New Collaborative Aims To Boost Investment In Companies Creating Quality Jobs For The Very Poor

The numbers are pretty startling. About 8% of the global population live in extreme poverty—meaning they work for less than $2.15 per day—according to the World Bank and they do so without any health and safety protections or social benefits.

That’s why a group of impact organizations just formed the Dignified Jobs Collaborative, aimed at increasing investment in companies creating dignified jobs for people living in extreme poverty in developed markets.

“This is a way to bridge a conversation that is beginning in developed countries about quality jobs with questions about what quality looks like in environments where most of the jobs are informal,” says Kate Cochran, CEO of Upaya Social Ventures, the collaborative lead partner.

Also involved are Dalberg, a management consulting design firm focused on impact, Aspen Network of Development Entrepreneurs, which focuses on entrepreneurs in developing economies and 60decibels.com, an impact measurement company that provides benchmarks of impact performance.

Definition and Approach

At the moment the collaborative’s working definition of quality jobs includes five criteria: inclusive access, meaning hiring women, among others; fair pay and how that relates to global minimum wage levels; benefits like health insurance or a savings plan; safety and training; and skills building and opportunities for growth.

The approach rests on surveys Upaya has done of about 3,000 jobholders employed by its portfolio companies. Upaya makes impact investments in early-stage enterprises, with a focus on companies creating jobs for the very poor. With that information in hand, the goal is to bring together other impact investors and interested partners to build the evidence base for what dignified jobs look like in an informal environment.

Ultimately, according to Cochran, they hope to attract more investors to what she calls missing middle companies, enterprises that are too big for microfinance and too small for traditional bank financing, but are also significant job creators. “The long game for us is, by bringing more visibility to what good jobs look like in emerging economies, we’re hoping more investors will come into this space,” says Cochran. “My goal is to make the missing middle go away.“

The initial focus is on India, with plans to expand to other emerging markets over the next 12-to-18 months. The collaborative is also surveying job holders from portfolio companies to create a benchmark that can provide measurable impact results. From there they’ll create a framework, also hosting sessions to help the wider investment community use it.

Ensuring that people have dignified jobs will have multiple other benefits, according to Upaya. For one thing, it will contribute to building a green economy, as well as an equitable workforce that works for women. Plus, better data on job quality in investment portfolios will help people in the field include dignified work, not just the number of jobs created, as an important metric for measuring impact.

Upaya’s Mission

Launched in 2011, Upaya has invested $1.3 million in 34 companies. Its founders, who worked in microfinance, felt the very poor were the wrong fit for that approach. “A loan alone is not the right tool for people who are very vulnerable,” says Cochran. “They need stable jobs and to know they will earn a certain amount of money, even if that isn’t a large amount.”

In November, Upaya announced its most significant exit from a portfolio company—Tamul Plates, based in India, which makes disposable plates and bowls from palm tree leaves. Upaya sold its stake for more than double its investment to a family office in India; Meanwhile, Tamul has created over 3,000 jobs, a nearly tenfold increase from 2015, when Upaya first invested.