Requiem for Stability: Impact of the Global Financial Crisis on the World's Working Poor

Abstract

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.

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