The global financial crisis of summer 2008 rocked markets throughout the world. Evidence of its impact on the urban working poor is only just emerging but is likely to be profound. The paper challenges the accepted argument that globalization and economic growth is good for poverty reduction, arguing that the resulting increase in vulnerability of the urban poor in informal work outweighs the gains of growth. Despite early predictions that low-income economies might avoid the worst impacts of recession, emerging evidence indicates that this is not the case. Evidence from global activists suggests that the fall in price of goods and reduced employment opportunities for the very poor are acute. Urban planners need to seek new economic paradigms that recognize the contribution of informal economy to development, and adopt parallel ground-level initiatives to protect jobs and livelihoods during this crisis period.
Urban VoicesWe collect paper refuse from the streets. Every day each one collects at least one sack, and we used to sell these for Rps75 each. Now we only get Rps35 for sack. How can we live with this money? (Waste picker, Ahmedabad, India; interview, January 2009) Every year my sister in Boston sends US$200 at Christmas which I use to do small business selling food in the market. This year she only sent US$50 because she's lost her job. It's harder for me to pay the school fees and buy clothes for my children. (Market trader, Freetown, Sierra Leone; Oxfam, March 2009) Our factory supplied jackets to famous brand companies. In the peak time, the factory employed more than a thousand workers. There were less than 200 staying behind after the retrenchment last year. There was no order placement.