HomeSpotlight on Colombia's informal sector
By Cristobal Camargo, Federacion Nacional de Trabajaldores del Comercio (FENATRAC, CGTD)
The informal economy is a phenomenon that is creating new cultural and socio-economic situation at the core of the working class, with a new social relationship between capital and labour in Colombia.
The CGTD defines the informal economy as a sub-sector; current estimates are that more than 50% of the economically active population on the American continent now belong to it.
During several meetings with workers and experts, this phenomenon is seen as having structural causes, mainly the neo-liberal economic adjustments and policies of the International Monetary Fund and the World Bank. The impact of these policies in Latin America and the Caribbean has led to diminishing employment, privatisation and a decreased role of the state.
The informalisation of the economy has occurred mainly in the third world countries and is often referred to as the "Underground Economy", "Submerged Economy", etc. Workers in the informal sector include self-employed workers, wage earners in small, medium and micro-enterprises, sub-contractors and micro-entrepreneurs. Sixty percent of informal economy workers are women who are head of the family, a high percentage of children workers, and working hours range from 12 to 16 hours a day.
Obstacles faced by informal sector
There are no legal rights to protect informal sector workers and Government has not introduced economic and social development policy in Colombia. Salaries for informal workers fluctuate between 40% and 50% of the legal minimum salary and there is no social security for most workers. The potential for new employment opportunities resulting from information technology have not been exploited.
Governments choose not to legislate to recover public space for markets. Street traders wares are repeatedly confiscated by Government officials. Agreements reached with Municipalities and District Administrative Offices to relocate traders fail most the time.
Proposals for organising of informal sector workers
The CGTD has prioritised the following:
- Abolition of child workers in the short, medium and long term.
- Legislation for labour protection as an objective of the CGTD and the workers' movement.
- Fighting for policies which involve Government in programs of employment, quality of life, social security, and the reduction of poverty.
Relations with workers and micro-enterprises
It is necessary to form alliances with small and medium enterprises, which have wage earners - who are mainly legally unprotected - to provide mutual support and to try and meet decent work and social security standards. There is a need to strengthen union organisation and to develop markets at both national and international levels.
Micro-entrepreneurs should work with organisations of small and medium entrepreneurs to enable governments to create and implement policies for technical assistance relating to capital (long-term low interest credit) and access to appropriate and practical technologies in each enterprise.
The informal sector in Colombia
The continual growth of informal work and the reduced capacity of productive enterprises to absorb workers has created a crisis for the work force.
The challenge is to encourage and create a better organisational culture, so that more informal workers find means to become part of unions, and to create new alternatives for professional training.
Economic profile of Colombia