Why Jobs Mean More Than Income
In everyday conversation, “livelihood” is often used as just another word for a job. Jobs are of course a good and, in fact, crucial part of improving the lives of the world’s poor or otherwise vulnerable people. But for too many people, a job contributes to vulnerability; it may provide an income but not an opportunity to prosper. Here at the Rockefeller Foundation, our focus on Secure Livelihoods seeks to go beyond just jobs. That’s why we focus on livelihoods and employment as a source of opportunity, not just income. We hope to spur systems change with the potential to expand opportunity by promoting inclusive markets in a changing global economy.
The emerging challenges within the area of Secure Livelihoods were covered in a recent collaboration between the Foundation and Accenture Development Partnerships and included in the recently-released Accenture report, “A Critical Scan of Four Key Topics for the Philanthropic Sector.” The scan identified four key problem spaces, which are summarized below.
Global Employment Crisis
“In the future, decent jobs will be a minority experience.”
Labor market imbalances are growing globally, and the increasingly structural nature of unemployment has serious potential impacts. The global economy, slowed by the global economic crisis that began in 2007, is not creating good jobs at the same rate as young people are entering the labor force. In addition to high (and growing) unemployment rates, many people who have jobs find themselves underemployed. Continued economic volatility and growing demographic pressures are adding to the urgency of this problem.
“Informal employment is often volatile and low-quality.”
The majority of new jobs in developing economies are being produced within the informal sector. While these provide a crucial source of income for many families, jobs within the informal are often of low-quality and are insecure. Informal workers are often not covered by social protection schemes, and are unprotected occupational health and safety measures. With over 900 million people employed informally (2 billion when agricultural workers are included), the informal sector is not disappearing anytime soon. The challenge is how to ensure that those employed in the informal sector are protected from exploitation so that they can prosper.
“Financial exclusion makes building a secure future more difficult.”
Financial services are something that the wealthy and middle class often take for granted. The ability to deposit a paycheck, put something on a credit card, or get a loan to make a big purchase can make life a little (or a lot) smoother. Yet over half of the world’s adult population lacks access to formal financial services. This has negative implications for their resilience, as it limits the ability to save, borrow for both present needs and investments in the future, and insure against the unexpected. While advances in technology and regulation show promise, innovations in products and processes are still needed to go the “last mile” in providing financial services to the poor around the world.
Role of the Private Sector
“Companies face too little responsibility for the total costs of doing business.”
The private sector is an important part of the global economy, providing goods and services and employing much of the labor force. Yet the decisions that companies in the private sector make can also have serious negative consequences, especially for the poor or vulnerable. Rather than bear the responsibility for provision of a living wage, safe working conditions, and skills training, some companies pass off onto society their costs of profitability.
Business practices that degrade the environment are another example of unsustainable actions for which the private sector is often not held accountable. Certainly, we will encounter many challenges in working to secure livelihoods and those problems listed above represent only a sample of topics that our scanning work identified as most pressing. We hope that by sharing our work, we can spur both conversation and innovation that ultimately helps achieve equitable opportunities for all.