Editing Informal economy (section)

==Social and political implications and issues==
[[File:Share of employed in informal employment.png|thumb|330x330px|Share of employed in informal employment by gender]]
According to development and transition theories, workers in the informal sector typically earn less income, have unstable income, and do not have access to basic protections and services.<ref name="UNRISD 2010. pp. 5-33">UNRISD. 2010. "Gender Inequalities at Home and in the Market." Assignment: Chapter 4, pp. 5–33.</ref><ref name="Beneria 2006. pp. 193-216">Beneria, Lourdes and Maria S. Floro. 2006. "Labor Market Informalization, Gender and Social Protection: Reflections on Poor Urban Households in Bolivia, Ecuador and Thailand," in Shahra Razavi and [[Shireen Hassim]], eds. Gender and Social Policy in a Global Context: Uncovering the Gendered Structure of "the Social," pp. 193–216. New York: Palgrave Macmillan.</ref> The informal economy is also much larger than most people realize, with women playing a huge role. The working poor, particularly women, are concentrated in the informal economy, and most low-income households rely on the sector to provide for them.<ref name=ilo /> However, informal businesses can also lack the potential for growth, trapping employees in menial jobs indefinitely. On the other hand, the informal sector can allow a large proportion of the population to escape extreme [[poverty]] and earn an income that is satisfactory for survival.<ref name="Garcia-Bolivar, Omar E 2006">Garcia-Bolivar, Omar E. 2006. "Informal economy: is it a problem, a solution, or both? The perspective of the informal business.' Northwestern University School of : Law and Economics Papers. The Berkeley Electronic Press.</ref> Also, in developed countries, some people who are formally employed may choose to perform part of their work outside of the formal economy, exactly because it delivers them more advantages. This is called 'moonlighting'. They derive social protection, pension and child benefits and the like, from their formal employment, and at the same time have tax and other advantages from working on the side.

From the viewpoint of governments, the informal sector can create a vicious cycle. Being unable to collect taxes from the informal sector, the government may be hindered in financing [[public services]], which in turn makes the sector more attractive. Conversely, some governments view informality as a benefit, enabling excess labor to be absorbed, and mitigating [[unemployment]] issues.<ref name="Garcia-Bolivar, Omar E 2006"/> Recognizing that the informal economy can produce significant goods and services, create necessary jobs, and contribute to imports and exports is critical for governments.<ref name=ilo />

As the work in informal sector is not monitored or registered with the state, its workers are not entitled to social security, and they face unique challenges when affiliated in or creating [[trade union]]s.<ref>{{cite journal |last1=Schminke |first1=Tobias Gerhard |title=Trade Union Transformation and Informal Sector Organising in Uganda: The Prospects and Challenges for Promoting Labour-led Development |journal=Global Labour Journal |date=2021 |volume=12 |issue=2 |doi=10.15173/glj.v12i2.4394 |url=https://mulpress.mcmaster.ca/globallabour/article/view/4394 |access-date=24 July 2024|doi-access=free }}</ref> Informal economy workers are more likely to work long hours than workers in the formal economy who are protected by employment laws and regulations. A landmark study conducted by the [[World Health Organization]] and the [[International Labour Organization]] found that exposure to long working hours caused an estimated 745,000 fatalities from ischemic heart disease and stroke events in 2016.<ref>{{cite journal |last1=Pega |first1=Frank |last2=Nafradi |first2=Balint|last3=Momen |first3=Natalie |last4=Ujita |first4=Yuka |last5=Streicher |first5=Kai |last6=Prüss-Üstün |first6=Annette |last7=Technical Advisory Group |title=Global, regional, and national burdens of ischemic heart disease and stroke attributable to exposure to long working hours for 194 countries, 2000–2016: A systematic analysis from the WHO/ILO Joint Estimates of the Work-related Burden of Disease and Injury |journal=Environment International |date=2021 |volume=154 |page=106595 |doi=10.1016/j.envint.2021.106595 |pmid=34011457 |pmc=8204267 |doi-access=free |bibcode=2021EnInt.15406595P }}</ref> A systematic review and meta-analysis of health services use and health outcomes among informal economy workers, when compared with formal economy workers, found that these workers are less likely to use health services and more likely to have depression, highlighting their substantial health disadvantage.<ref>{{cite journal |last1=Naicker |first1=Nisha |last2=Pega |first2=Frank |last3=Rees |first3=David |last4=Kgalamono |first4=Spo |last5=Singh |first5=Tanusha |title=Health Services Use and Health Outcomes among Informal Economy Workers Compared with Formal Economy Workers: A Systematic Review and Meta-Analysis |journal= Int J Environ Res Public Health |date=2021 |volume=18 |issue=6 |page=3189 |doi=10.3390/ijerph18063189 |pmid=33808750 |pmc=8003536 |doi-access=free }}</ref>

