100 jobs is bad for an economy

International Labor Organization

Geneva (ILO News): Two billion people, more than 61 percent of the global workforce, earn their living in the informal economy. This is the conclusion reached by the ILO in its publication
Women and men in the informal economy: A statistical pricture (Third Edition). Based on statistical information from more than 100 countries, the ILO makes estimates of the size of the informal economy.

Excluding agriculture, half of the global workforce would work in the informal sector.

The majority of people in the informal sector - 93 percent - live in emerging and developing countries. The following applies to all of them: a lack of social protection, low labor rights and a lack of decent working conditions.

Differentiated according to regions, the following picture emerges: In Africa 85.8 percent of employees work in the informal sector, in Asia and the Pacific the proportion is 68.2 percent, in the Arab states it is 68.6 percent, 40 percent on the American continent and 25.1 percent in Europe and Central Asia.

The informal sector is the more frequent source of income for men (63.0 percent) than for women (58.1 percent). Expressed in absolute numbers: of the two billion people in the informal economy worldwide, more than 740 million are women. In low- and middle-low-income countries, women are more likely to be involved in informal employment. In addition, the working conditions often do not offer any protection.

The level of education is the key factor in overcoming informality. As the level of education rises, the proportion of people working in the informal economy decreases worldwide. Education also counts: People with secondary or tertiary education are less likely to work in the informal sector than those who have either no education or only primary education.

People in rural areas are at twice the risk of working in the informal economy than in urban areas. Agriculture is the sector with the highest informal employment rate, estimated to be more than 90 percent.

Working in the informal sector is not to be equated with poverty. But poverty can be a cause as well as a consequence of informal employment. For hundreds of millions of people, informal work means poor social protection, no labor rights, and a lack of decent work. For companies, this means low productivity and a lack of access to finance.

The majority of people do not work voluntarily in the informal economy, but rather as a result of a lack of opportunities in the formal economy and a lack of other means of subsistence.

Informality has a variety of causes, which particularly affect regulatory and structural issues. It is undisputed that government measures can accelerate the process of transition to the formal economy in the context of social dialogue. In any case, appropriate and integrated measures are required worldwide that are tailored to the different situations and needs.

Informality is a major challenge for the implementation of decent work for all and sustainable inclusive development. "

Rafael Diez de Medina, Director, ILO Statistical Department
“Informality in all its forms has multiple and negative consequences for workers, companies and societies and in particular is a major challenge for the implementation of decent work for all and sustainable inclusive development. We have compiled the data that will be incorporated into the framework of the sustainable development agenda. We would like to thank all the countries that have provided comparable data, ”said Rafael Diez de Medina, Director of the Statistical Department of the ILO.

The ILO report underlines the importance of ILO recommendation 204 Transition from the informal to the formal economy as well as the role of the sustainable development goals, which include indicators on informal employment (8.3.1).