representing 53.5 per cent of the households surveyed, conducted just 38.9 per cent of all paid informal work. Multiple earner households, meanwhile, representing just 23.5 per cent of the sample, undertook 27.9 per cent of all paid informal exchange and single-earner households (23.0 per cent of the sample), the remaining 33.2 per cent of paid informal work. Contrary to the nostrums of the “marginality thesis”, therefore, which views paid informal work as an exploitative peripheral form of labor undertaken mostly by marginalized population groups as a survival strategy (eg Button, 1984; Lagos, 1995; Maldonado, 1995; Rosanvallon, 1980), such work was supplied more by relatively affluent households. Paid informal work, therefore, is not only conducted for social as much as economic objectives, even in these deprived neighborhoods, but neither is it conducted by mostly marginalized groups as a survival strategy. When the character of the paid informal work undertaken by multiple- and no-earner households is compared, moreover, some stark disparities emerge. Where members of jobless households engage in such work, it was repeatedly found that these were poorly paid one-off jobs. Multiple earner households, meanwhile, are more likely to be engaged in regular better paid informal work, frequently using the skills and contacts acquired in their formal employment. For example, the average price received for engaging in paid informal work amongst members of no-earner households was £2.50 per hour compared with £4.75 per hour amongst employed people in multiple earner households. Therefore, and similar to the formal labor market, there appears to exist a segmented informal labor market in which there are well-paid “core” informal workers, who are also mostly formally employed, engaged in relatively autonomous wellpaid activities and “peripheral” workers, who are
mostly unemployed, engaged in poorly paid activity. This, moreover, applies not only to paid informal work conducted in the private realm, but also that undertaken in the public realm. Hence, paid informal work is disproportionately conducted by employed households whose work is better paid than those in no-earner households. In the next section, therefore, we examine the policy implications of these findings.
Policy implications Given that paid informal work is mostly conducted on a voluntary basis for kin, neighbors and friends for social rather than economic reasons under social relations more akin to the unpaid work that many wish to nurture in order to promote reciprocity and trust, it is here suggested that it would be inappropriate to continue to seek its eradication. This does not mean, however, that a laissez-faire approach is required towards such work. Above, we have shown that it is the poorest who benefit least from such sources of informal support. Consequently, the challenge for social and labor market policy is more to identify vehicles for harnessing it amongst such groups as a means of developing reciprocal exchange. Unless this is done, then those who benefit most from the formal labor market will continue to benefit most from informal exchange. How, therefore, can the poorest sections of these neighborhoods gain access to sources of informal support in order to both help them cope in their everyday lives and integrate them into the reciprocal exchange networks that make them feel part of the community? Here, we outline just one possible new form of institution that could facilitate such a process. Active Citizens’ Credits Drawing upon the ideas for Citizens’ Service (Briscoe, 1995; Hirsch, 1999; McCormick, 1994), we posit an “Active Citizens’ Credits” (ACC) scheme to engage in reciprocal exchange. Under this non-compulsory scheme, individuals would engage in a selfdesigned portfolio of work. The goals behind such a proposal are: • to encourage “full-engagement” by matching the supply of people who wish to work with those who have needs not currently fulfilled by the formal market; • to recompense and value work which currently goes unrecognized and unvalued; • to provide a means of work experience and skills acquisition as a springboard into employment; • to facilitate active citizenship; and • to tackle social exclusion and promote social cohesion through means other than merely insertion into employment. An ACC scheme could be implemented almost 289
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immediately by developing the “time dollars” approach that has flourished in the USA. Here, participants are paid one “hour” for each hour that they work, which they can at any time “cash in” by requesting an hour’s work in return from the system (see Boyle, 1999; Cahn, 1994; Cahn and Rowe, 1992). As such, time dollars are a local tax-exempt currency that one earns by helping others. One hour of service equals one time dollar. This “time currency” approach commenced in the mid-1980s in the USA, when Edgar Cahn developed the idea of rewarding people for every hour of their community service in time dollars. As such, the idea was to create a currency to record, store and reward transactions where neighbors help neighbors. People earn time currency by helping others (eg by providing child- or elder-care, transportation, cooking, home