Rapid and uncontrolled migration from rural to urban areas to big cities causes serious problems on labor markets. Increases in rural-urban migration flows contribute to a larger urban labor supply and inevitably growing urban unemployment rate.
A side-effect of uncontrolled migration is deteriorating quality of employment, as it is evident from the increased informal employment rates.
Urbanization and informal sector are joint and rising trends in developing countries. Statistics say that in those countries more than half of workers are employed in the urban informal sector. Alioune Badiane, Director, Programme Division with UN Habitat in Nairobi, says thistrend is both a challenge and an opportunity.
“If you look at the structure of the informal sector, some 75-80 percent of the labour that is being done in big cities in the developing countries are operating from the informal sector. If you go to a city like Mumbai, and you visit a place like Dharavi, it is a slum, but it is a very productive slum, in which people are working and providing skilled labour and also semi-finished product that the auto industry uses,” Alioune Badiane said.
Another challenge, which is typical for today’s Russia, is huge inequality within one population in highly urbanized areas.
“You have people living at high quality of services, and others in slums and areas with non-existent services, and so we have to make possible that those two different levels of development meet to create a more uniform and ultimately more stable society,” said Francesco Mancini, Non-resident Senior Adviser, International Peace Institute (IPI) in Singapore.
Optimists would argue that urbanization does have its positive effects. In one of their joint annual reports, the World Bank and the IMF claimed that urbanization can accelerate progress towards the millennium development goals. Not only does it provide higher incomes than workers would earn on a farm and yield further opportunities to climb the income ladder. Big cities allow better and cheaper access to services and infrastructure. In other words, if managed well, urbanization can be a force for good.
