9 Things To Know About Slums
Author: Lydia Lo
Executive Summary
Slums are an asset to their cities. Slumdwellers vary greatly in their life prospects and problems faced, but even across different types of settlements in different cities and regions, slums’ causes and overarching solutions remain the same. Cities may not always develop slums, but when they do, it shows that they have not set up social safety nets or programs to release the potential of their human resources. While common approaches to “treat” slums focus on land tenure or sanitation, the key to upward social mobility lies in improving slum dwellers’ human capital and formal economic connections. This in turn enables them to accrue assets and break the poverty cycle.
1. Slums are still growing rapidly despite decades of attempts to address them
Since the U.S.’s 1930s Urban Renewal campaigns, governments around the world have been seeking ways to eradicate or “treat” slums. And yet, as of 2014, some 836 million people globally live in slums. This represents 33% of all urban residents. In Sub-Saharan Africa (SSA), the proportion of entire countries’ populations living in slums scrapes 90%. Despite tremendous variations across slums, issues common to all slum settings are a lack of adequate living space, insufficient public goods provision, and the poor quality of basic amenities, all of which lead to extremely poor health and low human capital.
2. Urbanization alone does not lead to slum growth; exclusive and inequitable land policies do
While slums have been a central facet of each country’s development path, they are not inevitable. “Big data” analyses on urbanization show that cities expand and increase sprawl during rapid population growth phases, but don’t naturally generate the perverse housing densities that characterize slums. Instead, slums arise when there is a failure on the government’s part to invest in affordable spaces and services that allow rural citizens to develop the human capital that would enable them to thrive in cities.
Countries where intensive agricultural land reform has taken place (e.g. South Korea, Japan, Taiwan and even China to some extent) never developed the kind of slums we see throughout South Asia and SSA. Effective agricultural land reform reduces slum growth because access to productive, agricultural land ownership acts as an alternative welfare system and safety net to fall back on for the rural poor as they make the transition into city life.
3. Poor infrastructure and services for slum dwellers drastically reduces urbanization’s benefits
Ordinarily, urbanization is a necessary part of a country’s development, and cities yield higher economic returns per person because of:
- Economic restructuring — services and manufacturing yield higher profits than agriculture
- Benefits of agglomeration — people exchanging ideas faster in higher densities
- Economies of scale — business and government save money by serving more people at once
Higher densities of migrant workers are associated with higher overall wages for local residents. When migrants represent a higher proportion of the city workforce, those cities become more efficient and productive (in China, they were up to 10% more productive).
However, when most citizens lack access to basic services (plumbing, clean water, roads, electricity, etc.), cities generate fewer benefits since these basic services are essential for physical and social mobility. Additionally, lack of services also creates greater costs from worsened congestion, disease transmission, pollution, conflict and crime.
4. Despite lack of public investment, migrants greatly benefit and expand cities’ economies
Slum dwellers work, live, learn, bank, and seek healthcare outside of government programs, safety nets or regulations. As such, they face greater challenges (diarrheal diseases from poor sanitation, lack of transportation to formal jobs, higher payments to water mafias, sham doctors, or loan sharks) that make them less effective economic and political agents. This is a loss for cities.
Even with these challenges, slum dwellers contribute to local economies through their purchases, paid taxes, and savings. They comprise a significant share — as much as 90% in some countries — of the urban informal work force, which some estimates claim is worth $10 trillion dollars. As one example, 20% of Africa’s entire GDP and 60% of its urban labor force is in the informal sector. In Chennai, India, the informal, urban poor represent 19% of the city’s population and their economic activity represents 14% of the city’s GDP. Dharavi, the famous slum in India, produces goods worth $600 million-$1billion each year. Even if these represent low proportions of cities’ overall GDP, slum economies provide much more to cities.
6. Slums generate new businesses and provide critical services within a city
In addition to filling low-cost labor roles that any city needs, slum dwellers create additional businesses that benefit the city. For example, waste pickers, many of whom are slum dwellers, are estimated to perform 50‐100% of waste collection activities in most developing countries. Auto‐ rickshaw drivers, often living in slums, serve 10‐20% of daily motorized road transport trips in Bangalore, Mumbai, Pune, and Rajkot, India.
Slum dwellers also form the great engine of manufacturing and services that drive many countries’ development. The “Census of India 2011” report shows that 16.7% of the houses in slums are used as factories, shops and offices. When it comes to entrepreneurialism, slum dwellers in China are 2–3 times more likely to start their own business than local city residents, and 40% of slum dwellers create businesses serving other slum residents.
7. Youth in slums have the potential and drive to succeed, but without outlets and opportunities, this drive can be dangerous
Due to higher mortality rates, slums tend to house more youths than adults. While most urban youth live in slums and are poor, cities provide them with opportunities, attractions, and possible trajectories that are simply not available in rural areas. One expansive survey youth across African slums found 93% want to finish secondary school, many hoping to use their educations in jobs that would help society. However, by age 20, these youths had become resigned to living in a slum and working simply to put the next meal on the table. This is likely why 85% of young adults in slums work in informal sector — resignation to poverty or a decision to simply serve their neighbors in the slums.
Such aspirations denied can prove dangerous. Where success is defined by financial prosperity and where slums are situated near wealthy neighborhoods, youth exposure to and yet immovable exclusion from middle or upper class lifestyles may force some young people to resort to crime.
8. Popular approaches to help slum dwellers usually target home ownership or sanitation
Governments and NGOs around the world have sought ways to improve life for slum dwellers. The most popular initiatives use community-government partnerships to design slum housing and tenure programs or public sanitation programs. Indeed, the UN Sustainable Development Goals (SDGs) target adequate, safe and affordable housing and access to clean water or toilets.
However, these approaches fail often to eradicate the risks slum dwellers face. In India, housing campaigns and upgrading projects do not reduce threats of evictions. Another study across multiple slum upgrading interventions found no effect on the income of slum dwellers following a slum upgrade. Similarly, widespread NGO and community-led sanitation campaigns’ effects are limited by both time and space, and don’t deeply affect the roots of migrants’ poverty.
9. Breaking poverty cycles in slums takes investing in youths’ human capital and connecting them with opportunities in the formal economy
Multiple slum studies from China, India, Ecuador and Kenya show that the most influential factors in spurring upward mobility for slum dwellers are multifaceted investments in human capital and economic opportunities (see Appendix 2). One researcher noted, “Upward social mobility is not a simple story. However, analysis of the relationship between household assets and income mobility shows that the most common route out of poverty for most migrant households is a gradual accumulation of a range of assets as opposed to a dramatic change based on one asset.”
This means that one-stop interventions that provide migrants with home ownership alone, a vaccine, or a toilet will not be enough to help them break out of poverty. Instead, the key differentiator between youth who leave the slum and those who don’t lies in higher education and job training. Indeed, without job opportunities outside of slums and the training to attain them, education is worthless for slum dwellers. Each year of education improves slum youths’ future earnings by 3%, but this drops to 1% if the student remains in a slum.
Author: Lydia Lo
