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Georgia: Promising first results from organising the informal sector

20 May 2008: About two thirds of Georgia’s working population are self-employed. The GTUC has no choice: it must try to organise them if it wants to be representative of the country’s workforce.

ITUC Union view:

In Georgia as in many countries, very few of the country’s self-employed workers are unionised. It is difficult for traditional unions to reach out to the hundreds of thousands of people working on their own, and even more difficult to involve them in collective action. The creation in December 2007 of a “Union of self-employed and commercial workers” shows however that the GTUC is ready to rise to the challenge. The new union is currently concentrating on traders in the big, permanent market places, who are easier to reach than more isolated traders. The aim however is to extend this, to reach as many self-employed workers as possible. The first results are encouraging: in three months, no less than 2,500 workers joined the union in the capital Tbilissi alone.

Zaza Agladze, President of the Union of Self-employed and Commercial Workers, explains why the informal economy has grown so much in Georgia : « It is a development that dates from the independence of Georgia. In the days of the USSR, the different stages of production, for example of a car, often took place in different republics. Many of these factories lost their links with each other when the USSR was dismantled, and ended up closing. Thousands of people lost their jobs, and many of them had to create their own jobs to survive. This trend grew during and after the civil war in Georgia at the beginning of the nineties. However, the government does not provide social security for the unemployed. In 2007 there were 1.4 million self-employed people in Georgia, including 100,000 in the public markets alone.”

From its creation the union began to distribute leaflets in the markets to encourage the market traders to join. “You have to talk to every worker, to convince them of the need to join, to explain what collective action is, from the beginning, which takes a lot of time and energy” says Zaza Agladze. “As soon as we recruit five people at the work place, we try to designate a leader who will take responsibility, in particular, for recruiting more members. As soon as there are 100 people, a committee is elected. If there are problems, there is a direct line that any member can call where one of the union’s employees will take note of what is happening and will contact us if it is urgent.” The union is not asking its members to pay dues yet, it is waiting to get its first tangible results before taking this step.

One of the union’s primary aims is to help these workers obtain a proper status. “The taxes paid by self-employed workers make up 25% of the government’s budget, but they receive virtually no social security in return” explains Zaza Agladze. “We would like for example to get better pensions for them: a supplement to the basic pension is calculated according to the number of years someone has been employed...but these years are not taken into account if the person has worked in the informal economy, even if they’ve been working hard for 10 or 15 years in order to survive and have been paying tax all that time.”

Manana Gakharia, a union delegate from the Lilo market, the biggest in the Tbilissi region with 5,000 workers, wants to raise awareness of these injustices. “The market workers have taken the risk of borrowing money to start up their activities, they pay income tax just as if they were employees, but they don’t get the same benefits. They dare not protest individually because they could lose their pitch on the market. But together, united under the union banner, it is possible to take their grievances to the highest authorities. We have also entered into dialogue with the market managers, who suspected us of being political party activists at first, but who later understood what we were doing. We haven’t had any spectacular results yet, because the union has only been in existence a few weeks, but if the number of members continues to grow as it has been, we will be able to make progress.”

The market workers are also asking the new trade union to combat certain abusive practices. Zaza Agladze : « The slightest administrative error can be punished by heavy fines, to the extent that there is talk of « official corruption ». For example, a trader who does not give a till receipt to a client is fined 500 laris (220 Euros) for the first offence, and 1,000 for the second, which is in many cases the equivalent of several months’ earnings. Yet some of the traders have little formal education and they can barely use this ticket system that they have never known. There has to be more flexibility. And also, this system has not been perfected: a trader has to pay tax on the basis of the amount shown on the ticket, but if a client later returns the merchandise, for example because it is faulty, the trader has no means of getting the tax back. Those selling second-hand goods are also dogged by administrative obstacles: they have to stock their merchandise for a month before they can sell it, to give the administration time to check up on a whole range of things. They can lose a lot of money in this time, because prices fluctuate daily, as does the dollar exchange rate. A lot of our members also complain that they have to pay for their pitch in the market, even when they are on holiday.”

university studies in electronics, there were no jobs in Georgia. It was during the civil war and the situation was very unstable. I have worked on this market for eight years with my mother and sometimes my brother and sister. I regularly travel to Turkey to buy the clothes I sell on this market. By the time I have paid for my travel, customs duty and the 235 laris (103 euros) rent for my pitch, I’m left with a profit of about 250 to 300 laris a month. The market is only open three days a week from 7.00 am to 3.00 pm, so I spend the rest of the time doing other small jobs to help me feed my family, such as being a taxi driver or a dog trainer. I have to do this because we don’t get any education allowance for our children, and my mother’s pension is only 65 laris a month (28 euros) even though she has worked for 50 years.”

Samuel Grumiau

The full publication can be downloaded here

this article has been tagged

Caucasus , Organising and recruiting , Informal economy, shadow economy , Organisational development , Georgia , employment policies
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