Economía Informal: Desafíos y Economía Informal: Desafíos y oportunidades para los sindicatosoportunidades para los sindicatos
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Puntos para la discusiónPuntos para la discusión
1. ¿Es La “Economía Informal” un problema para nosotros?
2. Definir “Economía Informal”
3. Analizar situaciones actuales en el mundo
4. Identificar causas del informatización5. Addressing the issue of “Informal Economy”
6. Developing trade union policies and strategies on “Informal Economy”
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1. 1. ¿Es La “Economía Informal” un problema para nosotros?
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ILO’s Decent Work CommitmentILO’s Decent Work Commitment
The commitment and goal of the ILO is to promote “Decent Work” along the entire continuum from the informal to the formal end of the economy in development-oriented, poverty reduction-focused and gender-equitable ways.
All those who work have rights at work, All those who work have rights at work, irrespective of where they work and how irrespective of where they work and how they work!they work!
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Who Enjoys Decent Work?Who Enjoys Decent Work?
100%0%
Socially Excluded, VulnerableSocially Excluded, VulnerableWorkers and FamiliesWorkers and Families
= Priority Target of our Activities= Priority Target of our Activities
This Group enjoys a good level of Decent Work
This Group has some limitations in Decent Work
This Group has major limitations on Decent Work
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2. Defining Informal Economy2. Defining Informal Economy
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Historical OverviewHistorical OverviewFirst appearance of the concept - “informal informal
sectorsector” - in 1972 when ILO issued a report on Kenya.
During the 70s and 80s, the common interpretation was: “informal sector” would be a transitory phenomenon, and economic progress would help the informal workers move into the formal sector.
“Dilemma” in early 90s – whether the international community should promote the informal sector as a provider of employment and incomes or seek to extend regulation and social protection to it. (+)
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Development in 1990sDevelopment in 1990s Further informalization and flexibilization of
work and workers as the process of globalization and information technology accelerated;
The early perception proved to be wrong: the size of the informal sector has expanded although the volume of world trades and investments expanded significantly;
It became clear that informal sector is not a temporary or residual phenomenon, and that large scale, determined actions must be taken to address the issue. (+)
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So, What Happened?So, What Happened?
1970s-1980s 1990s-2000s
Formal SectorMajority of EconomicSectors were Formal
Certain particular activities were considered to be in informal sector
Formal EmploymentBecame smaller
and smaller
Informal employment expanded and emerged in all kinds of economic
activities
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From “informal sector” toFrom “informal sector” to“informal economy”“informal economy”
The term, “Informal sector”, has been found to be an inadequate as well as misleading term;
Use of “informal economy” to reflect these dynamic, heterogeneous and complex aspects of a phenomenon which is not a “sector”. (+)
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Defining “Informal Economy”Defining “Informal Economy”1. All currently unregistered economic activities which
contribute to the officially calculated (or observed) Gross National Product
2. Those activities which are not recorded in the national income accounts
3. Income-generation activities which take place outside of the formal regulatory framework
5. Units in small unregistered enterprises, both employers and employees, as well as self-employed persons who work in their own or family businesses
4. Units engaged in the production of goods or services with the primary objective of generating employment and incomes to the persons concerned
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Formal Definition ofFormal Definition of“Informal Economy”“Informal Economy”
All economic activities by workers and economic units that are – in law or in practice – not covered or insufficiently covered by formal arrangements.
