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The informal economy

The informal economy is a broad term used to describe a very large and growing sector of the global economy where the worlds' working poor earn a living. The term seeks to capture the reality of the large share of the global workforce that remains outside the world of full-time, secure stable and protected jobs and in many cases with no form of social protection. 

Informal work traverses many occupations, including self-employed and own-account workers, migrant, casual and temporary workers in an increasingly globalising world economy.  The informal economy also comprises different sectors - apart from street vendors, informal market vendors and hawkers (StreetNet's sector) there are also waste collectors, home-based, informal transport and agricultural workers, etc. 

This page provides links to Women in Informal Employment: Globalising and Organising (WIEGO)- research on the informal economy and provides other examples of informal work.   

• Defining and counting informal economy workers: The International Labour Organisation has been hotly debating the meaning and definition of informal economy since the 70s.  
• Major occupational groups in the informal economy: To mention a few - Street vendors in Mexico City; push cart pullers in New York City, rickshaw pullers in Calcutta; jeepney drivers in Manila; garbage collectors in Bogota; and roadside barbers in Durban South Africa
• The statistical picture of the informal economy global workforce: It accounts for between 50%-75% of developing countries' employment.   

WIEGO research and policy analysis focuses on the working poor, especially women in the informal economy. 

Some sectors of informal economy work

Waste collectors: "In developing countries huge numbers of women, men and children collect sort and sell waste from households, streets, factories and offices, dumps, canals and rivers in order to make a living. They play a vital role in ensuring the cleanliness of cities, reducing costs of raw materials through re-cycling and in improving the environment" (StreetNet News # 5).

Case study on Kagad Kach Patra Kashtakari Panchayat (Trade Union of Waste-pickers), Chikarmane, Poornima and Laxmi Narayan, 2005 (link to WIEGO website).

Organising Waste Management Workers, the South African Experience, 2004, ILO, Geneva.   

Informal transport: "About 185 000 people work in the kombi taxi industry in South Africa. The workers provide the main form of public transport in the country. ...In addition to drivers there are queue marshalls, car washers, and administrative workers. In some parts of the country there are also fare collectors. Very few taxi workers are self-employed. Most work for a taxi owner and are paid wages. However, very few taxi workers have a formal written contract of employment. At the time of writing there are no national standards for conditions of work in the taxi industry and there is no minimum wage level" (Organising in the taxi industry: The South African experience, page 5).    

Organising in the taxi industry: The South African experience - CASE/ILO/SATAWU SEED Working Paper No.39 (PDF Acrobat) January 2003 - Barrett, Jane; - Series on Representation and Organization Building - Working paper. 

Home-based workers: Home-based workers are pieceworkers who are paid for the work they produce from the space in which they live. They are often  one link in the chain of production and have no collective bargaining power to negotiate the terms of their labour with contractors. In South Asia alone there are about 50 million home-based workers, of whom 80 % are women. As a result of union organisation and demands for recognition as informal economy workers,  led by the Self-Employed Women's Association of India, the ILO ratified the Homeworkers Convention in 1996. The Convention has still to be ratified by many countries.  

"Counting the Invisible Workforce: The Case of Homebased Workers", Chen, Martha Alter, Jennefer Sebstad and Lesley O'Connell, 1999, World Development, Vol. 27, No. 3.   

Home-based works in India: A disapearing continuim of dependence, Unni Jeemol and Uma Rani, 2004,  Paper presented at the EGDI and UNU-WIDER conference, Helsinki, Finland (link to Wiego website). 

International Labour Organisation (ILO)

In 2002 the International Labour Organisation (ILO) passed a resolution on Decent Work encouraging government, trade unions and business to work to protect vulnerable workers from exploitation. The Resolution recognised own-account workers for the first time as among vulnerable workers in the informal economy.