Informal Economies

Informal Economies

My last post was about the high costs of work and how we often fail to fully consider the high costs of work for people in the deepest poverty when we criticize them for relying on government aid for survival. This post looks at what people living in poverty do to make money when they don’t engage in formal economies or work traditional jobs. For the individuals chronicled in Kathryn Edin and H. Luke Shaefer’s book $2.00 A Day, informal work is how most of them make any money, as the costs of formal employment can make working in the formal sector prohibitive.
“The more employment in the formal labor market proves perilous – with low pay, too few hours, and crazy schedules – the more untenable it is for a parent trying to raise kids. And the weaker the government safety net, the more the informal work described here will proliferate.”
Informal work can be dangerous, hazardous, and unpredictable, but often it is one of the only options available to people in poverty who can’t get a foothold in more traditional labor markets. If you can’t afford to live near a job, if that job changes its schedules unpredictably, and if you are generally taken advantage of in a low-wage work situation that doesn’t ensure you won’t go hungry or without water or power, then why risk putting in the effort to find and maintain a job in the formal economy? Why not fall back on what little social support and government aid there is and hope for odd jobs in the informal economy instead? At least those jobs will provide some measure of autonomy, can be done close to home or with reasonable transportation provided, and at least they will pay quick cash.
This is the calculation many living in poverty face each day, but there are long term costs to relying on an informal economy. The authors write, “the replacement of a formal economy with an informal one – unregulated and unpoliced – may have a self-perpetuating effect of pushing the $2-a-day poor further and further out of the American mainstream.” Informal jobs are not enough to help people escape poverty, build skills or a resume for the future, or find stable and solid footing. Informal economies meet the immediate needs of the day sometimes better than formal jobs, but they don’t provide the stability and support necessary to plan for a future and build a road toward success.
However, as my first few paragraphs show, we cannot simply blame the individual for opting out of the formal economy for informal jobs that don’t provide long-term benefits. The formal economy can also be unpredictable, can deliberately schedule too few hours or change hours last minute, and also may not provide many long-term benefits to help someone live with any stability. These are large structural issues with the way our economic system has developed. Forces beyond an individual’s work ethic and self-control are shaping the environment, the cost/benefit calculations, and the opportunities for both formal and informal work. All of this creates a self-perpetuating cycle between informal economies and formal work for the poorest people in our country. Removing the little support that exists for the poor and criticizing them for not having a formal job and for engaging in informal economies will never be enough to improve the situation for more than a minimal percent of those living in deep poverty.
Police and Violence

The Connection Between Police and Violence

A few weeks back the United States saw huge protests against police violence and use of force by law enforcement officers. That violence and use of force falls disproportionately on minority populations who have been evicted and incarcerated at rates beyond what one would expect given the demographic breakdown of the United States population. Amidst protests of police brutality, in several dramatic and high profile instances, what the United States saw was extreme police aggression toward protesters, bystanders, and media reporters that seemed to confirm the idea that police use of force was out of control and in need of reform.


Following the protests, there were questions about whether police presence at protests actually incited more violence than it prevented. People asked if police needed to show up in riot gear at Black Lives Matter protests, and what would happen to the police and during protests if police forces had not shown up with riot gear.  Many argued that the police themselves sparked the violence that they responded to with force – in effect, the argument suggests that police showing up prepared for violence furthered the violence.


The idea that police enforcement lead to an increase in violence is one that I came across about a year ago while reading Johann Hari’s book Chasing the Scream. In the book, Hari argues that greater drug enforcement and more police action against drug users and dealers leads to more crime, not less. He writes, “Professor John Miron of Harvard University has studied the murder statistics and found that statistical analysis shows consistently that higher [police] enforcement [against drug dealers] is associated with higher homicide, even controlling for other factors. This effect is confirmed in many other studies.”


Arresting drug dealers and gang members doesn’t reduce the demand for drugs in a given region. Arresting low level drug dealers and gangsters doesn’t lead to much other than an arrest record for the individual, making it hard for them to find legitimate work, leaving drug dealing as one of the few lucrative opportunities available. Arresting a high level drug dealer or gangster creates instability. If you remove a leader in the drug trade, then a power vacuum exists. Competing gang members will vie for the top spot, and might also have to face off against rival gangs to defend their turf. Arrests and enforcement end up creating instability and more violence than they solve. This is part of why homicides increase after a gang member is arrested.


Similar to police forces that respond to protests with riot gear, and contribute to the likelihood of people actually rioting, police who arrest gang members and drug dealers actually create more violence and murder, not less. At a time when we are questioning the role and effectiveness of our police services, we should think about whether their actions achieve their intended goals, or whether their actions create a cycle that leads to more police enforcement. If responding in force creates situations for violence violence, then our police should not respond forcefully before it is necessary. If enforcing drug laws creates more violence, then we should ask whether we should be doing something else with our law enforcement.


Our police can be what we need them to be and what we ask them to be. The last few decades, what we have asked them to be is a quasi-militant force. The focus was not saving all lives, but on showing force and dominance. It is fair to ask if this is the goal we really want for the police, or if we want them to actually contribute to more safety and less violence for all lives in our communities.