The Informal Sector: The Implications of the Ilo's Study of Kenya

Abstract

In the fall of 1972 the International Labor Organization published Employment, Incomes and Equality: A Strategy for Increasing Productive Employment in Kenya. While this study has general implications for employment policies in underdeveloped countries, it is especially relevant for urban problems. We will here examine the extent to which the ILO's proposals for handling problems arising in the “informal sector,” within which hawkers and squatters are considered the most troublesome, are likely to be accepted by the Kenya government and the Nairobi City Council. According to the ILO, the gap between the growth of the Kenya population (3.3 per cent annually) and wage-earning employment (less than 2 per cent) makes rising unemployment inevitable, particularly in the major towns, where the African population expanded during the 1960's at a rate of over 10 per cent per annum. To stem urban migration, or to expel nonwage earners from the towns, is impossible because of the scarcity of arable agricultural land. Likewise, the government cannot provide enough jobs for the unemployed without seriously overburdening the economy due to the country's inadequate industrial potential. Therefore, it is proposed by the ILO that the government should primarily concern itself with increasing employment opportunity by encouraging self-employment rather than wage earning. The self-employed in Nairobi earn about $240 annually (L90) and provide real services for the low-income segment of the population—selling, exchanging, repairing, transporting, and even making or assembling much of what is needed by those unable to afford the amenities enjoyed by the elite.