A Dualistic Labour System?

A Critique of the 'Informal Sector' Concept: II: A Fragmented

Labour Market
Author(s): Jan Breman
Source: Economic and Political Weekly, Vol. 11, No. 49 (Dec. 4, 1976), pp. 1905-1908
Published by: Economic and Political Weekly
Stable URL: http://www.jstor.org/stable/4365157
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Dualistic

Labour

System?

A Critique of the 'Informal Sector' Concept

II: A Fragmented Labour Market
Jan Breman
This paper examines the utility of the concept of the 'informal sector'.
The author argues, partly on the basis of research into labour relations in a small town in western
India, that the concept of the informal sector is analytically inadequate. The informal sector, he suggests, cannot be demarcated as a separate economic conzpartment and!or labour situation.
In Part I of the article it is argued that any attempt to demarcate the informal sector will give
rise to numerous inconsistencies and difficulties. Moreover, by interpreting the relationship of the informal sector to the formal sector in a dualistic framework and by focussing on the mutually exclusive
characteristics, we lose sight of the unity and totality of the productive system.
In Part 11 of the article, the author suggests that tather than divide the urban system into two
segments, it is preferable to emphasise the fragmented nature of the entire labour market.
Finally, in Part III, the author considers the social classes which are usually associated with the
urban labour force.
[Part I of the article appeared last week and Part III will be published next week.]
labour in this respect.34 In other
words, gradations, rather than watertight
divisions. To split the employment
system into two sectors is, therefore,
to adopt an approach which is overrigid and too little differentiated.
I have already drawn attention to
the fact that various authors try to
solve this problem by dividing the
labour market into more than two levels.
But this concession is not sufficient if
it is only intended to indicate the
existence of a differentiated horizontal
structure. Each sector has its own
In my fieldwork in a district town internal variation, and vertical barriers
and its rural surroundings in South between the parts of one sector are
Gujarat, I initially attempted to divide frequently far more rigid than its horithe local labour market into two levels. zontal dividing lines. For example,
The results of this research show that outsiders tyrpically tend to consider
it is fairly easy to find two extreme various types of poorly-paid, unorganised
categories that oppose each other. On and unskilled labour as substitutable.
the one hand, those who have to earn Empirical research, however, demonstheir daily bread with the aid of poorly- trates that the labour force threatens
paid, unskilled, intermittent work to disintegrate into small and fairly
which, due to the considerable physical independent units - creating a situation
effort involved, is considered of low which, also for those who operate on
standing; on the other hand, those in the market, is difficult to survey.
permanent employment for which forIt is not unusual for the term 'labour
mal education or trained skills are re- market' to be reserved for the structuring
quired - a job with a fairly high and of employment in the modem sector
often regular wage which ensures se- of the economy which is characterised
curity and social respectability to the by free and mobile labour. Where this
proffles are is not the case - ie, where employworker. However, these
seen most clearly at the extremes of ment conditions are not standardised,
the two poles of the labour force. As relationships are personal, and reaction
the extremes to fluctuating supply and demand is
the distance between
lessens, similarities in recruitment, inflexible - it is said that the market
working conditions, and bargaining is imperfect, or even that a labour
This
procedures gradually outdo the diffe- market simply does not exist.
rences between various categories of point of view, advocated by Todaro for
OF EMPLOYMENT
STRUCTURE
ATTEMPTS to conceptualise the informal sector encounter problems, arising
from the impossibility of demarcating
its activities as an isolated sector of
the urban economy. The economic
system encompasses various modes of
production - with labour relations
which are more or less attuned to the
particular mode - without these being
crystallised into independent segments.
The urban labour force inevitably has
some dualistic tendencies.

example,35 means in effect that the

employment norm refers to conditions
that apply only to a small sector of
the total labour force, as Weeks has
rightly remarked.36
In my own terminology, the concept
'market' should be applied to the entire
labour force. The structure of this
market is not dualistic, but has a far
more complex ranking. This is illustrated by the considerable fragmentation
of the labour force, particularly in the
lower regions of the urban economy
where labour relations are rarely formal
in the sense stated above.
Does this mean that the labour
market is pluralist rather than dualistic? Not if this is taken to imply a
great many separate and identifiable
sub-markets. If there is a tendency to
partition off a sector by excluding 'outsiders', this in no way testifies to the
closed circuits, each
presence of
characterised by its own rationale and
considerable homogeneity. To - take
such a rigid compartmentalisation as
our point of departure would be incorrct for various reasons.
In the first place, the tendency to
fence-off a particular field of employment has to be seen as an attempt to
monopolise certain occupational roles or
activities for social equals in a situation
of extreme. scarcity. Conversely, attempts are made to penetrate another
sphere of work - by establishing a
bridgehead and by using various mechanisms and channels to facilitate access
from another environment. However,

