• Editors' Summary
• Credits

1. An Urban Future
2. The Urban Poor
• Insufficient Incomes
• Inadequate Housing and Services
• Health Burdens
3. Pollution and Health
4. Impact on the Environment
5. Making Urban Areas Work

• Figures
• Tables
• Side-bars
• Bibliography

• Developing countries face fastest urban growth
• Why urban areas are growing
• The poor have greatest health risks
• Heavy ecological footprints
• Improving urban governance
• Assuring water and sanitation
• Mumbai cleans up

• POPLINE
• Media/Materials Clearinghouse
• Other issues
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Published by the Population Information Program, Center for Communication Programs, The Johns Hopkins University Bloomberg School of Public Health, 111 Market Place, Suite 310, Baltimore, Maryland 21202, USA

The Urban Poor

Most poor people in developing countries live in rural areas (140). But urban poverty is widespread, too, and it is growing.

The World Bank estimates that, worldwide, 30% of poor people live in urban areas. By 2020 the proportion is projected to reach 40%, and by 2035 half of the world’s poor people are projected to live in urban areas (96).

In 1988 the World Bank estimated conservatively that some 330 million urban poor in the developing world were living on less than US$1 a day (151).² In 2000 the estimate had increased to 495 million (153). In over half of developing countries with data on poverty, as defined by the countries themselves, at least one urban resident in every five lives below the national poverty line (157) (see Table 3).³

Sub-Saharan Africa has some of the world’s highest levels of urban poverty, reaching over 50% of the urban populations in Chad, Niger, and Sierra Leone. Countries of North Africa and the Near East have urban poverty levels near or below 20%. In Asia the highest percentages are in India, at 30%, and Mongolia, at 38%. In Latin America and the Caribbean, levels of urban poverty vary widely, from 8% of the urban population in Colombia to 57% in Honduras (157) (see Table 3).

These income-based statistics should be interpreted cautiously; the true extent of urban poverty is greater than they suggest. Poverty levels estimated on the basis of income alone do not account adequately for the larger numbers of people with such impoverishment as inadequate housing and lack of clean water and sanitation (74, 89, 132).

Moreover, urban poverty may be even more debilitating than rural poverty because in urban areas, unlike rural areas, access to virtually all goods and services depends on having a cash income. Furthermore, services that governments usually provide free in rural areas, such as schooling, usually carry costs for households in urban areas—for example, school fees and expenditures for school uniforms, books, and transportation (3, 104). Urban residents have to buy most of their food, while rural residents grow a substantial portion of their own food, and food prices often are higher in urban areas than in the countryside. Urban households spend 60% to 80% of their income on food (101) and pay up to 30% more for it than rural households (1).

Liz Gilbert, Courtesy of the David and Lucile Packard Foundation

Vendors crowd the streets of a Nigerian city. In many developing countries urban dwellers often work in the informal sector, with its low wages and long hours. Economic crises in recent years have made steady jobs harder to find.

Many developing countries experienced economic crises during the 1990s (156). Consequently, poverty has spread as wages have fallen and the prices of goods and services have risen. As wages slip, people buy less, and the falling demand for goods and services puts even more people out of work. In several Asian countries urban managers and central government officials have reported that the region’s economic crisis is particularly harming urban economies. Urban workers have lost jobs and income due to reduced demand for manufactured goods, transport, and other services. In addition, prices of food, utilities, and essential imported consumer goods have increased as currency values have fallen (3).

Most urban poverty results not from unemployment but instead from the lack of well-paying, steady jobs. The unemployment rate itself is relatively low in urban areas of most developing countries (41, 100). For example, in 155 surveyed cities in developing countries, three-quarters had unemployment rates at or below 15% (157). Nevertheless, poverty has risen as fewer people can find steady jobs with adequate wages.

As economic conditions worsen, a growing percentage of people shift from employment in the formal economy to work in the informal labor market. In 30 of 40 developing countries surveyed by the International Labor Organization (ILO) in 1999, employment in the urban informal sector constituted over one-third of total urban employment. Urban informal-sector employment ranged from 15% in Turkey to 84% in Uganda. Participation in the urban informal sector was highest in sub-Saharan African countries, with rates above 50% in two-thirds of countries surveyed (56).

Employment in the informal sector is less secure, and incomes are lower than in manufacturing and other formal-sector jobs (2, 28, 56). The informal sector is characterized by unincorporated businesses owned by households and small-scale enterprises, based on casual employment, kinship, or personal and social relationships rather than contractual arrangements (56).

Within the informal sector the urban poor work in a variety of jobs—for example, as street vendors and petty traders; as taxi drivers and in other small transport; in personal services such as shoe shining; in security services such as night watchmen or car parking attendants; in janitorial services; and also begging and commercial sex (14, 28, 37, 101). These diverse activities share the common thread of low status, low wages, long hours, and often dangerous and insecure conditions.

² The World Bank sets the income poverty line at US$1 a day per person for international comparisons (157).

³ Developing countries often set their own income poverty lines, usually defined as the income needed to buy a specified amount of food plus a few essential nonfood items (138).