improvement). They then spend time currency to get help themselves or for their families, or to join a club that gives them discounts on food or health care. As such, time currency allows those aspects of people’s lives for which the market economy assigns no value to become redefined as valued contributions, and they give society a way to recompense activities that the market economy does not. This time currency thus empowers people to convert personal time into purchasing power, so as to enable them to stretch their limited cash further. It also reinforces reciprocity and trust, and rewards civic engagement and acts of decency in a way that generates social capital, one hour at a time. The result of valuing such work is that it can help: harness under-utilized human resources; give value and recognition to activities that are currently unvalued and unrecognized; and generate social capital in communities by rebuilding the non-market economy of family, neighborhood and community. At present, governments can only resort to calls for greater “civic engagement” and “community involvement”. They have no way of rewarding such activity on the part of participants. Time currency, however, provides a means by which people can be recompensed for such activity. It rewards reciprocity and converts that contribution into a form of currency that can be used to acquire goods and services that one needs and/or desires. By 1998, over 200 time banks and service credit programs were operating in 30 states in the USA and these schemes frequently have thousands of members. As professionally-managed projects, they require around US$50,000 per annum to run a central office so as to match the needs of members with the volunteers available (Boyle, 1999). So far, however, little formal evaluation has taken place either in the US or UK of the ability or potential of this initiative. Such research is badly required.
Conclusions Drawing upon case study evidence from deprived urban neighborhoods in two British cities, this paper 290
has revealed that paid informal work in deprived neighborhoods is not merely a peripheral form of employment undertaken for economic motivations that should be eradicated due to its fraudulent and exploitative character. Instead, such work is mostly conducted for kin, neighbors and friends for social rather than economic reasons and is thus akin to unpaid community exchange which it is commonly agreed needs to be nurtured in order to develop reciprocity and trust. Here, however, the policy finding is not merely that a more laissez-faire approach is required towards such work. Given that the poorest benefit least from such sources of informal support, this paper asserts that the challenge for policy is to identify vehicles for harnessing it amongst such groups. In this regard, the paper has concluded by outlining one specific alternative institution of accumulation, Active Citizens’ Credits, based on time currencies, that represents a means of facilitating reciprocal exchange amongst the poorest sections of deprived urban neighborhoods. This study of British deprived urban neighborhoods thus reveals that there is a need for a radical reconceptualisation of paid informal work in contemporary society as well as the policy approaches adopted towards it. A key question, however, must be whether paid informal work is of a similar character in other localities, regions and nations. For example, up until now, the caricature of paid informal work in deprived neighborhoods of the US has been one of sweatshops populated by low-paid ethnic minorities engaged in exploitative labor (eg Sassen, 1991). One response to this paper might be to argue that British culture is radically different to that of North America and/or the rest of Europe and as such, these findings are unique to Britain. Another response, however, might be that in our search for how advanced capitalism has created new forms of exploitative work, we have found what we were seeking when studying paid informal work in deprived neighborhoods. By focusing only upon that minor part of the paid informal sphere, such as sweatshops, where exploitative social relations are to be found, many previous studies of such work may merely have found what they sought rather than provide a balanced picture of the character of such work in deprived neighborhoods. The challenge for urban studies, therefore, is to investigate whether these findings are unique to British deprived urban neighborhoods or whether a much wider reconceptualisation of both the nature of paid informal work and our policies towards it are now required.
Acknowledgements The Joseph Rowntree Foundation has supported this project as part of its programme of research and innovative development projects, which it hopes, will be of value to policy makers and practitioners. The facts presented and views expressed in this paper, however, are those of the authors and not necessarily
Paid informal work in deprived neighborhoods: C C Williams and J Windebank
those of the Foundation. Gratitude is expressed by the authors to both the Joseph Rowntree Foundation for funding this project and to Stephen Hughes for providing the research assistance to bring it to fruition.