1905

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December 4, 1976

ECONOMIC AND POLITICAL WEEKLY

this particularist nature of the labour

system should not be equailsed with
the existence of more or less autonomous circuits.
Secondly, it should be realised that
the poor try to increase their security
within the urban system by entering
into dependency relations with social
superiors; in doing so they accept a
wide range of contractual and semicontractual commitments. They have
a fundamental claim to a minimal
livelihood, to the bare necessities which
would enable them to continue to
live - a claim which nowadays is no
longer duly and completely honoured
by the other, stronger, party. Complementary to this expectation of a
basic living allowance, posited as a
moral imperative, is the willingness on
the part of the weaker party to acknowledge infinite accommodation and gratitude, whether this has to be given
material or immaterial expression. Work
forms part of this obligation and has to
be supplied where, when, and to the
degree required by the creditor, even
if other members of a household or
a Wider circle of equals have to be
mobilised. For this part of the urban
population, work is not the basis for
a more or less independent existence
but the outcome of a comprehensive
dependency relationship. This interpretation of labour performance as an
element of the social distributive system
indicates that employment is not fully
crystallised into a separate framework
with its own institutional arrangements
and consistency. In such circumstances,
labour is fluid in character, without
any question of differentiated and
mutually exclusive sub-markets.

come of team research carried out some

years ago in South Gujarat.38
PARTICULARISM

AND

SCARCITY

Lack of work is the predominant

characteristic of the local economy in
Gujarat, also in the urban sector. This
naturally has its effects on the structure
of the labour market. To start with,
there is no question of equal chances
for all in the search for work, in terms
of acceptability for employment. Many
kinds of work have only minimal
requirements are regards education and
experience, but not all those who meet
these requirements have equal access.
The extremely skewed distribution of
economic opportunity among the various
population groups is in no way a new
phenomenon. In the past, an important
dimension of the social system was the
linkage of labour division with particular social categories. The fact that
membership of a certain caste, region,
ethnic group, tribal unit or religious
community is still an -important factor
in the search for employment, causes
many people to conclude that the
traditional system is still in force, though
with some modifications.
I would maintain, however, that the
persistence of primordial sentiments is
principally due to the situation of
scarcity of work and not due to 'force
of tradition', constancy, and margins
for accommodation of a social system that' is involved in a process
of modemisation. The durability of
tested loyalties is linked to the advantages offered by such ties under highly
unfavourable economic conditions. If
employment opportunities are slow to
expand and population growth is rapid,
Thirdly, the criteria which are used the sources of existence will be under
to distinguish various circuits do not pressure, and people are likely to fall
run parallel. It may be very useful back on familiar social mechanisms and
to know the differences between regular make use of them to exert influence
wage labour, for instance, and self- and to promote their own interests.
In view of the situation of extreme
employment, but this distinction is not
necessarily parallel to that between scarcity, however, it would be a fallacy
protected and unprotected labour, to think that competition for work on
formal versus informal activities, orga- the labour market is absolute. Some
nised or unorganised employment, economic functions are linked so much
guaranteed security against insecurity. to particular groups that penetration by
In other words, these criteria do not outsiders is almost inconceivable. This
cumulate in a clear and consistent closed-shop character of some activities
stratification.
is naturally connected to income, level
Labour market fragmentation is the of education, etc, but it also makes
most appropriate term for the situation itself felt in other respects. It is too
which I shall describe,3d and for this simple to seek the reason for evident
exercise I shall also draw on the out- cases of self-restraint in cultural inhibi-