===Gender===
[[File:ESAF Bamboo product making unit in Dumka, Jharkhand.jpg|thumb|left|A group of Indian women making bamboo products they intend to sell in Dumka, Jharkhand]]
[[File:A girl selling plastic containers for carrying Ganges water, Haridwar.jpg|thumb|150px|A girl selling plastic containers for carrying Ganges water, [[Haridwar]], India]]

In developing countries,  most of the female non-[[agricultural]] labor force is in the informal sector.<ref>{{cite web |url=http://www.cpahq.org/cpahq/cpadocs/module6mc.pdf |title=Women in the Informal Sector : A Global Picture, the Global Movement |author=Martha Alter Chen |website=Cpahq.org |access-date=2016-10-20 |archive-date=2019-09-24 |archive-url=https://web.archive.org/web/20190924010418/http://www.cpahq.org/cpahq/cpadocs/module6mc.pdf |url-status=dead }}</ref> Female representation in the informal sector is attributed to a variety of factors. One such factor is that [[employment]] in the informal sector is the source of employment that is most readily available to women.<ref name=":0" /> A 2011 study of poverty in Bangladesh noted that cultural norms, religious seclusion, and illiteracy among women in many developing countries, along with a greater commitment to family responsibilities, prevent women from entering the formal sector.<ref>{{Cite journal|last1=Jahiruddin|first1=ATM|last2=Short|first2=Patricia|last3=Dressler|first3=Wolfram|last4=Khan|first4=Adil|date=2011|title=Can Microcredit Worsen Poverty? Cases of Exacerbated Poverty in Bangladesh|journal=Development in Practice|volume=21|issue=8|pages=1109–1121|doi=10.1080/09614524.2011.607155|s2cid=154952803}}</ref>

Major occupations in the informal sector include home-based workers (such as dependent subcontract workers, independent own account producers, and unpaid workers in family businesses) and [[street vendors]], which both are classified in the informal sector.<ref name=":0">Chen, M (2001) "Women in the informal sector: a global picture, the global movementt."
SAIS Review 21(1).</ref> Women tend to make up the greatest portion of the informal sector, often ending up in the most erratic and corrupt segments of the sector.<ref name="UNRISD 2010. pp. 5-33" /> In India, women working in the informal sector often work as [[ragpicker]]s, [[domestic workers]], coolies, vendors, beauticians, construction laborers, and garment workers.

According to a 2002 study commissioned by the ILO, the connection between employment in the informal economy and being poor is stronger for women than men.<ref name=":5" /> While men tend to be over-represented in the top segment of the informal sector, women overpopulate the bottom segment.<ref name=":5" /><ref name="UNRISD 2010. pp. 5-33" /> Men are more likely to have larger-scale operations and deal in non-perishable items while few women are employers who hire others.<ref name=":5" /> Instead, women are more likely to be involved in smaller-scale operations and trade food items.<ref name=":5" /> Women are under-represented in higher-income employment positions in the informal economy and over-represented in lower-income statuses.<ref name=":5" /> As a result, the gender gap in terms of wage is higher in the informal sector than the formal sector.<ref name=":5" /> [[Labor markets]], household decisions, and states all propagate this [[gender inequality]].<ref name="UNRISD 2010. pp. 5-33" />