(Conclusions concerning decent work and the informal sector:at the 90th International Labour Conference, 2002)
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Description ofDescription ofInformal WorkersInformal Workers
Little capital and few fixed assets Excluded from the protections provided by collective
bargaining and labour laws Self-employed, employed casually without a contract,
members of family business, or homeworkers employed on a piece-work basis
Mostly women or young workers
Unrecognized, unprotected workers in an unregulated or unregistered economy who are trying to sell their labour or products for survival (to an unidentifiable employer)
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Major Segment of Major Segment of “Informal Economy”“Informal Economy”
Status of EmploymentOwner / Operator
Self-employed /Own-account
Wage worker
Type of enterpriseMicro-enterprise
Own account unit / Family business
Micro-enterprise / Sub-contracting chain / No fixed unit
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① Labour market security
② Employment security
③ Job security
④ Work security
⑤ Skill reproduction security
⑥ Income security
⑦ Representation security
7 Essential Securities Denied to 7 Essential Securities Denied to Informal WorkersInformal Workers
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Type
Of
Workers
Labour market security
Employ-ment security
Job security
Work security
Skill repro-duction security
Income security
Repre-sentation security
Methods for Empirical StudiesMethods for Empirical Studies
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Negativity Impact ofNegativity Impact ofInformal EconomyInformal Economy
Unfair competition for formal enterprises No tax income for the states No social security contributions for the
states No decent wages for workers (less savings
and spending) More occupational injuries/diseases Damage to the environment
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Comparison between the Comparison between the informal and formal economyinformal and formal economy
InformalInformal Ease of entry Reliance on indigenous
resources Family ownership Small scale of operation Labour-intensive Adapted technology Skills acquired outside
formal school system Unregulated, competitive
markets
FormalFormal Difficult entry Reliance on overseas
resources Corporate ownership Large scale Capital intensive Imported technology Formally acquired skills,
often expatriate Protected markets (tariffs,
quotas, trade licenses)
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3. Current Situation of “Informal 3. Current Situation of “Informal Economy” around the WorldEconomy” around the World
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Globalization and flexibility of labour markets
80% of world population - insufficient coverage of social protection
50% of world population – no social protection
Majority of those in developing countries Majority of those in informal economy Particularly women and young people
Trends of Informal EconomyTrends of Informal Economy
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Informal Economy in South Asia and Pacifique
Source: “Size and Measurement of the Informal Economy in 110 Countries around the world”, F.Schneider , July 2002.
Informal Economy in % GNP 1999/2000
52.6
44.6 43.438.4 36.8 35.6
31.1
23.119.4 18.4
15.613.1
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0
10
20
30
40
50
60
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Size of Informal Economy 1Size of Informal Economy 1
Low-Income Countries
Middle-Income
Countries
High-Income Countries
Share of Formal Wage Employment in Total Employment
17% 58% 84%
Source: World Development Report 1995. Washington D.C. World Bank
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Size of Informal Economy 2Size of Informal Economy 2Latin-America
/ CaribbeanAfrica Asia
Non-Agricultural Employment
57% 78% 45-85%
Urban Employment
40% 61% 40-60%
New Jobs 83% 93% N/A
Source: Charmes, Jacques. 2000. Informal Sector, Poverty, and Gender: A review of Empirical Evidence. Paper comissioned for World Development Report 2000/2001
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4. Identifying Causes of4. Identifying Causes ofInformalization of workersInformalization of workers
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Causes of InformalizationCauses of Informalization
Demand-side causes (pull-effect)
Supply-side causes (push-effect)
Structural causes (promotional-effect)
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Demand-side Causes (pull-effects)Demand-side Causes (pull-effects) Pressure on reducing production costs due to over-
competition and profit-oriented business minds (needs for cheap labour)
Needs of urban poor for cheap goods and services High tax and social protection burdens Bribery and cumbersome procedures for
formalization Less incentives for OSHE investment Avoidance of trade unions Illegal activities (needs to be hidden)
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Supply-side Causes (push-effects)Supply-side Causes (push-effects) Unemployment and poverty Difficulty (or impossibility) to find employment
with formal employer Shrink of employment and wages in public
service sectors Fall of the prices of agricultural products Population growth / migration Lack of education, skill and/or training chances Miss-match between demand and supply HIV/AIDS
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Structural CausesStructural Causes Lack of political will (no national policies) Lack of sustainable economic development or
systems for fair redistribution of wealth Lack of legislation or defects in labour and social
laws (no standards) Lack of legal systems, effective enforcement of
law, or effective labour inspections (no justice) Lack of comprehensive social protection schemes Lack of primary/secondary education and
vocational training/re-training (no opportunities)
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Specific Reasons for Low Social Specific Reasons for Low Social Protection CoverageProtection Coverage
Conventional social security systems rely on the employer/employee relationship as a basis for coverage
Low and irregular income of informal economy workers reduce their capacity to make contribution
Ignorance of social security rights and obligationsLegislative requirements, particularly those
