MADRID, March 15 (IPS) – More than 60 percent of the world’s adult workforce – or about 2 billion workers – work in the informal economy. “They are not recognized, registered, regulated or protected under labor and social protection laws. The consequences can be devastating, for individuals, families as well as the economy.”
EgoInternational Labor Organization (ILO) on February 18, 2022, reported that despite great efforts over the years, there is little sign that the informal economy is shrinking.
“In fact, the COVID-19 pandemic has pushed many workers into informal work to survive, and highlights the important role that access to social protection roles can play to support workers. move, especially when they cannot work.”
What will the lives of workers in the informal economy look like, what are the global solutions to intensive informality, and will the growth of the ‘gig’ economy Does it help workers in the informal economy get the security and social protection they desperately need?
The informal economy comprises more than half of the global workforce and more than 90% of micro and small businesses worldwide, the ILO said in another paper. report.
“Informality is an important feature of labor markets around the world, with millions of economic units operating and hundreds of millions of workers pursuing their livelihoods in informal conditions.” .
The world body explains that the phrase “informal economy” covers a wide range of situations and phenomena.
- 60% of the world’s adult workforce – approx. 2 billion workers – working in the informal economy.
- The informal economy accounts for about 90% of micro and small enterprises (MSEs) worldwide.
- 4.1 billion people worldwide (53%) have absolutely no income security from their national social protection systems.
- 1.6 billion across Asia and the Pacific lack access to social health protections.
What is the informal economy?
The informal economy, it says, is a global and pervasive phenomenon. About 60% of the world’s population is engaged in the informal sector. Although it is mainly common in emerging and developing economies, it is also an important part of advanced economies.
In what activities. And where?
The informal economy includes activities that have market value but are not officially registered, the IMF adds.
“It includes professions as diverse as minibus drivers in Africa, stand-up markets in Latin America and traffic light peddlers around the world.”
In advanced economies, examples can range from contract and construction workers, through to domestic workers, to registered firms engaged in informal activities.
The International Labor Organization estimates that around 2 billion workers, or more than 60% of the world’s adult workforce, work in the informal sector – at least part-time.
“While the informal economy is a global phenomenon, there are wide variations within and between countries. On average, it accounts for 35% of GDP in low- and middle-income countries compared to 15% in advanced economies”.
Latin America and sub-Saharan Africa have the highest levels of informality, while Europe and East Asia are the regions with the lowest levels of informality.
Hard to measure
The informal economy is difficult to measure, the International Monetary Fund adds.
This is because the workings within it cannot be directly observed, and for the most part, those involved in the informal economy do not want to be taken into account.
Anyway, informality can be measured in two different ways.
Survey-based, voluntary responses and other compliance methods directly measure the number of workers and informal enterprises.
Indirect methods focus on certain characteristics, or proxies, that are observable and relevant to informal economic activity.
“Examples of proxies include electricity consumption, night light satellite data, and cash in circulation. By using these methods, the share of the informal economy in total output can be measured”.
The COVID-19 pandemic hits informal workers especially hard
According to the IMF, this uneven impact of the pandemic is due to the fact that most informal workers are employed in high-contact sectors (such as domestic workers, street vendors, taxi drivers).…) and unsafe jobs that do not offer paid leave or the ability to work from home.
“Nearly 95 million more people — many of them informal workers — are estimated to have fallen below the extreme poverty line by 2020 compared with pre-pandemic projections.”
Women, hit the hardest
Gender inequality is also growing as millions of women in the informal sector have been forced out of work since the pandemic began.
For example, the IMF says, women make up 80 percent of domestic workers globally, and 72 percent of them have lost their jobs as a result of the pandemic.
In sub-Saharan Africa, 41% of women-owned businesses closed, compared with 34% of men-owned businesses.
– 95% in South Asia,
– 89% in sub-Saharan Africa,
– 59% in Latin America and the Caribbean
From street vendors and domestic workers to subsistence farmers and seasonal agricultural workers, women make up a disproportionate share of workers in the region, says UN Women. informal.
“Working in the informal economy, or gray economy, as it is sometimes called, leaves women often unprotected by labor laws, social benefits such as pensions, health insurance, etc. or paid sick leave.”
“They often work for lower wages and in unsafe conditions, including the risk of sexual harassment. The lack of protection by society has a lasting effect on women”.
For example, fewer and fewer women are receiving pensions globally, and as a result, more and more elderly women are living in poverty. Even in developed economies, such as in France, Germany, Greece and Italy, the average pension of women is 30% lower than that of men.
In what sectors do women work informally?
According to UN Women, they are mainly engaged in the service sector, with 61%, followed by agriculture (25%) and industry (13.5).
“Women are concentrated in lower-paying, lower-skill jobs with higher levels of job insecurity and under-represented in decision-making roles and in areas such as science and technology. technology”.
UN Women also announced that:
Today, half of the global working population works in the service sector, a sector dominated by women.
– The proportion of women in service is 77% and 91.4% in East Asia and North America, respectively.
– Where women work varies widely by region and income level: In high-income countries, women are concentrated in the health, education, wholesale and retail trade sectors, while In low- and middle-income countries, women are concentrated in agricultural labor.
– Sectoral and occupational segregation as a result of structural barriers and gender-based discrimination, such as poverty, inflexible working hours, limited or no access to opportunities with appropriate quality child care, parental leave policies and poor social attitudes, among other factors.
© Inter Press Service (2022) – All rights reservedOrigin: Inter Press Service