===Political power of agents===
Workers in the informal economy lack a significant voice in government policy.<ref name=Gerxhani /> Not only is the political power of informal workers limited, but the existence of the informal economy creates challenges for other politically influential actors. For example, the trade unions struggle to organize the informal economy and often formal workers organized in unions have no immediate interest in improving the status of informal workers due to fears of status loss. Yet the informal economy negatively affects membership and investment in the trade unions. Laborers who might be formally employed and join a union for protection may choose to branch out on their own instead. While this hostile attitude is not always the case, the nature of informal employment - low and irregular income that is not enough to pay union dues, fast-changing decentralized work locations and a self-perception of informal workers as self-employed pose barriers to informal economy trade union organizing.<ref>{{cite book |last1=Schminke |first1=Tobias Gerhard |title=Labour-centred development and decent work : a structuralist perspective on informal employment and trade union organizing in Uganda |date=2019 |publisher=Saint Mary's University |location=Halifax, Nova Scotia |url=https://library2.smu.ca/handle/01/29224 |access-date=28 August 2023}}</ref> As a result, trade unions are inclined to oppose the informal sector, highlighting the costs and disadvantages of the system. Producers in the formal sector can similarly feel threatened by the informal economy. The flexibility of production, low labor and production costs, and bureaucratic freedom of the informal economy can be seen as consequential competition for formal producers, leading them to challenge and object to that sector. Last, the nature of the informal economy is largely anti-regulation and free of standard taxes, which diminishes the material and political power of government agents.  Whatever the significance of these concerns are, the informal sector can shift political power and energies.<ref name="Gerxhani" />

===Poverty===
[[File:A Busy road in Main Market.JPG|thumb|Informal vendors in Uttar Pradesh]]
The relationship between the informal sectors and poverty certainly is not simple nor does a clear, causal relationship exist. An inverse relationship between an increased informal sector and slower [[economic growth]] has been observed though.<ref name="UNRISD 2010. pp. 5-33"/>
Average incomes are substantially lower in the informal economy and there is a higher preponderance of impoverished employees working in the informal sector.<ref>Carr, Marilyn and Martha A. Chen. 2001. "Globalization and the Informal Economy:
How Global Trade and Investment Impact on the Working Poor".  Background paper commissioned by the ILO Task Force on the Informal Economy. Geneva, Switzerland: International Labour Office.</ref> In addition, workers in the informal economy are less likely to benefit from employment benefits and social protection programs.<ref name=ilo /> For instance, a survey in Europe shows that the respondents who have difficulties to pay their household bills have worked informally more often in the past year than those that do not (10% versus 3% of the respondents).<ref>European Commission. (2013). Undeclared work in the European Union. Retrieved from Brussels: European Commission</ref>

===Children and child labour===
{{Original research section|date=April 2018}}
[[File:Flickr - archer10 (Dennis) - Egypt-12B-051.jpg|thumb|200px|A girl weaving a rug in Egypt]]
Children work in the informal economy in many parts of the world. They often work as scavengers (collecting recyclables from the streets and dump sites), day laborers, cleaners, construction workers, vendors, in seasonal activities, domestic workers, and in small workshops; and often work under hazardous and exploitative conditions.
<ref>{{cite web|url=http://www.worldvision.org/resources.nsf/main/cambodia_childwork.pdf/$file/cambodia_childwork.pdf?Open|title=News-Stories – World Vision|website=Worldvision.org|access-date=2016-10-20|archive-date=2016-02-03|archive-url=https://web.archive.org/web/20160203213027/http://www.worldvision.org/resources.nsf/main/cambodia_childwork.pdf/$file/cambodia_childwork.pdf?Open|url-status=dead}}</ref><ref>{{cite web|url=http://www.ilo.org/public/english/standards/relm/ilc/ilc90/pdf/rep-vi.pdf |title=Decent work and the informal economy |website=Ilo.org |access-date=2016-10-20}}</ref> It is common for children to work as domestic servants in parts of [[Latin America]] and parts of [[Asia]]. Such children are very vulnerable to exploitation: often they are not allowed to take breaks or are required to work long hours; many suffer from a lack of access to education, which can contribute to social isolation and a lack of future opportunity. [[UNICEF]] considers domestic work to be among the lowest status, and reports that most child domestic workers are live-in workers and are under the round-the-clock control of their employers.<ref>{{cite web|url=http://paa2009.princeton.edu/download.aspx?submissionId=90836|title=Counting Cinderellas Child Domestic Servants&nbsp;– Numbers and Trends|access-date=2011-05-02|archive-url=https://web.archive.org/web/20110823231826/http://paa2009.princeton.edu/download.aspx?submissionId=90836|archive-date=2011-08-23|url-status=dead}}</ref> Some estimates suggest that among girls, domestic work is the most common form of employment.<ref>{{cite web|url=http://www.antislavery.org/includes/documents/cm_docs/2009/a/advocacyhandbookeng.pdf|title=Child domestic workers: Finding a voice|publisher=Antislavery.com|access-date=October 4, 2013|archive-date=April 3, 2013|archive-url=https://web.archive.org/web/20130403163951/http://www.antislavery.org/includes/documents/cm_docs/2009/a/advocacyhandbookeng.pdf|url-status=dead}}</ref>

