Decent Work in Poverty Reduction Strategies: Key Pathway to Economic Growth

1. Nov. 16, 06 INTERNATIONAL FORUM ON THE ERADICATION OF POVERTY SESSION 5 MAINSTREAMING DECENT WORK INTO POVERTY REDUCTION STRATEGIES Marty Chen Harvard University WIEGO

2. PRESENTATION • WHY should Decent Work be mainstreamed into poverty reduction strategies? • WHAT does mainstreaming Decent Work into poverty reduction strategies mean? • HOW can Decent Work be promoted to reduce poverty?

3. WHY SHOULD DECENT WORK BE MAINSTREAMED INTO POVERTY REDUCTION STRATEGIES? # 1 – Employment – or, more precisely, ‘decent work’ – is a key pathway to poverty reduction. # 2 – This is because the main – if not only – source of income for the poor is what they earn. # 3 – Increasing the quality and quantity of employment opportunities is, therefore, the key link between economic growth and poverty reduction. # 4 – Yet, until recently, most poverty reduction strategies did not include a central focus on employment. # 5 – In September 2005, “productive employment and decent work” were officially recognized as central objectives in achieving MDGs in a Ministerial Declaration framed by the UN General Assembly

4. WHAT DOES MAINSTREAMING DECENT WORK INTO POVERTY REDUCTION STRATEGIES MEAN? # 1 - Most of the world’s poor – especially in developing countries – are working. But the working poorare not able to work their way out of poverty. # 2 - ILO estimates suggest that there are some 550 million working poor earning less than US$ 1 per day (ILO 2004) # 3 - The challenge, therefore, is: • to create more and better employment opportunities • to ensure the poor gain access to these opportunities • to increase the income and reduce the risks of the working poor # 4 - The vast majority of the working poor earn their living in the informal economy where on average: • earnings are low • risks are high # 5 - Poverty reduction is not possible without addressing the root causes of the low incomes and high risks of the working poor.

5. HOW SHOULD DECENT WORK BE PROMOTED TO REDUCE POVERTY? THREE-PART STRATEGY #1 – generating new and better employment opportunities #2 – ensuring poor gain access to new employment opportunities #3 - increasing incomes and reducing risks for the working poor

6. HOW SHOULD DECENT WORK BE PROMOTED TO REDUCE POVERTY? Component # 1 Promotion of employment-intensive growth: i.e., ensuring economic growth produces more and better employment opportunities This requires increasing demand through macro-economic and sectoral policies (esp. agriculture and manufacturing) and increasing productivity through investments and market access.

7. HOW SHOULD DECENT WORK BE PROMOTED TO REDUCE POVERTY? Component # 2 Increased access and competitiveness of the poor: i.e., ensuring that the poor gain access to new employment opportunities This requires targeted employment policies as well as skills training and job matching.

8. HOW SHOULD DECENT WORK BE PROMOTED TO REDUCE POVERTY? Component # 3 Increased returns to the working poor: i.e., increasing the incomes and reducing the risks of the working poor This requires addressing the root causes of low incomes and high risks of the working poor. These include: • lack of productive assets • lack of economic rights • lack of social protection • lack of organization and representation

9. CONCLUSION Reducing poverty requires promoting Productive Employment and Decent Work Promoting Decent Work for the poor requires increasing their: • market access • productive assets • economic rights • social protection Promoting the access, assets, rights, and protection of the working poor requires increasing their: • visibility: in official data and plans • voice: in policy-making bodies