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Cities, Vol. 17, No. 4, pp. 285–291, 2000 2000 Elsevier Science Ltd. All rights reserved Printed in Great Britain 0264-2751/00 $-see front matter
www.elsevier.com/locate/cities
Paid informal work in deprived neighborhoods Colin C. Williams* Department of Geography, University of Leicester, Leicester LE1 7RH, UK
Jan Windebank Political Economy Research Centre, University of Sheffield, Sheffield S10 4GD, UK
In advanced economies, work beyond employment has been viewed very differently depending upon whether it is paid or not. Whilst unpaid work, especially voluntary work, has been perceived as something to be nurtured in order to rebuild trust and reciprocity in communities, paid informal work has been viewed as exploitative work conducted under sweatshop conditions that needs to be eradicated. Using evidence from deprived urban neighborhoods in Britain, however, this paper reveals that only a minor part of paid informal work involves exploited informal employees working in sweatshops. Instead, most paid informal work is conducted on a voluntary basis for kin, neighbors and friends for social rather than economic reasons. In consequence, much paid informal work is conducted under social relations akin to the unpaid community exchange that many wish to nurture. The policy finding, however, is not merely that a more laissez-faire approach is required towards such work. Given that the poorest benefit least from such sources of informal support, this paper asserts that the challenge for policy is to identify vehicles for harnessing it amongst such groups. The paper thus concludes by outlining one potential means – Active Citizens’ Credits – by which this might be achieved. 2000 Elsevier Science Ltd. All rights reserved Keywords: Informal sector, Britain, Reciprocity, Time dollars, Mutual aid
Introduction
employment (DSS, 1998; Commission of the European Communities, 1998; ILO, 1996; OECD, 1994) and/or highly exploitative work (Amin, 1996; Castells and Portes, 1989; Frank, 1996; Mingione, 1991; Portes, 1994; Ybarra, 1989). Indeed, these contrasting policy approaches towards unpaid and paid informal work are now so widely accepted throughout all advanced economies that few have sought to question their validity. Here, however, empirical evidence of paid informal work in British deprived urban neighborhoods is drawn upon to question whether such distinct approaches should be maintained. Focusing upon paid informal work, this will reveal that contrary to the dominant caricature, such work in deprived urban neighborhoods does not mostly involve exploited informal employees working in “sweatshops”. Instead, most paid informal work in these neighborhoods is conducted on a voluntary basis for their kin, neighbors and friends for social rather than economic reasons. The
Throughout the advanced economies, policy approaches towards work beyond employment significantly vary depending upon whether this work is paid or not. On the one hand, it is advocated that unpaid work, especially voluntary work, needs to be nurtured in order to rebuild trust and reciprocity in communities (Etzioni, 1993; Putnam, 1995). On the other hand, however, and in stark contrast to unpaid work, the overwhelming consensus is that paid informal work needs to be eradicated. Viewing it as work conducted under sweatshop conditions by marginalized groups as a survival strategy (eg Button, 1984; Kesteloot and Meert, 1999; Lagos, 1995; Maldonado, 1995; Rosanvallon, 1980), this work is seen to represent either unfair competition for formal *Corresponding author. Tel: 44 116 252 5242; fax: 44 116 252 3854; e-mail: [email protected]
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important finding, therefore, is that most paid informal work is conducted under social relations more akin to those forms of unpaid work that many wish to nurture. Here, however, the policy finding is not merely that a more laissez-faire approach is required towards such work. Showing that the poorest sections of society are the least able to benefit from such sources of informal support, this paper will assert that the challenge for policy is to identify vehicles for harnessing it amongst such groups. The paper thus concludes by outlining one potential means – Active Citizens’ Credits – by which this might be achieved. Before commencing, however, it is first necessary to define what is meant by paid informal work. In recent years across the social sciences, it has been argued that social and economic restructuring, together with government policies, have led to the creation of a large and growing sphere of paid work beyond the realm of formal employment. The consensus in the literature is that this paid work, variously referred to as the “underground” sector, “hidden” work or the “shadow” economy to name but a few of its titles (see Thomas, 1992; Williams and Windebank, 1998), involves the paid production and sale of goods and services that are unregistered by, or hidden from the state for tax, social security and/or labor law purposes, but which are legal in all other respects (Commission of the European Communities, 1998; Feige, 1990; Portes, 1994; Thomas, 1992). Paid informal work, therefore, includes all legitimate activities where payments received by individuals are not declared to the authorities. It does not include those illegal activities where criminal aspects are involved beyond the non-declaration of income (eg drug peddling).
