Working in the formal sector certainly has advantages over working in the informal sector. In India workers in the "organised sector" get paid a good deal more (30, 40 or even 1 00 percent) than those in the "unorganised sector" .42 In China, workers in large-scale industry were provided until the late 1990s with the "iron rice bowl" of a guaranteed income plus certain housing, sickness and pension benefits-all things denied to people migrating from the countryside to seek jobs.
Employers have not, however, provided such things out of the goodness of their heart. They need a certain stability in their labour force, particularly when it comes to skilled workers who they do not want to be poached by rivals during times of boom.43 In many industries, the more stable and experienced a workforce, the more productive it is. Capital is prepared to concede higher wages to certain of the workers in those industries because by doing so it is able to make more profits out of them. Hence the apparent contradiction-some sections of the world's workers are both better paid than others, and more exploited. But by the same token, workers in the formal sector have the capacity to fight back against capital in a way which it fears.
The growth of the informal sector rarely means the destruction of the formal one. The informal workforce in Brazil's most important industrial city, Sao Paulo, grew by nearly 70 percent in the 1990s, but the number of "formal" workers employed in the private sector still remained more than four times higher than the number of "informal" workers.44 It is wrong, as people like Paulo Singer did, to write of "deproletarianisation" .45 Rather what is happening is a restructuring of the workforce, with the hiving off by big firms of some tasks (usually relatively unskilled and therefore easily performed by a floating workforce) to small firms, labour-only contractors and the supposedly self-employed.
Far from the growth of the informal workforce benefiting the workforce in the formal sector, it has been accompanied by an increased exploitation of workers in this sector-and in many cases by a deterioration in wages and conditions. This has been most marked in Africa, where the scale of the decline in real wages for those with jobs in the 1 980s was so great as to beggar belief. A report in 1991 told of:
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The Runaway System