Informal sector eating up global workforce – UN study

Zurich, Switzerland | THE INDEPENDENT | More than 61 percent of the global workforce earns their livelihoods in the informal sector, with no social protection, rights at work and decent working conditions. Majority of these (85.8 percent) are in emerging and developing economies in Africa.

The findings are revealed in a new report by the International Labour Organisation – ILO titled Women and men in the informal economy: A statistical picture. The study also provides comparable estimates on the size of the informal economy and a statistical profile of the sector, using criteria from more than 100 countries.

The report released on the occasion to mark the International Labour Day indicates that education is a major factor affecting the level of informality. Florence Bonnet, one of the authors of the report says that as the level of education increases, the level of informality decreases.

“People who have completed secondary and tertiary education are less likely to be in informal employment compared to workers who have either no education or completed primary education,” the report says. In addition, people living in rural areas are almost twice as likely to be in informal employment as those in urban areas, she added.

Two of the report’s authors, Florence Bonnet and Vicky Leung, point out that while not all informal workers are poor; poverty is both a cause and a consequence of informality. “The report shows that the poor face higher rates of informal employment and that poverty rates are higher among workers in informal employment,” said Leung.

Bonnet, for her part, stressed that there is an urgent need to tackle informality. For hundreds of millions of workers, informality means a lack of social protection, rights at work and decent working conditions, and for enterprises, it means low productivity and lack of access to finance,” she said.

Meanwhile, the report also found that informal employment is a greater source of jobs for men (63 percent) than for women (58.1 percent).

“Out of the two billion workers in informal employment worldwide, just over 740 million are women,” said ILO, noting that they are mostly in informal employment in most low- and lower-middle income countries and are more often found to be the most vulnerable.

Rafael Diez de Medina, the Director of ILO’s Department of Statistics says that the report is timely, given the momentum created by the Transition from the Informal to the Formal Economy Recommendation, 2015, and the Sustainable Development Goals that includes a specific statistical indicator on informal employment.

The ILO Recommendation stresses the need to facilitate the transition of workers and economic units to the formal economy, to promote the creation, preservation and sustainability of enterprises and decent jobs in the formal economy and to prevent the informalization of formal economy jobs.

“The high incidence of informality in all its forms has multiple adverse consequences for workers, enterprises and societies and is, in particular, a major challenge for the realization of decent work for all and sustainable and inclusive development,” Rafael said.

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