Examining paid informal work in deprived urban neighborhoods In order to investigate the nature of paid informal work in deprived urban neighborhoods, in 1998, structured interviews were conducted with 400 households in such neighborhoods in two British cities, Southampton and Sheffield. The former is a successful service-oriented economy with low unemployment rates in the affluent south-east of Britain, whilst the latter is a poorer northern city, once famous for steel making but now suffering high rates of unemployment. In both cities, two types of deprived neighborhood were studied: an inner city neighborhood on the eastern fringes of the central business district, composed of mostly private sector housing and with the highest concentration of ethnic minorities in the city; and a neighborhood of mostly social housing, locally viewed as a “sink” estate. High unemployment and chronic social problems characterize all four areas. These localities were chosen for study because they are precisely the types of neighborhood identified by Green and Owen (1998) where non-employment, 286
unemployment and inactivity are highest in Britain and which are slipping ever further behind other areas in terms of employment rates. Examining the employment profiles of the 400 households surveyed, the extent of non-employment in these deprived neighborhoods and how this is grossly under-estimated in conventional unemployment statistics is revealed, as is the sheer size of the gap that needs to be bridged if full-employment is to be achieved in these neighborhoods. Just 34.9 per cent of the 870 adults surveyed had a job (41.0 per cent of men and 29.5 per cent of women). Moreover, 53.5 per cent of the households were jobless compared with 35.6 per cent nationally according to Dunford (1997). As a result, the vast majority of the households surveyed were on a low-income. Examining their total weekly household income before tax and other social contributions, 69.5 per cent had a gross income of less than £250 (c. US$380) per week and 80.0 per cent of households less than the approximate individual (not household) British average full-time wage of £365 (c. US$566) per week. The aim of the research was to investigate the nature and extent of their informal economic activity so that the possibilities for developing such activity could be explored. To do this, a modified version of the successful survey technique first pioneered by Pahl (1984) was employed. Using a list of 44 common household tasks (including home improvement and maintenance, routine household work and caring), households were asked whether each activity had been undertaken during the previous 5 years/year/month/week (depending on the activity). If so, they were asked: who undertook the work (eg a household member, relative living in another household, neighbor, friend, firm); whether they were unpaid or paid; and if paid, whether they were paid “in-kind” (eg a gift), “cash-in-hand” or formally. This enabled the work to be categorized into self-provisioning, unpaid community exchange, paid informal work or formal employment. The same task list was then used to elicit the nature and extent to which household members had conducted work for other households. If so, they were asked who had undertaken the work and whether it was unpaid, or whether they received payment in-kind or “cash-in-hand”. Although customers did not necessarily know whether money was declared or not, previous research using this technique reveals that when the results from households as customers and suppliers are compared, the same levels of informal activity are identified, meaning that the technique does not suffer from under- or over-reporting by respondents (eg Leonard, 1994; Pahl, 1984). Indeed, this was also found in this survey suggesting that the data is relatively reliable. To ensure that all paid informal work was included and having established a rapport with the respondents, additional open-ended questions were asked about any other undeclared work conducted for, or supplied by, households or
Paid informal work in deprived neighborhoods: C C Williams and J Windebank
firms in order to pick up the extent to which the residents of these deprived urban neighborhoods might be engaged in sweatshop activities or purchasing their products. To understand the motivations of suppliers and consumers of paid informal work, meanwhile, consumers were asked in an open-ended manner why they had used that particular source of labor to get the task completed and suppliers of paid informal work were asked why they had undertaken such activity whenever this was the case.
