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Informal Economy
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A global economy that relies on low-wage production to keep profits high has pushed more and more workers out of good jobs and into the informal economy. Around the world, work is increasingly outsourced, subcontracted, temporary, and part-time—leaving workers with no benefits or social protections. This trend has increased the size of the informal economy and forced many workers out of the political, legal and economic mainstream, without a voice in their workplaces or communities. In some developing countries today, the informal economy exceeds 90 percent of total employment.

  Working with union partners and other allied groups around the world, the Solidarity Center helps empower informal workers to stand up for their rights and raise their living standards. Photo by Solidarity Center

Workers in the informal economy clean houses, collect refuse, park cars, drive taxis, sell food on the street and sew garments in their homes. In construction and agriculture, they seek out jobs as day laborers. At worksites, in factories, and even in schools, they are temporary or contract employees, hired over and over, always short-term. Informal employment is irregular and unreported. 

Workers in the informal economy often have no single employer, no contract, no set wage and no health care, pension or other benefits that formally employed workers enjoy. Informal work exists in every country. It supports and is often the very foundation of the formal economy. Women and migrant workers make up a disproportionate share of informal workers.

Because unions are the primary promoters of worker rights and social protections worldwide, their support for informal workers is crucial. By supporting informal workers’ efforts to join together to make positive change, unions enable these workers to build power and gain an economic and political voice. Working together on common goals, workers in the formal and informal economy help ensure that all work is fair, secure, and protected.

International standards recognize the plight of informal economy workers. The International Labor Organization (ILO)'s 2002 resolution, “Decent Work and the Informal Economy,” calls on member states to treat the goal of decent work as an equal aspiration for all working people, formal and informal workers alike, and for governments to create conditions for all workers to achieve decent work and a decent life in conditions of dignity and equality. The ILO "Decent Work for Domestic Workers" standard (Convention 189)  requires governments that ratify it to ensure that domestic workers are covered by the ILO core labor standards.

The Solidarity Center is part of a broad-based movement to raise awareness about the informal economy. Working with union partners and other allied groups around the world, the Solidarity Center helps empower workers in the informal economy to stand up for their rights and raise their living standards.

A December 2011 conference held in Cape Town, South Africa, organized by the Solidarity Center focused on the issues, needs and experiences of informal workers. With support from the U.S. Agency for International Development (USAID), the conference brought together workers in the informal economy, union leaders and researchers from around the world to explore ideas and strategies for helping precarious workers improve their lives and livelihoods.

Bringing a Global Perspective to U.S. Labor Education Conference. March 27, 2013—Solidarity Center staff are leading workshops or presenting panels with a global focus at the 2014 conference of the US-based United Association for Labor Education (UALE), this week in Los Angeles.

Kenya: A Commitment to Unionize Informal-Sector Workers. January 29, 2013— In Kenya, where the informal sector accounts for 80 percent of employment and contributes 25 percent to the nation’s gross domestic product (GDP), union outreach is helping give these workers a voice on the job.

Georgia: Establishing Formal Agreements for Workers in Informal Markets.
January 31, 2012—With a labor code that disadvantages workers and an increasingly hostile attitude toward the rights of working people, the Republic of Georgia is no easy place to join or persist in a union. This is particularly true for people trying to eke out a living in the informal economy.

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