How the poor earn their money

How the Poor Earn Their Money
Walking down the main street of the biggest slum in the medium sized Southern Indian city of Guntur at nine in the morning, the first thing one notices are the eateries: In front of every sixth house that directly faced the road, by our count, there was a woman sitting behind a little kerosene stove with a round cast-iron griddle roasting on it. Every few minutessomeone would walk up to her and order a dosa, the rice and beans pancakes that almost everyone eats for breakfast in South India. She would throw a cupful of the batter on the griddle, swirl it around to cover almost the entire surface and drizzle some oil around the edges. A minute or two later, she would slide an off-white pock-marked pancake off the griddle, douse it in some sauce, fold it in anewspaper or a banana leaf and hand it to her client, in return for a rupee
(roughly 15 cents, at PPP).
When we walked back down that same street an hour later, the women were gone. We found one inside her house, filling her daughterfs plate with lunch that she had cooked while making the dosas. She told us that later that day, she was going out to vend her saris, the longpiece of decorativecloth that Indian women drape around themselves. She gets plain nylon saris from the shop and stitches beads and small shiny pieces on them, and once a week, she takes them from house to house, hoping that women would buy them to wear on special occasions. And they do buy them, she said confidently. All the other dosa women we met that day had a similar story: once they are done frying dosas, theydo something else. Some collect rash; others make pickles to sell; others work as laborers. Entrepreneurship and Multiple Occupations Among the Poor All over the world, a substantial fraction of the poor act as entrepreneurs in the sense of raising the capital, carrying out the investment, and being the full residual claimants for the earnings. In Peru, 69 percent of the households who live under$2 a day in urban areas operate a non-agricultural business. In Indonesia, Pakistan, and Nicaragua, the numbers are between 47 and 52 percent. A large fraction of the rural poor operate a farm (except in Mexico and South Africa, between 25 percent and 98 percent of the households who earn less than a dollar a day report being self employed in agriculture).8 Moreover, many of the rural poor (from 7percent in Udaipur up to 36 percent in Panama) also operate a nonagricultural business.8 The low level of agriculture among the extremely poor in South Africa is easily explained. The black population,which contains almost all of the extremely poor people, were historically under the apartheid regime not allowed to own land outside the ghomelands,h and most of the land in the homelands was notworth cultivating.
Many poor households have multiple occupations. Like the dosa women of Guntur, 21 percent of the households living under $2 a day in Hyderabad who have a business actually have more than one, while another 13 percent have both a business and a laborerfs job. This multiplicity of occupations in urban areas is found in many other countries as well, though not verywhere. Amongthose earning less than $2 a day, 47 percent of the urban households in Cote dfIvoire and Indonesia get their income from more than one source; 36 percent in Pakistan; 20.5 percent in Peru; and 24 percent in Mexico. However, in urban South Africa and Panama, almost no one has more than one occupation and only 9 percent do so in Nicaragua and Timor Leste. This pattern of multiple occupations isstronger in rural areas. In Udaipur district, as we
discussed earlier, almost everybody owns some land and almost everybody does at least some agriculture. Yet only 19 percent of the households describe self-employment in agriculture as the main source of their income. Working on someone else´s land is even rarer, with only 1 percent reporting this as their main source of income. In other words, the...