Extent and character of paid informal work in deprived urban neighborhoods The first striking finding of this study is the limited degree to which formal employment is used to undertake activities. Just 15.2 per cent of all the tasks surveyed were conducted using formal employment. The remainder (84.8 per cent) was undertaken using informal modes of provision. Examining the forms of informal work employed, some 76.1 per cent of all the work was undertaken on an unpaid basis by household members, whilst community exchange in the form of unpaid labor from other households was used to conduct 3.8 per cent of the tasks. Paid informal work, meanwhile, was used to conduct the remaining 4.9 per cent of the tasks. Some tasks, however, were more likely to be undertaken using paid informal work than others. As Table 1 shows, the tasks households were most likely to have had undertaken using paid informal work were window cleaning (received on a paid informal basis by 8.7 per cent of all households), hairdressing (7.8 per cent), car repair (7.8 per cent), maintenance of appliances (6.0 per cent), plumbing (5.8 per cent) and baby-sitting during the daytime (5.0 per cent) and evening (5.0 per cent). Examining what types of activity constitute the majority of paid informal work, meanwhile, seven tasks comprised just under half (45.2 per cent) of all paid informal work. These were window cleaning (8.6 per cent of all paid informal work), hairdressing (7.6 per cent), car repair (7.6 per cent), plumbing (5.7 per cent), maintenance of appliances (5.9 per cent) and baby-sitting during the day (4.9 per cent) and evening (4.9 per cent). Who, however, conducts such work and why? Do marginalized groups conduct such work under exploitative conditions as a survival strategy or are other social relations involved? To begin to answer these questions, it is first necessary to explore who supplies this work. Less than a third (29.2 per cent) of paid informal exchange received by households surveyed in these deprived neighborhoods used formal firms or self-employed people not known to them who they assumed were not declaring their incomes. Principally, this work mostly involved house maintenance (eg outdoor painting), home improvement (eg plumbing), hairdressing, window cleaning and car repair. Instead, the vast majority (70.8 per cent) of paid
informal work received by households is conducted by close social relations. First, there is the situation where a friend or neighbor is paid either cash-in-hand (24.6 per cent of all paid informal services) or given a gift in-lieu of money (8.9 per cent); second, there is work where kin not living in the household are paid either cash-in-hand (16.2 per cent) or given a gift (8.9 per cent) for doing the work, and finally and sometimes overlooked, where a household member is paid to do the work (12.9 per cent) or given a gift (3.2 per cent). Paid informal exchange, therefore, is more often than not a transaction between a customer and supplier who have close social relations rather than between an anonymous buyer and seller. In other words, it is a form of work that is conducted more in the private than the public sphere. What are the social relations, however, under which this work is conducted? Are these participants engaged in work of an exploitative nature or are different social relations involved? Motivations for using and supplying paid informal work To answer these questions, we here investigate the motivations of people for both using and supplying work on a paid informal basis. So far as users of such work are concerned, although this work was used primarily as a cheaper alternative to formal employment when firms (composed mostly of men) are employed, this was not the case when closer social relations were involved, which mostly involved women. Here, instead, “community-building” rationales predominated. For example, paid informal work was used as a means of developing or maintaining social networks. This is unsurprising. After all, exchange remains the principal nexus through which social relations are forged and maintained in contemporary society (Morris, 1995). To a lesser extent, “redistributive” rationales also predominate, such as when money was provided to kin such as children, a sibling or parent, since it was often a way of giving them much needed spending money whilst avoiding any connotation of charity. Hence, paid informal work is not simply used as a means by which users can save money by getting a good and/or service cheaper than if they had to pay a formal business, as popular prejudice often assumes. Other more socially orientated rationales also exist for using paid informal work. For informal workers, meanwhile, although economic motivations were central when individuals worked for firms “on the side” or engaged in selfemployed activity for people they did not know well, this was not the case with closer social relations. First, there are again “redistributive” rationales. For example, they knew that a person needed a job doing but that they could not afford to pay a formal business to do it. They thus offered their craft skills to these close social relations for a fee well under the market price. In no cases, however, was this work offered for 287
