When people think about poverty in Haiti, many times the
image that comes to mind is that of a poor farmer gathering his crops to take
to market. Though many of Haiti’s poorest live on rural farms, poverty is also quite endemic in the urban areas, and this type of poverty is a completely
different beast than rural poverty.
In developing countries like Haiti, the urban economies are
composed of two separate labor groups, a formal sector and an informal sector.
The formal labor sector is made up of professional jobs that we have in the US,
doctors, lawyers, business professionals, police officers, construction
workers, factory workers, teachers, etc. In many Haitian cities, this formal sector is
principally composed of factory laborers. These jobs are relatively well paying
and offer consistent work and consistent pay. This type of labor force is not
too difficult to understand because it’s what most Americans are apart of. Most of us have a job we go to on a regular basis, and we receive a
predefined salary for our work. The salary may vary those paid on commission,
but our output always has a predetermined salary.
The second sector in Haitian cities (and most cities in most
developing countries), the informal sector, is a bit different than anything we
see in the US. The informal sector is made up of jobs with no predefined salary
and no predefined work agreement. The people in these jobs are not hired for
the jobs, nor do they work for a specific firm; rather they act as individual
agents looking for any remunerative task the city might offer. As you exit the
Port Au Prince Airport, there are about fifty guys who come up to you and offer
to take your luggage to your car. They are pretty aggressive and won’t stop hassling
you until you walk away from them or someone else comes up. A few months ago when I was flying back to
the US, one of these guys grabbed my bags without me asking, and then demanded
I pay him twenty dollars. When I handed him five, he tried to grab my wallet. These
guys are all in the informal labor sector. They are basically low
skilled workers looking for a situation where they could make a little bit of
money. These jobs are not too common in the US; the best example of an informal
labor sector we see at home would be a few guys outside of a Home Depot or a
Lowes looking to do some construction work for that day. The informal laborers
basically sit in highly populated areas looking for something they can do to
get paid. In the L’Estere market where we buy the goats, there are always guys
hanging around the people selling goats, and will offer to walk your goats back
to your car. They do this without any predetermined salary, but they hope they
will get a tip when they’re done. There is no contract enforcing this agreement though, so there is no guarantee they will get paid. This is the sector of the urban
economy where urban poverty exists. Some of these informal laborers add value
to the city, like the guys who help us take our goats back to the car, but some
of these informal laborers can be destructive to the overall economy. In some
cities laborers in the informal sector will work as pickpockets or beggars.
Though these jobs don’t really add value to the city, they can provide an
income. In very unfortunate circumstances, children will go to the cities
looking for work, and will join gangs to find money.
In countries like Haiti, where most of the population is
located in the rural areas, regulating urban poverty is difficult. People will
migrate from the rural farms to the urban areas if they think they can make
more money in the urban areas than they are currently making in the rural areas.
If the average expected wage in the urban areas is greater than the average
wage in the rural areas, people will move to the urban areas. The problem with
this, is that the majority of jobs in the urban areas are in the informal
sector, which pay less than the average rural sector. So even if there are good
jobs available in the urban sector, not everyone who migrates to the urban
areas will get those jobs. Some people will get good work in the formal sector,
while others will get shafted into a crumby job in the informal sector.
This is difficult to understand on a theoretical level, so
an example might help. Lets say the American government lifted the sugar
tariffs on foreign sugar. This means Haitian sugarcane just would become more
profitable. Cane refineries begin to open up in Gonaives (the port town ten
miles north of La Croix), and the average wage of a Haitian factory worker in
Gonaives would increase. For this example, lets assume the average wage of a
factory worker in Gonaives triples. Now an increase in factory wages in
Gonaives will increase the wages in Gonaives’s formal sector. Because the
expected urban wage is made up of both the formal and informal sectors, the new
sugar cane refineries in Gonaives will give people in the rural areas an
incentive to migrate to Gonaives. The migration will be uneven; not everyone
who moves there will profit from the new opportunities there. There will be
more people migrating to Gonaives than the sugarcane refineries can employ.
Everyone will come to Gonaives hoping to get a good job at the sugar cane refinery,
but not everyone will. Those who don’t find work at the sugarcane refineries
will then work in the informal sector. Some people might go back home to the
rural areas, but most people will probably stick around hoping to work at the
sugar cane refinery. Formal sector jobs are generally very good jobs and most
people who migrate to the cities intend to stay there for a while, looking for that formal sector job. While they wait they have to work, so they will work in the
informal sector, and remain in poverty.
This is counterintuitive, because it asserts that a rising
tide in the urban areas does not lift all boats. A new sugarcane refinery
should decrease urban poverty, but it ends up increasing urban poverty because
it pulls more people from the rural areas than can be employed at the new
refineries. This is one of the reasons that some NGOs in Port Au Prince are
doing more harm than good after the 2010 earthquake. Before earthquake, Port Au
Prince had some really good formal sector jobs. After the earthquake, many of
those jobs crumbled away, quite literally in some cases. Because the formal
sector disappeared almost instantly, there was a huge swell in the informal
sector. People who worked in factories that were demolished in the quake, now
had to work as bag carriers outside of the airport. After the earthquake many
NGOs came and tried to redevelop the formal sector jobs that were lost in the earthquake.
This was helpful for the handful of people who got the formal sector jobs in
the cities, but it also maintained the huge informal labor sector initially created by
the earthquake. Those people occupying the informal labor sector are the ones
currently living in the squalid tent cities around Port Au Prince. They have not
returned back to the rural areas because they are hoping to get one of the formal sector jobs. This is one of the reasons, that even three years after
the earthquake, there are still massive tent cities outside of Port Au Prince.
All those people are hoping to get jobs in formal sector, but in the mean time they are making ends meet
by working in the informal sector. What might have been a more productive
development initiative after the earthquake would have been to not focus on
the jobs that were lost in the cities, but focus on developing the rural areas.
This way there would have been a reverse migration back to the rural areas.
Those working in the informal sector in the big cities would return to the rural areas
because the wages there were increasing. Though this would have not rebuilt the
big cities, it would have decreased the overall level of urban poverty.
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