During times of economic crisis many families experience unemployment and job loss, thus compelling adolescents to supplement their parents’ income by selling goods or services to contribute to the family economy. At the core, youth must compromise their social activities with other youth, and instead prioritize their participation in the informal economy, thus manufacturing a labor class of adolescents who must take on an adult role within the family. Although it revolves around a negative stigma of deviance, for a majority of individuals, mostly people of color, the informal economy is not an ideal choice but a necessity for survival. Participating in the informal economy is becoming normalized due to the lack of resources available in low-income and marginalized communities, and no matter how hard they have to work, will not advance in the economic hierarchy. When a parent is either unemployed or their job is on low demand, they are compelled to find other methods to provide for themselves but most importantly their children. Yet, due to all the limitations and the lack of jobs, children eventually cooperate with their parent/s and also work for their family's economic well-being. By having to assist in providing for the family, children miss out on their childhood because instead of engaging in activities other youth their age participate in, they are obligated to take on an adult role, put the family first and contribute to the family's well-being.

The participation of adolescents in the informal economy, is a contentious issue due to the restrictions and laws in place for youth have to work. One of the main dilemmas that arise when children engage in this type of work, is that privileged adults, denounce children participation as forced labor. Due to the participant being young, the adults are viewed as “bad” parents because first they cannot provide for their children, second they are stripping the child from a “normal” childhood, and third, child labor is frowned upon. Furthermore, certain people believe that children should not be working because children do not know the risks and the pressure of working and having so much responsibility, but the reality is that for most families, the children are not being forced to work, rather they choose to help sustain their family's income. The youth become forced by their circumstances, meaning that because of their conditions, they do not have much of a choice. Youth have the capability to acknowledge their family's financial limitations and many feel that it is their moral obligation to contribute to the family income. Thus, they end up working without asking for an allowance or wage, because kids recognize that their parents cannot bring home enough income alone, thus their contribution is necessary and their involvement becomes instrumental for their family's economic survival.<ref>{{Cite journal|last1=Estrada|first1=Emir|last2=Hondagneu-Sotelo|first2=Pierrette|date=2011|title=Intersectional Dignities: Latino Immigrant Street Vendor Youth in Los Angeles|journal=Journal of Contemporary Ethnography|volume=40|issue=1|pages=102–131|doi=10.1177/0891241610387926|s2cid=145629287}}</ref>

Emir Estrada and Pierrette Hondagneu-Sotelo have gone to predominantly Latino communities of Los Angeles, CA. to observe the daily actions of street vendors. They analyze why adults participate in the informal economy. Although it revolves around a negative stigma of deviance, for a majority of individuals, the informal economy is not an ideal choice but an action necessary for survival. While witnessing the constant struggle of Latino individuals to make ends meet and trying to earn money to put food on the table, they witnessed how the participation of children either benefits the family or even hurt it. Through field notes derived from their participation, Estrada states, “children are not the ‘baggage’ that adult immigrants simply bring along. In the case of street vendors, we see that they are also contributors to family processes”.<ref>{{Cite journal|last=Estrada|first=Emir|title=Changing household dynamics: Children's American generational resources in street vending markets|url=2013|journal=Childhood|volume=20|issue=1|pages=51–65|doi=10.1177/0907568212458441|year=2013|s2cid=143932039}}</ref> Estrada's findings demonstrate that children are working in order to help contribute to their household income, but most importantly, they play a vital role when it comes to language barriers. The kids are not simply workers, they achieve an understanding of how to manage a business and commerce.