Paid informal work in deprived neighborhoods: C C Williams and J Windebank Table 1
Paid informal work in deprived urban neighborhoods % households doing task
All house maintenance (last 5 years) Outdoor painting Indoor painting Wallpapering Plastering Mending broken window Maintenance of appliances All home improvement (last 5 years) Double glazing Plumbing Electrical work House insulation Put in bathroom Build a garage Build an extension Convert attic Put in central heating Carpentry All routine housework (last week) Do housework Clean the house Clean windows Spring cleaning Do the shopping Wash clothes/sheets Ironing Cook the meals Wash dishes Hairdressing Administration All making and repairing goods (last year) Make clothes Knitting Repair clothes Make furniture Make garden equipment Make curtains All car maintenance (last year) Wash car Repair the car Car maintenance All gardening (last year) Indoor plants Outdoor borders Outdoor vegetables Lawn mowing Caring (last month) Baby-sitting (day) Baby-sitting (night) Courses (eg piano lessons) Pet care All
% using paid informal % of all paid informal No. of times exchange exchange conducted using paid informal exchange
51.1 44.2 61.2 68.0 33.7 20.7 53.7 19.2 24.5 46.0 33.2 18.2 10.5 1.2 2.5 1.0 8.0 46.7 89.2 100.0 81.5 84.2 87.3 100.0 93.5 100.0 100.0 40.2 95.5 18.6
7.9 10.2 6.9 5.9 11.8 7.2 11.1 10.1 7.1 12.5 11.8 1.4 23.8 0.0 0.0 25.0 9.4 9.1 2.9 2.2 1.8 10.4 2.3 100.0 1.0 1.3 1.2 1.0 7.8 0.5 2.2
23.9 4.4 4.2 3.9 3.9 1.5 5.9 19.2 1.7 5.7 3.7 0.2 2.4 0.0 0.0 0.2 0.7 4.2 28.1 2.2 1.5 8.6 2.0 1.3 1.0 1.2 1.2 1.0 7.6 0.5 2.5
97 18 17 16 16 6 24 78 7 23 15 1 10 0 0 1 3 17 114 9 6 35 8 1.2 4 5 5 4 31 2 10
13.7 16.3 55.2 8.0 0.7 17.7 45.0 47.5 40.0 47.5 42.7 67.5 52.7 8.2 42.2 33.2 43.5 42.5 2.5 44.2 46.1
0.0 0.0 0.4 6.2 33.0 8.4 9.1 5.8 19.4 3.7 2.0 0.4 2.8 0.0 4.1 8.1 11.5 11.7 0.0 1.7 4.9
0.0 0.0 0.2 0.5 0.2 1.5 12.1 2.7 7.6 1.7 3.4 0.2 1.5 0.0 1.7 10.6 4.9 4.9 0.0 0.7 100.0
0 0 1 2 1 6 49 11 31 7 14 1 6 0 7 43 20 20 0 3 405
free. A fee was charged which although well above constituting a token gesture was well below the normal market price. For other suppliers, however, who were normally unemployed or early retired, such work was undertaken for those who seemed to have less free time (eg multiple-earner households) and they saw themselves as providing a service to “timestarved” people they knew at a price well below the 288
market value. Consequently, and as stated above, whilst the customers in these cases frequently possessed rationales based on redistributing cash to these people, the suppliers saw themselves as helping out by giving their time. This “trade” between “time rich– money poor” and “money rich–time poor” people, therefore, far from being seen as exploitative in the eyes of the participants, was more perceived as
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involving mutual reciprocity. Each partner was giving the resource that they possessed in relatively greater amounts to the other in order to get a task completed. Besides these redistributive rationales, there are again community-building rationales involved in undertaking paid informal work. For example, many of those involved offered their services as a means of maintaining and forging social networks. For them, offering to do a job informally for a small payment was a way of mixing with and helping people they knew and at the same time, making a little money on the side. The majority of paid informal work, in sum, is undertaken for kin, neighbors and friends and involves social objectives rather than a strictly economic utilitarian rationality. As such, paid informal work is similar to formal employment, which is also conducted for a range of reasons, many of which are social rather than purely economic. Who, however, engages in such work? The distribution of paid informal work Jobless households, despite representing 53.5 per cent of the households surveyed, conducted just 38.9 per cent of all paid informal work. Multiple earner households, meanwhile, representing just 23.5 per cent of the sample, undertook 27.9 per cent of all paid informal exchange and single-earner households (23.0 per cent of the sample), the remaining 33.2 per cent of paid informal work. Contrary to the nostrums of the “marginality thesis”, therefore, which views paid informal work as an exploitative peripheral form of labor undertaken mostly by marginalized population groups as a survival strategy (eg Button, 1984; Lagos, 1995; Maldonado, 1995; Rosanvallon, 1980), such work was supplied more by relatively affluent households. Paid