15 terms

informal sector

what is the informal sect
it is what the formal isnt?
not governmetn registered
no monitoring, regualtions,
few standards for the workers and highly demanding/competitve
made of people of all levels of power and wealth
- owners/manufactures/desperate workers/ formal sector contractors
what networks provide
soical capital
oppertunity to enter new fields
loads and ecnoomic capital
3 types of infomral activity
1 - subsistance lviign = domestic workers + self employed
2- small enterprise = subordinate/temporary contracts ot formal sector
3- autonomou = small scale, tech, highly sophisticated (rare)
the pyramid of earing vs. gender
employer -> own account opperator --> unpaid family workers --> other informal wage workers --> industrial outworkers and home workers
causes of infomrality
failure of development (from tradtional to modernizing)

ovreburdening state


safety net

overburdening state's impact on informality
too many regulations in teh formal sector push the informal sector into being more profitable b/c can do the same opperations without being monitored
structural implications on the infomral econ
formal sector needs things made for cheap to keep their own margins higher = exploit and subcontract the informal sector to amke things for chepaer and sell for more
- make the fomral sector hard to monitor as well
infomral sector as a safety net
when the economy is suffering - the informal sector provides a place for proftit and job oppertunity for the indsutreis who are suffing in the formal secotr
informal secotr as marginalized
need based economy where the independant sphere is made of people who dont have other options = more desperate
survival eocnomy where majority of pop is employed
formal sector as failure of development (from tradtional to modernizing)
this is the western ideology
where the west looks at the informal sector as a place that was not modernized after post-colonialism properly
this definition has waxed / wayned over hte years b/c the west has come to see the informal sector as a place of diversity, opportunity, and western profit -
modernization vs. formality
orignally infoal was seen to dissappear w/ improved development = but the opposite has happened - it has (and will continue to grow)

assumpiton - through macro policy changes and western influce - the global south would become more 'developed' and have a moral formal secotr - yet ironically the west fuels the modern sector for a structural economy to form = where west demands high profit margins = unnatainable in formal sector so the formal sector sub-contracts to the infomral sector to provide the west with the cheapest goods = creates a cycle where west looks good b/c only contracting the 'formal and reuglated' econ but this is hard to monitor b/c most products are still subcontracted
neoliberal legal explanation for infomrality
infomral proodctution is b/c of overburdening of the state
if the state had fewer regualtinos = there would be less need to go to the informal secotr b/c it would be a fair feild of competiton
- this would lead to no regulations/standards/or incentives for compnaies to give workers rights b/c they would merely compete and use market governance to switch contractors based on profits
where the informal/formal economy are seperate
where there is a divide b/w the two

doesnt apply today b/c of structural implications where the informal sector
- fuels the formal sector with subcontracting
- is a safety net = when the fomral econ fails or is a recession there is still oppertunity in the infomal secotr to make subsistance

tehrefore they feed as a loop = no dualistic approach
issues for workers
- unregualted so few rights

-no monitoring = no standars to be upholding

-intesne competion = market governace forms = no real need for the worker/ expendible = creates a tension = and desperation= increases vulnuralbiyt for exploitation

hard to mobalize/advocate b/c of the diveristy of workers/theri needs/their abilities and thier location

informal secotr = global phenomeonon - need to stand united but imposssible b/c differnt expectations / segmentations/ standards of living/ wage and worker rights

-b/c infomral = suspect to fines/penaliteis/government issues if causing issues in the formal sector = wealthier infomral companies can bribe their way out but those most vulnurable get stamped with the fines = cant avoid them
positves of informal secotr
can reach areas that formality cant
keep products cheap
depend on relational / reputation /trust goverance where if one's product or quality is no good = market will switch = keeps for internal quality contorl

gives safety net
gives oppertunity for innovation and creativity (even if out of desperation)