tion. Apart from the unfamiliarity

with the type of work and insufficient
knowledge of opportunities, lack of
access is one of the most important
structurally-determinedimpediments. The
linkage between supply and demand
originates in a particularistic fashion,
and is part of the reason why the
number of applicants for some activities
is found to be insufficient even though
labour is available in abundance.39 But
it would be rash to conclude that
labour market behaviour becomes
irrational or imperfect once universalistic
norms no longer form the guiding rule.
The particularistic orientation of the
labour market does not automatically
mean that the higher social classes
succeed in monopolising the most
attractive jobs. It is true that their
members have the advantage following
from their education and contacts, but
as other social categories gain access
to formal education they are gradually
able to penetrate to those jobs that are
allocated on the basis of primordial
group cohesion. In many countries,
some shift in the social distribution is
definitely perceptible, although this
tendency is hardly likely to be very
pronounced in a tight labour market.
Nevertheless, it may happen nowadays
that younger members of the lower
middle classes are educationally equipped for relatively well-paid and highlyqualified jobs. They literally try to buy
their way in to the modem sector in
an attempt to compensate their lack of
influence and protection. In this way,
they obtain access to greatly coveted
jobs in formal organisations with the
prospect of greater security and higher
social prestige. These intruders create
an outpost through which they try to
bring in relatives and otber social
equals.
Particularistic loyalties are not only
found within the same social class. Job
allocation is also coloured by patronage
relationships, particularly those jobs over
which people of high-rank have some
say. These peple then use their rank
to benefit clients in the lower rankings
of the social hierarchy. Control. over
a iiunuberof jobs or over licences which
are required for certain ecgnomic acti
vities can be used to political advantage, economic profit and social prestige.
Personal intervention, through the use
of protection, occurs both horizontally
and vertically on eveiyr level of employ-

1906

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ment and is not tied to favouritism by

social elites alone. The ILO report on
the employment situation in Kenya devotes a separate section to the phenomenon of labour brokerage,40 involving
the figure of the jobber who is particularly concerned with unskilled, unogranised, and poorly-paid employment,
usually in the form of gang labour.

almost no money or without too much

trouble and with few tools, because
those already present obligingly make
room for them, is a dangerous and misplaced romanticisation of the hard fight
for existence at the bottom of the urban
economy.

Even the shoeshine-boy, the common example of work which, although

it might not provide an opulent
standard of living would at least
MOBILrTY
appear to be within reach of any
resourceful youngster is in fact not an
Scarcity not only has its repercussions
open trade at all and working condion the question of who should be
tions are also more constricted thanconsidered for which type of work and
might be assumed. In an interesting
description of this type of streetwork
in what way; it also has its effect on
in the Indian town of Patna, Bhattamodel
a
in
Todaro,
labour mobility.
charya distinguishes between two
that is as simple as it is naive, assumes
categories of shoeshiners.42 Members
of the first group have a fixed place
that the unskilled workers who migrate
of work for which they sometimes
to the towns first drift into what he
have to pay rent to an intermediary
and
sector,
traditional
calls the urban
who has leased the right to do so
from the municipal authorities. These
subsequently move on to jobs in the
people form a more or less cohesive
modem sector. This model is a striking
group, are equipped with proper tools
example of the assumption that small(box with accessoies), and demand
a fixed sum for their work. The
scale, labour-intensive activities act as a
'non-standardised' itinerant shoebuffer ,zone and are carried out by a
shiners, on the other hand, are not
floating labour force. This way of
organised in a group, have few or
thinking has various shortcomings. In
only very poor tools, and do not
have standard prices. Almost all of
the first place the rural migrant is
them are of the same social class, a
elevated to a uniform type, whose
low-ranking Moslem community. To
mobility is laid down in a completely
gain access, a candidate needs to
have connections with a working
mechanistip pattern. In practice, howshoeshiner and sometimes to have
ever, access to employment occurs at
been apprenticed to him without
different levels, dependent on the
payment for a certain period. Only
socio-economic background, education,
then is the newcomer given the
opportunity to rent a shoeshine box,
availability or lack of protection, etc.
for which he then has to pay the
Under otherwise equal conditions, deowner a sum equal to half his daily
terminants of a high ranking in the
takings. Bonds of this sort often
continue almost indefinitely because
rural system are converted into advantmany younger shoeshiners cannot
ages over other categories of migrants
afford to buy their own material and
who, conversely, see their former
are, therefore, compelled to rent their
boxes from older colleagues or from
backward position within the village
outsiders.
continued in the urban environment.
Examination of the social context of
in
that
idea
the
In the second place,
the town it is possible to progress to the informal sector shows clearlv that
better-paid and more highly qualified access to it is not so easy as is usually
work is largely fictional. Those who assumed.43 In other respects, too,
join the lower ranks of the urban labour activities in the sector are closed in
system usually remain there,41 and even character and are typified by depenhorizontal mobility is limited. Shortage dency relationships which give the
of work and limited chances to accu- concept of 'self-employed' a rather
mulate any capital or to invest in any dubious meaning.
The difficulty in capturing a place
formal education, can lead to a position
of defensiveness in which one's ac- on the labour market and the necessity
customed sphere of activity is protected of doing it within the restricted socioas much as possible and entrance to it economic network of which one forms
is restricted to those who can appeal part, does not mean that there is no
to particularistic loyalties - although vertical mobility. Although the road
upwards is often blocked, the road
the success in doing so may vary.
The frequently heard view, that downwards is all too easy to traverse.
small-scale and non-institutionalised As the inflow to the labour market
activities are capable of almost unlimit- continues, pressure on the sources of
ed expansion and that newcomers can livelihood increases, thus accentuating
set themselves up as self-emeployedwith the competition for work. From one