informal work, therefore, is not only conducted for social as much as economic objectives, even in these deprived neighborhoods, but neither is it conducted by mostly marginalized groups as a survival strategy. When the character of the paid informal work undertaken by multiple- and no-earner households is compared, moreover, some stark disparities emerge. Where members of jobless households engage in such work, it was repeatedly found that these were poorly paid one-off jobs. Multiple earner households, meanwhile, are more likely to be engaged in regular better paid informal work, frequently using the skills and contacts acquired in their formal employment. For example, the average price received for engaging in paid informal work amongst members of no-earner households was £2.50 per hour compared with £4.75 per hour amongst employed people in multiple earner households. Therefore, and similar to the formal labor market, there appears to exist a segmented informal labor market in which there are well-paid “core” informal workers, who are also mostly formally employed, engaged in relatively autonomous wellpaid activities and “peripheral” workers, who are
mostly unemployed, engaged in poorly paid activity. This, moreover, applies not only to paid informal work conducted in the private realm, but also that undertaken in the public realm. Hence, paid informal work is disproportionately conducted by employed households whose work is better paid than those in no-earner households. In the next section, therefore, we examine the policy implications of these findings.
Policy implications Given that paid informal work is mostly conducted on a voluntary basis for kin, neighbors and friends for social rather than economic reasons under social relations more akin to the unpaid work that many wish to nurture in order to promote reciprocity and trust, it is here suggested that it would be inappropriate to continue to seek its eradication. This does not mean, however, that a laissez-faire approach is required towards such work. Above, we have shown that it is the poorest who benefit least from such sources of informal support. Consequently, the challenge for social and labor market policy is more to identify vehicles for harnessing it amongst such groups as a means of developing reciprocal exchange. Unless this is done, then those who benefit most from the formal labor market will continue to benefit most from informal exchange. How, therefore, can the poorest sections of these neighborhoods gain access to sources of informal support in order to both help them cope in their everyday lives and integrate them into the reciprocal exchange networks that make them feel part of the community? Here, we outline just one possible new form of institution that could facilitate such a process. Active Citizens’ Credits Drawing upon the ideas for Citizens’ Service (Briscoe, 1995; Hirsch, 1999; McCormick, 1994), we posit an “Active Citizens’ Credits” (ACC) scheme to engage in reciprocal exchange. Under this non-compulsory scheme, individuals would engage in a selfdesigned portfolio of work. The goals behind such a proposal are: • to encourage “full-engagement” by matching the supply of people who wish to work with those who have needs not currently fulfilled by the formal market; • to recompense and value work which currently goes unrecognized and unvalued; • to provide a means of work experience and skills acquisition as a springboard into employment; • to facilitate active citizenship; and • to tackle social exclusion and promote social cohesion through means other than merely insertion into employment. An ACC scheme could be implemented almost 289
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immediately by developing the “time dollars” approach that has flourished in the USA. Here, participants are paid one “hour” for each hour that they work, which they can at any time “cash in” by requesting an hour’s work in return from the system (see Boyle, 1999; Cahn, 1994; Cahn and Rowe, 1992). As such, time dollars are a local tax-exempt currency that one earns by helping others. One hour of service equals one time dollar. This “time currency” approach commenced in the mid-1980s in the USA, when Edgar Cahn developed the idea of rewarding people for every hour of their community service in time dollars. As such, the idea was to create a currency to record, store and reward transactions where neighbors help neighbors. People earn time currency by helping others (eg by providing child- or elder-care, transportation, cooking, home improvement). They then spend time currency to get help themselves or for their families, or to join a club that gives them discounts on food or health care. As such, time currency allows those aspects of people’s lives for which the market economy assigns no value to become redefined as valued contributions, and they give society a way to recompense activities