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Guatemala: Casual Labor Market Fundamentals in the Dry Corridor Livelihood Zones, February 2019

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Executive Summary

Income earned by poor and very poor households through casual labor constitutes an important component of livelihoods in many FEWS NET countries, with important implications for household purchasing power and food access. In this context, casual labor income is defined as income (cash or in-kind) earned through informal short-term or part-time employment in sectors such as agriculture, construction, or other seasonal, temporary, or migratory work. Despite its widely documented importance, FEWS NET has, to date, had a substantial knowledge gap related to casual labor income levels and variation (seasonal or otherwise) in the countries monitored. This is in stark contrast to say commodity price monitoring, which the project does regularly and effectively, through primary data collected via market price enumerators (using existing and widely recognized methods) or via secondary data collected through Market Information Systems (MIS) and/or technical partners in the countries where we work. Gaining a better understanding of the levels and variations in income earned by poor households through casual labor activities is essential to improving FEWS NET’s evidence base used to understanding food access dynamics in focus areas and contributes to more robust food security analysis.

To address this knowledge gap, FEWS NET designed and implemented a series of interrelated activities in 2016 and 2017 to better understand casual labor market dynamics, the factors that influence casual labor supply and demand, and to identify indicators and data sources that can be used to provide insight on the current or projected casual labor market situation. The report summarizes the findings from one set of activities focused on casual labor dynamics in Guatemala, where according to the 2016 Livelihoods Profiles, the poorest wealth groups throughout the country depend heavily (between 70 and 100 percent) on casual labor as an income source. The results will be used to inform monitoring efforts as inputs to scenario development for food security early warning.

The analysis in Guatemala focuses on an area of the country known as the “Dry Corridor,” an arid area extending from west to east across the central part of the country, comprising livelihood zones GT06, GT07, GT08, and GT10 (Figure 5). This area was prioritized because casual labor in these zones stands among the main sources of income for the poorer population, although typically characterized by erratic and low-value employment throughout the year. The Dry Corridor is often affected by food insecurity (IPC Phase 2 and Phase 3) and is regularly among areas of concern in FEWS NET’s food security monitoring efforts. More broadly, the relevance of casual labor among sources of income for the poor and very poor increased notably during the past decade. Its informal and temporary nature makes it challenging to document and measure, and historical information and data on the subject are limited. Despite its central role in rural livelihoods, in-depth knowledge and information adequate for monitoring casual labor dynamics are scarce, creating a clear entry point for FEWS NET’s work as a contribution to the food security community and network.

The series of activities leading to this report followed a mixed-methods, multi-stage approach. First, FEWS NET conducted a preliminary literature review of casual labor in Guatemala that allowed an initial understanding of the dynamics and key actors. This review shed light on the subsectors that most prominently demand casual labor, the geography of their production, the role of the informal sector, and the general wage levels. Then, taking into consideration (i) FEWS NET’s understanding of local livelihoods and the relevance of casual labor as a source of income for poor and very poor household and (ii) FEWS NET’s areas of concern with respect to food security outcomes, four livelihood zones in the Dry Corridor were prioritized for further analysis and subsequent monitoring efforts (Figure 5).

Second, these zones were further explored through a field assessment conducted by FEWS NET staff between July 17 and August 5, 2017. Through the field assessment, FEWS NET sought to gain a deeper understanding of casual labor dynamics in the prioritized livelihood zones, assess the relevance of specific subsectors for employment opportunities for the poor and very poor; fill information gaps remaining from the literature review, triangulate information, and establish working relationships with relevant subsector-specific stakeholders. The assessment showed that seven subsectors employ the majority of casual laborers (migrant and non-migrant) in the livelihood zones analyzed. In order of importance, these are: coffee, vegetables (such as peas and French beans), sugarcane, Fruits (such as bananas, apples, and peaches), maize, beans, and construction.

Third, the desk research and field assessment results were validated and complemented by a stakeholders’ workshop that took place from November 6–10, 2017, in Guatemala City. Representative stakeholders from each of the seven subsectors identified above as relevant to casual labor dynamics in the Dry Corridor were in attendance from the private sector, government, and the development community. Among the main workshop agenda items were in-depth discussions with each stakeholder group about possible strategies for monitoring labor dynamics in each of the subsectors (including indicators to monitor and methods for gathering those data), and identification of data that can provide insights on households’ capacity to earn income and access food. Annex 1 provides an overview of the stakeholders present at the workshop. This document presents the results of the analysis and stakeholder consultations.

The results show that the vegetable and fruit subsectors have increased in importance in terms of annual casual labor demanded, partially filling up a seasonal gap in labor opportunities. This has reduced the movement of migrant workers in the livelihood zones analyzed. Beyond a general characterization of the subsectors that provides a general understanding of their particularities, the document presents:

  • The nature, quantity, and timing of the casual labor required by each subsector
  • Key actors and factors involved in labor demand and supply
  • The dynamics of the hiring and payment process
  • The shocks that affect each subsector
  • Key aspects to consider for setting up a casual labor monitoring system for food security early warning

This activity found that despite the roles of the coffee and vegetable subsectors in the Guatemalan economy due to their high export levels and their high demand for casual labor (Table 1), these subsectors lack associated monitoring systems that capture casual labor dynamics. Conversely, well-established secondary data collection and reporting systems already exist to effectively monitor key indicators related to labor dynamics in the sugarcane and banana (with the highest demand among fruit) subsectors. FEWS NET staff will continue to solidify their relationships with these institutions to ensure the timely flow of these secondary data. The maize and bean subsectors depend most heavily on household labor, rather than hired casual labor, creating unique challenges for monitoring labor dynamics. While the use of casual labor is prominent in the construction sector, a better understanding of those dynamics and the associated monitoring strategy and data sources is an important area of future exploration.

Therefore, based on the information learned from this process, key data gaps, and the possibilities for collaboration with key partners, FEWS NET proposes monitoring objectives and strategies in the short, medium, and long term. In the short term, FEWS NET will concentrate immediate future efforts in Guatemala to support monitoring efforts that are in the early stages by partner organizations in the coffee and vegetable subsectors. Coincidentally, both subsectors are supported by organizations that collect and report on production monitoring data and are open to adding additional data monitoring modules to help meet FEWS NET needs. These organizations are well known within each subsector, and currently implementing USAID-funded projects. Since FEWS NET strives to ensure the quality and sustainability of data collection efforts of partner institutions, it is reasonable to leverage and support these efforts to collect labor market monitoring data for food security analysis in the country rather than FEWS NET establishing its own monitoring system. In the medium term, FEWS NET will engage with institutions monitoring labor market dynamics in the banana and sugarcane sectors. In the long term, FEWS NET will engage with both public and private organizations involved in monitoring the maize, beans, and construction sectors to identify tailored and relevant labor market monitoring strategies. The Monitoring Plan section of this report provides further details of the proposed monitoring indicators and approach.