generation to the next, more and more

families have to face the problem of
consolidating their position in society.
Inequality then seems to increase rather
than decrease. For example, a particular job nowadays requires a higher
level of education than was formerly
the case, the access threshold to all
levels of employment having been raised
during the last few years. This has a
socially depressive effect. It is discourging
to have to accept employment of a
lower level than one's educational
attainments. The consequences for the
lower working classes are even more
serious. Jobs, which formerly required
little if any formal education, now only
go to those who have a school-leaving
certificate,44 but many households lack
the material resources which would
enable them to make such a lengthy
and ultimately hazardous investment.
It is reasonable to assume, therefore,
that although more people participate
in the education process, their actual
performance cannot keep up with the
higher demands which are set as a result
of the surplus on the labour market.
This process of marginalisation denies
the younger generation access to jobs
which are still filled by older, lesseducated members of the same family.
In these circumstances, we can only
conclude that the lower socio-economic
groups are mobilised in the urban
economy under increasing tensions and
under conditions which clearly illustrate the worsening of their overall
social and economic position.
LAsouR RESERVE AND POLARISATION
Do these impoverished masses represent a potential threat to those members
of the working population who are
employed on a regular and contractual
basis, thus enjoying fairly considerable
protection and security? Authors who
consider that the small self-employed
and the unorganised workers represent
an industrial reserve army are inclined
to give an affirmative answer to this
question. In their opinion, the presence
of what is actually a labour surplus
acts as a mechanism which exercises
pressure on the wage levels of the
regular labour forcre, hampers their
collective action, and generally detracts
from the stability of their existence. It
is true that many activities of an informal nature seem to be redundant or
at least would be done away with immediately if employment opportunities
in the formal sector were to be im1907