that the market economy does not. This time currency thus empowers people to convert personal time into purchasing power, so as to enable them to stretch their limited cash further. It also reinforces reciprocity and trust, and rewards civic engagement and acts of decency in a way that generates social capital, one hour at a time. The result of valuing such work is that it can help: harness under-utilized human resources; give value and recognition to activities that are currently unvalued and unrecognized; and generate social capital in communities by rebuilding the non-market economy of family, neighborhood and community. At present, governments can only resort to calls for greater “civic engagement” and “community involvement”. They have no way of rewarding such activity on the part of participants. Time currency, however, provides a means by which people can be recompensed for such activity. It rewards reciprocity and converts that contribution into a form of currency that can be used to acquire goods and services that one needs and/or desires. By 1998, over 200 time banks and service credit programs were operating in 30 states in the USA and these schemes frequently have thousands of members. As professionally-managed projects, they require around US$50,000 per annum to run a central office so as to match the needs of members with the volunteers available (Boyle, 1999). So far, however, little formal evaluation has taken place either in the US or UK of the ability or potential of this initiative. Such research is badly required.
Conclusions Drawing upon case study evidence from deprived urban neighborhoods in two British cities, this paper 290
has revealed that paid informal work in deprived neighborhoods is not merely a peripheral form of employment undertaken for economic motivations that should be eradicated due to its fraudulent and exploitative character. Instead, such work is mostly conducted for kin, neighbors and friends for social rather than economic reasons and is thus akin to unpaid community exchange which it is commonly agreed needs to be nurtured in order to develop reciprocity and trust. Here, however, the policy finding is not merely that a more laissez-faire approach is required towards such work. Given that the poorest benefit least from such sources of informal support, this paper asserts that the challenge for policy is to identify vehicles for harnessing it amongst such groups. In this regard, the paper has concluded by outlining one specific alternative institution of accumulation, Active Citizens’ Credits, based on time currencies, that represents a means of facilitating reciprocal exchange amongst the poorest sections of deprived urban neighborhoods. This study of British deprived urban neighborhoods thus reveals that there is a need for a radical reconceptualisation of paid informal work in contemporary society as well as the policy approaches adopted towards it. A key question, however, must be whether paid informal work is of a similar character in other localities, regions and nations. For example, up until now, the caricature of paid informal work in deprived neighborhoods of the US has been one of sweatshops populated by low-paid ethnic minorities engaged in exploitative labor (eg Sassen, 1991). One response to this paper might be to argue that British culture is radically different to that of North America and/or the rest of Europe and as such, these findings are unique to Britain. Another response, however, might be that in our search for how advanced capitalism has created new forms of exploitative work, we have found what we were seeking when studying paid informal work in deprived neighborhoods. By focusing only upon that minor part of the paid informal sphere, such as sweatshops, where exploitative social relations are to be found, many previous studies of such work may merely have found what they sought rather than provide a balanced picture of the character of such work in deprived neighborhoods. The challenge for urban studies, therefore, is to investigate whether these findings are unique to British deprived urban neighborhoods or whether a much wider reconceptualisation of both the nature of paid informal work and our policies towards it are now required.
Acknowledgements The Joseph Rowntree Foundation has supported this project as part of its programme of research and innovative development projects, which it hopes, will be of value to policy makers and practitioners. The facts presented and views expressed in this paper, however, are those of the authors and not necessarily
Paid informal work in deprived neighborhoods: C C Williams and J Windebank
those of the Foundation. Gratitude is expressed by the authors to both the Joseph Rowntree Foundation for funding this project and to Stephen Hughes for providing the research assistance to bring it to fruition.
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