Econom

1
Economía Informal Desafíos y oportunidades para
los sindicatos
2
Puntos 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 informatización
5. Addressing the issue of Informal Economy
6. Developing trade union policies and strategies on
   Informal Economy

3
1. Es La Economía Informal un problema para
nosotros?
4
ILOs Decent Work Commitment
All those who work have rights at work,
irrespective of where they work and how they work!

• 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.

5
Who Enjoys Decent Work?
Socially Excluded, VulnerableWorkers and
Families Priority Target of our Activities
100
0
6
2. Defining Informal Economy
7
Historical Overview

• First appearance of the concept - informal
  sector - 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. ()

8
Development 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. ()

9
So, What Happened?
1970s-1980s
1990s-2000s
Formal Sector Majority of Economic Sectors were
Formal
Formal Employment Became smaller and smaller
Informal employment expanded and emerged in all
kinds of economic activities
Certain particular activities were considered to
be in informal sector
10
From informal sector toinformal 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. ()

11
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
4. Units engaged in the production of goods or
services with the primary objective of generating
employment and incomes to the persons concerned
5. Units in small unregistered enterprises, both
employers and employees, as well as self-employed
persons who work in their own or family businesses
12
Formal Definition ofInformal 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 sectorat the 90th
International Labour Conference, 2002)
13
Description ofInformal 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)

• 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

14
Major Segment of Informal Economy

• Status of Employment
• Owner / Operator
• Self-employed /Own-account
• Wage worker

• Type of enterprise
• Micro-enterprise
• Own account unit / Family business
• Micro-enterprise / Sub-contracting chain / No
  fixed unit

15
7 Essential Securities Denied to Informal Workers

1. Labour market security
2. Employment security
3. Job security
4. Work security
5. Skill reproduction security
6. Income security
7. Representation security

16
Methods for Empirical Studies
Type Of Workers Labour market security Employ-ment security Job security Work security Skill repro-duction security Income security Repre-sentation security



17
Negativity Impact ofInformal 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

18
Comparison between the informal and formal economy

• Informal
• 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

• Formal
• 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)

19
3. Current Situation of Informal Economy around
the World
20
Trends of Informal Economy

• 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

21
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.
22
(No Transcript)
23
(No Transcript)
24
Size 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
25
Size of Informal Economy 2
Latin-America / Caribbean Africa 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
26
4. Identifying Causes ofInformalization of
workers
27
Causes of Informalization

• Demand-side causes (pull-effect)
• Supply-side causes (push-effect)
• Structural causes (promotional-effect)

28
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)

29
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

30
Structural 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)

31
Specific Reasons for Low Social Protection
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
  obligations
• Legislative requirements, particularly those
  concerning employment status, exclude some
  informal sector workers from participation
• Bureaucracy (insufficiency or inability)
• Geographic accessibility of social protection
  institutions

32
Economic Restructuringand Crisis

1. Structural Adjustment Programme (SAP)
2. Neo-liberal economic policies

1. Unemployment and underemployment
2. Much less employment in formal (particularly
   public) sector
3. Lower wages insufficient to support a family

33
Gender 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

34
Effect 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

35
End 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

36
5. Addressing the issue of Informal Economy
37
Three KeyDevelopment Objectives

• Better governance
• Better social dialogue (tripartism)
• Better international framework

38
Action List forImmediate Objectives

1. Enhancing rights and principles at work
2. Improving social protection
3. Strengthening representation of workers
4. Achieving sustainable economy and creating decent
   employment
5. Improving legal and institutional framework
6. Eradicating poverty
7. Achieving better demographic planning

39
i) Enhancing Rights and Principles 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/insti
  tutions
• Private voluntary initiatives (PVI)
• Code of conduct
• Framework Agreements
• Social labeling

40
ii) Improving Social 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

41
iii) Strengthening Representation and Voices of
Workers

• Right to organize and bargain collectively
• Promotion of workers and employers
  organization
• Enhancement of tripartism and social dialogue at
  national and local level
• Promotion of cooperatives

42
iv) Creating Decent Employment

• Creating quality jobs
• Enhancing employability
• Investing in knowledge and skills
• Education
• Training and skill development
• Developing enterprises
• Micro-enterprises

43
v) Improving Legal andInstitutional Framework

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)

• 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

44
vi) 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

45
vii) Achieving BetterDemographic Control

• Strong initiatives for social policy on
• Population growth
• Surplus labour
• Rural-urban migration

46
6. Developing trade union policies and strategies
onInformal Economy
47
Development and Implementation of External
Policies

1. Labour Standards and labour legislation
2. Promoting good governance and sound labour
   administration
3. Tax policy and local government regulations
4. Social protection (social safety nets)
5. Macroeconomic policy and SAP
6. Employment-intensive infrastructure projects
7. Promotion of small and medium-sized enterprises
8. Human capital development
9. Access to credit

48
Development and Implementation of 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.

49
Online Resources onInformal Economy

• ILO Informal Economy Website
• http//www.ilo.org/public/english/employment/infe
  co/publ.htmespanol

50
The biggest space in the world is the space for
improvement