concerning employment status, exclude some informal sector workers from participation
Bureaucracy (insufficiency or inability)Geographic accessibility of social protection
institutions
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Economic RestructuringEconomic Restructuringand Crisisand Crisis
1. Structural Adjustment Programme (SAP)
2. Neo-liberal economic policies
i. Unemployment and underemployment
ii. Much less employment in formal (particularly public) sector
iii. Lower wages insufficient to support a family
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Gender IssuesGender Issues
More and more women enter into labour force but into informal economy, because:
Little education and skill Less access to resources / training
opportunities Direct and indirect discrimination Family responsibilities
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Effect of GlobalizationEffect of Globalization Expansion of trade and investment FDI and international capital flow Diffusion of technology Competition for investment Emergence of multinational companies Global production chains Labour migration
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End of Cold WarEnd of Cold War
End of the old East-West line power politics
Beginning of new paradigm with hot war over economic initiatives
Domestic wars, ethnic wars (cleansing) Terrorism organizations Mafia organizations Increasing number of refugees
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5. Addressing the issue of 5. Addressing the issue of “Informal Economy”“Informal Economy”
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Three KeyThree KeyDevelopment ObjectivesDevelopment Objectives
Better governance
Better social dialogue (tripartism)
Better international framework
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Action List forAction List forImmediate ObjectivesImmediate Objectives
i. Enhancing rights and principles at work
ii. Improving social protection
iii. Strengthening representation of workers
iv. Achieving sustainable economy and creating decent employment
v. Improving legal and institutional framework
vi. Eradicating poverty
vii. Achieving better demographic planning
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i) Enhancing Rights and i) Enhancing Rights and Principles at WorkPrinciples at Work
International Labour Standards and ILO Declaration on F.P.R.W.
ILO MNE Declaration / OECD guidelines /UN Global Compact
National and local legislation/regulations/institutions
Private voluntary initiatives (PVI)– Code of conduct– Framework Agreements– Social labeling
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ii) Improving ii) Improving SocialSocial Protection Protection
Extending and adapting statutory social insurance
Encouraging micro-insurance and area-based schemes
Promoting cost-effective tax-based social benefits
Establishing and promoting cooperatives Improving occupational health and safety HIV/AIDS
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iii) Strengthening Representation iii) Strengthening Representation and Voices of Workersand Voices of Workers
Right to organize and bargain collectively
Promotion of workers’ and employer’s organization
Enhancement of tripartism and social dialogue at national and local level
Promotion of cooperatives
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iv) Creating Decent Employmentiv) Creating Decent Employment
Creating quality jobs Enhancing employability Investing in knowledge and skills
– Education– Training and skill development
Developing enterprises– Micro-enterprises
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v) Improving Legal andv) Improving Legal andInstitutional FrameworkInstitutional Framework
Commercial and business regulations governing the establishment and operation of enterprises;
The laws pertaining to property rights, which could affect the ability to transform assets into productive capital
Labour legislation governing employment relationships and the rights and protection of workers
1. Full coverage and application of labour legislation and administration (protection/minimum standards/ benefits) in the informal economy;
2. Simplified, transparent, incorruptible, consistent and affordable legal systems (for greater compliance)
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vi) Eradicating Povertyvi) Eradicating Poverty
1. Comprehensive national policies, strategies and programmes for poverty reduction
2. Alliance with international community on poverty eradication initiatives (e.g. PRSP)
3. Efforts for abolishment of child labour
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vii) Achieving Bettervii) Achieving BetterDemographic ControlDemographic Control
Strong initiatives for social policy on: Population growth Surplus labour Rural-urban migration
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6. Developing trade union policies 6. Developing trade union policies and strategies onand strategies on
“Informal Economy”“Informal Economy”
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Development and Implementation Development and Implementation of External Policiesof External Policies
1. Labour Standards and labour legislation2. Promoting good governance and sound labour
administration3. Tax policy and local government regulations4. Social protection (social safety nets)5. Macroeconomic policy and SAP6. Employment-intensive infrastructure projects7. Promotion of small and medium-sized enterprises8. Human capital development9. Access to credit
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Development and Implementation Development and Implementation of Internal Policiesof Internal Policies
Establishing priorities and strategies for organizing; Setting up structures and developing special services; Formalization of access and membership; Building broader alliances and community-based
unions; Participation in ILO/ILS mechanism; International trade union networking, code of
conducts and framework agreements; The gender dimension; Mobilizing young people; and Awareness-raising and the media.
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Online Resources onOnline Resources onInformal EconomyInformal Economy
ILO Informal Economy Website
http://www.ilo.org/public/english/employment/infeco/publ.htm#espanol
“The biggest space in the world is
the space for improvement”
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