Workforce

• 1. The Uncounted Majority

  ›

  The workforce, also called the labour force, is the pool of people who are either working or looking for work. According to a 2021 FAO study, 85 percent of economic activity in Africa is conducted in the informal sector. Much of that activity never touches a payroll. Economists still have to decide who belongs in the count and who does not. Who counts as part of a workforce? What separates a job with a payroll from one without? Why do women carry so much of the work that nobody pays for? And how did the world's pool of workers grow so fast that factories and offices crossed oceans to reach it?

  7

• 2. Who Counts

  ›

  Start with the noninstitutional civilian population, the number of people potentially available for civilian employment. Economists sort everyone in it into three groups. The employed are working. The unemployed can work and are looking for a job. A third group can work but neither holds a job nor searches for one, and these people are out of the labour force.

  Together, the employed and the unemployed make up the labour force. The population being sorted is the total population minus people who cannot or choose not to work. That excluded group includes children, retirees, soldiers and incarcerated people.

  The labour force participation rate, abbreviated LFPR, is the ratio of the civilian labour force to the noninstitutional civilian population. One boundary inside the labour force matters even more than its outer edge: whether the work is paid through a payroll at all.

  16171819

• 3. Formal and Informal Work

  ›

  A wage delivered through payroll, whether on paper or by electronic card, is the mark of formal labour. Formal work is structured and paid in a formal way. Unlike informal work, it contributes to a country's gross national product. Informal labour falls short of a formal arrangement in law or in practice. It can be paid or unpaid, and it is always unstructured and unregulated. The rewards differ too. Formal employment is more reliable, and it generally yields higher income, greater benefits and more security for both men and women.

  In the year 2000, a study by Jacques Charmes found that informal labour made up 57 percent of non-agricultural employment in Latin America. It also made up 40 percent of urban employment and 83 percent of new jobs there. In Africa that same year, the shares were 78 percent, 61 percent and 93 percent. Informal labour is expanding globally, most sharply in developing countries.

  The Asian economic crisis, which began in 1997, showed what a shock can do. Labourers tend to shift from the formal sector to the informal sector after an economic crisis, and that pattern appeared then.

  Martha Chen and her co-authors divide both formal and informal labour into agricultural and non-agricultural work. They see these four categories as closely related. Most agricultural work is informal, which The Penguin Atlas of Women in the World describes as unregistered or unstructured. Non-agricultural work can be informal too. Chen and colleagues put its share at 48 percent in North Africa, 51 percent in Latin America, 65 percent in Asia and 72 percent in Sub-Saharan Africa. The ILO's 2016 employment analysis found that 64 percent of informal employment in sub-Saharan Africa was in agriculture, rather than industry or services. That same analysis also compared men and women, and the gap between them was wide.

  3452

• 4. Women's Informal Work

  ›

  In the 1990s in Benin, 81 percent of women were street vendors, according to The Penguin Atlas of Women in the World. The atlas gives lower shares elsewhere: 55 percent in Guatemala, 44 percent in Mexico, 33 percent in Kenya and 14 percent in India.

  Women are employed informally more often than formally. Informal labour is also a larger source of employment for women than for men. Home-based work and street vending are typical occupations. Across the developing world, 60 percent of women workers are employed in the informal sector.

  The regional figures are sharper. In Sub-Saharan Africa, 84 percent of women workers and 63 percent of men workers are in the informal sector. In Latin America the figures are 58 percent for women and 48 percent for men. Asia is the exception, at 65 percent for both.

  Women who hold formal jobs often do informal work behind the scenes as well. Together they make up what the source calls the hidden work force.

  The ILO's 2016 analysis found that 92 percent of women workers in sub-Saharan Africa were in informal employment, against 86 percent of men. The 2021 FAO study says women account for nearly 90 percent of the informal labour force in Africa.

  2458

• 5. Unpaid Hours

  ›

  Unpaid workers have zero earnings, yet their work is valuable and hard to price. Unpaid work includes child care and other labour at home that sustains a family. It also includes habitual daily labour, such as working the fields, that brings no money. Some informal work is unpaid or paid under the table.

  Men and women tend to work in different areas of the economy, whether the work is paid or not. Women focus on the service sector, while men focus on the industrial sector. Women also usually work fewer hours in income generating jobs than men do, and much of their unpaid time goes to housework.

  The Penguin Atlas of Women in the World, published in 2008, puts numbers on the gap. In Madagascar, women spend 20 hours per week on housework and men spend two. In Mexico the figures are 33 hours and 5 hours. In Mongolia they are 27 and 12, and in Spain 26 and 4. Only in the Netherlands do men spend 10 percent more time than women on activities within the home.

  In Malawi, women spend 6.3 hours per week fetching water, while men spend 43 minutes. Girls in Malawi spend 3.3 hours per week on the task, and boys spend 1.1 hours. The atlas notes that in developing countries women and girls generally spend a significant amount of time on this chore.

  In the United Kingdom in 2014, two-thirds of workers on long-term sick leave were women, although women were only half of the workforce. That remained true even after excluding maternity leave.

  2107

• 6. The Global Labour Boom

  ›

  Between the 1980s and the early 2000s, the global supply of labour almost doubled in absolute numbers. Half of that growth came from Asia. Measured from 1980 to 2010, the global workforce grew from 1.2 billion to 2.9 billion people. Over the same stretch, the rate at which new workers entered the workforce in the Western world began to decline.

  A 2012 report by the McKinsey Global Institute traced most of this growth to developing nations, where a "farm to factory" transition took place. Non-farming jobs grew from 54 percent in 1980 to almost 73 percent in 2010. This industrialization took an estimated 620 million people out of poverty. It also contributed to the economic development of China, India and others.

  Most of the absolute increase consisted of less-educated workers, meaning those without higher education. Yet the relative supply of workers with higher education rose by about 50 percent in the same period.

  Employers in more advanced economies reach this growing pool in several ways, including imports of goods, offshoring of production and immigration. Global labor arbitrage is the practice of accessing the lowest-cost workers from all parts of the world. It is partly a result of this enormous growth in the workforce. Where that production physically moved follows a pattern with its own name, the global industrial shift.

  111213

• 7. The Global Industrial Shift

  ›

  Until around 1970, under the "old" international division of labor, underdeveloped areas joined the world economy mainly as suppliers of minerals and agricultural commodities. That arrangement changed as developing economies merged into the world economy and more production took place inside them.

  The trend is also called transference. Production processes were relocated from developed countries such as the US, European countries and Japan. They moved to developing countries in Asia, such as China, Vietnam and India, and to Mexico and Central America. Companies were searching for the cheapest locations to manufacture and assemble components. The low-cost, labor-intensive parts of manufacturing went to places where costs are substantially lower.

  Factories were not the only thing to move. Offshore outsourcing of IT-enabled services, such as offshore custom software development and business process outsourcing, has grown as well. Its growth is linked to the large amounts of reliable and affordable communication infrastructure that followed the telecommunication and Internet expansion of the late 1990s.

  151413