Thursday, August 06, 2009

Pie in the sky

Recycling is generally Mungowitz's department, but I found this NY Times editorial bizzare enough to take a shot.

Before I start in, let me say that I am not in favor of poverty. I have seen a bit of how garbage pickers live in developing countries and would very much like them to have a better life.

However, their advocate in the Times, Bharati Chaturvedi, seems a bit clueless.

He begins by pointing out that in a lot of places, trash pickers provide the only recycling services and that they "recycle waste much more cheaply and efficiently than governments or corporations can".

He then says they have been hurt badly by falling scrap prices in the global recession and proposes the following:

"A more efficient temporary solution would be for governments to buoy the buying price of scrap. To do this, they’d have to pay a small subsidy to waste dealers so they could purchase scrap from trash pickers at about 20 percent above the current price. This increase, if well advertised and broadly utilized, would bring recyclers back from the brink.

In the long run, though, these invisible workers will remain especially vulnerable to economic slowdowns unless they are integrated into the formal business sector, where they can have insurance and reliable wages.

This is not hard to accomplish. Informal junk shops should have to apply for licenses, and governments should create or expand doorstep waste collection programs to employ trash pickers. Instead of sorting through haphazard trash heaps and landfills, the pickers would have access to the cleaner scrap that comes straight from households and often brings a higher price. Employing the trash pickers at this step would ensure that recyclables wouldn’t have to be lugged to landfills in the first place.

Experienced trash pickers, once incorporated into the formal economy, would recycle as efficiently as they always have, but they’d gain access to information on global scrap prices and would be better able to bargain for fair compensation. Governments should charge households a service fee, which would also supplement the trash pickers’ income, and provide them with an extra measure of insurance against future crises."

In other words, poor country governments should create formal recycling programs and hire the current trash pickers, using a combination of subsidies and service fees to make sure they make a decent living.

Sounds great, no?

Well, maybe but, it's probably useful to recognize that this is something that just flat out isn't going to happen. Trash pickers don't have much political clout.

Secondly, India has hundreds of millions of desperately poor people, all of which do something to survive and all of which have been hurt by the global recession. By the same logic, governments should subsidize their activities in the short run and create a government program to employ them in the long run at a decent standard of living. People, I am pretty sure that this is impossible.

Wouldn't the best long run solution here from a public policy perspective (i.e. assuming that the government indeed should do something) be to expand educational opportunities for these, and indeed all, poor families with programs along the lines of Mexico's "Oportunidades" program, where poor mother's are paid for their children's school attendance?

If one was convince of the need for government action, wouldn't that make more sense than subsidizing and bureaucratizing a fairly unpleasant occupation, in an way locking these people into it?