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proved.45 But this does not imply that gon that, in Latin America, as in numbers of the urban poor
are caught
marginal categories in the production other conutries of the Third World, up in a competitive struggle for
their
process actually represent an industriai the expansion of non-agricultural pro- mere existence. The tensions
to which
reserve army. Such a hypothesis can duction is no longer dependent-on the this gives rise often
follow particube rejected without further ado if the quantity of available manpower but laristic lines. These are
then
highdistinction between formal and infor- rather on the quality of the technolo- lighted as isolated and
self-sustaining
mal sector is accepted as valid, in gical improvements which are intro- social and political
phenomena withwhich the
non-competitive character duced.
out any proper identification of the
of the two circuits of the economy is
From this point of view, the man- economic background and its dynamics.
taken for granted. According to this
power available in the market no During the last few years, conflicts
of
longer constitutes a
'reserve' for this nature have become
view, the more educated and specialismore
severe
those
hegemonic levels of industrial
ed workers in the formal sector who
production, but an excluded labour and more numerous in many cities of
are recruited on the basis of standard
force, which as changes in the tech- the Third World, and there is every
nical composition of capital pro- reason to assume
and impersonal procedures, represent
that these contracts
gress, loses in a permanent and not
an elite, with whose interests the trade
a transitory way, the possibility ofi will continue to intensify in the future.
unions are exclusively concerned. It
being absorbed, into those hegemo(To be continued)
nic levels of production, and espeis maintained that casual and mostly
cially,
in
urban-industrial
production
unorganised workers in the informal secwhich has hegemony within the
Notes
tor are quite unable to compete with
overall economy.48
such an elite, and emphasis is someIn view of the shortage of highly- 34 For a detailed report, see Breman (1975).
times placed on the lack of affinity and qualified manpower and the need for
substitutability by reference to the un- stable and continuous relations in lar- 35 Todaro (1969), 139, note 3, and
(1973), 50.
employable poor, i e, an approxima- ge-scale enterprises, there is little 36 Weeks
(1973), 62.
tion to the conception of the lumpen chance of an industrial reserve being 37 Mliller (1971) uses
the term
proletariat.
'balkanisation' to describe this siformed for this sector of the economy.
tuation.
If, contrary to this view, the funda- On the other hand, in small-scale
mental unity of the entire production workshops, artisan establishments, re- 38 "Modernisation and Social Change
in South Gujarat" is the working
system is emphasised under rejection tail shops, and similar types of activititle of a forthcoming volume editof the idea of urban dualism, it can- ties, people have to work
ed by Baks, Hommes and Pillai.
under con39 Standing (p 2) "...
not be automatically hypothesised that ditions which are in
it is intricomplete agreeguing that in Kingston where open
the unskilled and uneducated do form ment with the classical
concept of
employment is over 20 per cent
an industrial reserve army. I have 'exploitation', a situation
of the active labour force, even
aggravated
already posited that the employment by the fact that workers are
core or primary employers complain
subject to
of shortage of suitable workers
system is organised on a particularistic arbitrary and immediate dismissal. In
in all grades, not just highly skillbasis. The attempt to fence-off parti- many cases, relations
ed workers. This is even more
between emcular fields of work is intended to ham- ployers and
evident in the peripheral formal
workers in these small
sector." See also Breman (1975),
per external access, but it also prevents workshops and enterpn'ses
in the disChapter II. .
people taking steps in the opposite di- tributive sector are
standardised, to a 40 "Employment, Incomes and Equalirection. This contradicts Meillassoux's certain extent regulated
ty", Technical Paper No 23, 509by legal staassumption of an almost inexhaustible tutes. However, under
510.
conditions of
41 Cf Papanek, 15.
reservoir of free and mobile workers.46 a surplus labour
market, the unskilled 42
Bhattacharya (1969),
Mioreover, employers and brokers are nature of most of the
work, the unor- 43 This hypothesis is 167-174.
rebutted by
able to control labour through depen- ganised nature of the
work force, and
Bienefeld (1974), 21, 44 and 69;
dency relationships - wage advances, the
by McGee, 34-35, and also by
non-implementation of protective
debts, housing, and other forms of measures, labour
Temple, 79.
relations have gra44 Cf Breman (1975), Chapter II,
'favouritism'. True, the linkage be- dually become
informalised. And the
Bienefeld (1974), 15.
tween supply and demand on the la- hypothesis that an
industrial reserve 45 Dasgupta (1973), 72. Gerry (p
bour market is regulated within a exists at this level
42) comments that a proportion of
thus becomes more
single institutional framework, but the acceptable.
the small self-employed in Dakar
have formerly been in wage emchannels involved are many and aie
I have earlier tried to explain that
ployment but that they lost their
very often only indirectly related to there is good reason for
jobs as a result of economic remisgivings on
each other.
cession.
the undiminishing absorptive capacity
On the other hand, the fragmenta- which is supposed to characterise the 46 Meillassoux's interpretation- (1974)
is regarded as outdated by other
tion of the labour market should not lower regions of the urban economy.
Marxist authors due to the debe unnecessarily exaggerated. My own Adherents of this view consider that
velopment of a new international
division of labour. See
research has shown that a surplus of mechanisms of shared poverty will
Frobel,
casual labour, which is also characte- make it possible in some malleable 47 Heinrichs and Kreye (1976).
Breman
(1975),
Chapter III;
rised by fairly high mobility, exercises fashion to provide a living - however
Gerry, Chapter VIII.
a negative influence on conditions in marginal and insecure - for growing 48 Obregon (1974), 418.
large enterprises, and can increase the numbers of small self-employed and 49 Friedmann and Sullivan, 400401; Papanek, 14.
tendency to 'informalise' labour rela- casual labourers. If this assumption
tions; particularly at the lower eche- has ever had any validity, this is cer- [References will appear at the .ed of
lons.47
However, I agree with Obre- tainly-no longer the case.49 Growing the concluding part of the article next
week.]
1908

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