Tránsito
Targets Bus Drivers and Operators For A Safe
Semana Santa
Massive Death
of Fish in Playa Lagarto Still Not Clear
Costa Rica To
Tax Firms Polluting River Waters
Blue Zones Find People
Living To 100
Rising
Informal Employment Will Increase Poverty
Beer Favourite
Of Costa Ricans To Start Drinking Habit
Hack Collapses
Acelera Internet Service
Costa Rica Goes
Dry At Stroke of Midnight
Rising
Informal Employment Will Increase Poverty
Informal employment is at record levels
worldwide with severe consequences for
poverty in poor countries, according to "Is
Informal Normal?", a new report by the OECD
Development Centre. The financial crisis is
throwing many people out of work and, in
developing countries with no unemployment
insurance, they are forced to take informal
jobs with low pay, no protection and high
risk exposure.
The study finds that 1.8 billion people, or
more than half of the global labour force,
are working without a formal labour contract
and social security. That number is
projected to grow to two thirds of the
workforce by 2020, assuming stable
population trends and growth patterns, and
could go higher if more jobs are lost to the
economic crisis and more migrants return
home to informal sector jobs.
“Even during good times with robust growth
rates, in many developing countries informal
employment increased in some regions,” says
Johannes Jutting, one of the study’s
authors. “Though India grew during the last
decade above 5 percentage points per year,
people there feel better jobs are not being
created. In fact 9 out of 10 employees in
India, approximately 370 million people, do
not have formal social security.“
Is Informal Normal? warns of the potential
draw-backs of a further increase in informal
employment: lower wages and incomes in poor
countries that do not have the means to
provide comprehensive safety nets. Women –
who constitute the majority of workers in
poor quality jobs – will be particularly
affected, as will youth and the elderly. The
majority of the 1.4 billion poor people in
the world depend exclusively on their labour
for survival. Low pay, with no social
benefits, increases the likelihood that the
Millennium Development Goal of halving
poverty world-wide by 2015 will not be met.
Immediate and un-conventional action is
urgently needed. Is Informal Normal? calls
for a comprehensive package that promotes
good quality job creation not only in the
formal sector, but also in the informal
sector. Improving infrastructure, enhancing
skills development, promoting institutional
reform and access to resources for informal
businesses are key elements in this
strategy. These measures should be
accompanied by public works, micro-credit or
conditional transfer programs. The support
of donor countries will be essential.
Some interesting figures:
• 1.8 billion people work in informal jobs
compared to 1.2 billion who benefit from
formal contracts and social security
protection.
• Informal economic activity, excluding the
agricultural sector, accounts for
three-quarters of jobs in Sub-Saharan
Africa, more than two-thirds in South and
Southeast Asia, half in Latin America, the
Middle East and North Africa, and nearly
one-quarter in transition countries. If
agriculture is included, the informal share
of the economy in each region is even higher
(e.g., more than 90% in South Asia).
• More than 700 million informal workers
survive on less than $1.25 a day and some
1.2 billion on less than $2 a day.
• The share of informal employment tends to
increase during economic turmoil. For
example, during the Argentine economic
crisis (1999-2002), the country’s economy
shrank by almost one-fifth, while the share
of informal employment expanded from 48% to
52%.
Source: OECD Development Centre “Is Informal
Normal? (2009) |
|
|
|
|
