In 2019, we identified the highest proportion  of people having informal jobs (these are jobs without constitutional work rights, without formal job contract): 41.4% (Brazilian Institute of Geography and Statistics, n.d.). Data from a National Survey from 2015 (PNAD), showed that among the private sector, 20.6% of the workers were informal workers (that means without formal job contract) (Brazilian Institute of Geography and Statistics, 2015b).

References:

Brazilian Institute of Geography and Statistics. (n.d.). Desemprego cai para 11,8% com informalidade atingindo maior nível da série histórica. Retrieved December 3, 2019, from https://agenciadenoticias.ibge.gov.br/agencia-noticias/2012-agencia-de-noticias/noticias/25534-desemprego-cai-para-11-8-com-informalidade-atingindo-maior-nivel-da-serie-historica

Brazilian Institute of Geography and Statistics. (2015b). Pesquisa Nacional por Amostra de Domicílios—2015. https://biblioteca.ibge.gov.br/visualizacao/livros/liv98887.pdf

Economy activities are highly regulated and mostly taxed in Hong Kong. Most of employers are regulated by the Companies Ordinance and the Society Ordinance, whereas all forms of employment, including full-time, part-time, permanent, and temporary, are protected by the Employment Ordinance and Employee’s Compensation Ordinance. For self-employed individuals without a contractual agreement, their rights and benefits are less protected, and their income is taxable. As a result, the size of informal economy in Hong Kong is very small. The followings are the two major types of informal workers in Hong Kong: 1) foreign domestic helpers and 2) hawkers.

Foreign domestic helper is the main type of informal care workers in Hong Kong. By the end of 2018, there were a total of 386,075 foreign domestic helpers in Hong Kong (Census and Statistics Department, 2019j) and they comprised 5.2% of HK population as well as 9.7% of labour force (Census and Statistics Department, 2019j). Their income is not taxable. It is important to note that, unlike other countries, the rights and benefits of foreign domestic helpers in Hong Kong are protected, as well as the local citizens by the Employment Ordinance and monitored by the Immigration Department.

Hawkers refer to vendors selling street food and inexpensive goods in Hong Kong. Due to concerns about the city’s hygiene and health, the Government has begun to decrease the number of hawker licenses and impose stricter restrictions on hawking activities since 1970s. The number of licensed hawkers had dropped from over 70,000 in 1940s to 50,000 in 1970s. By the end of 2018, there were only 5,531 licensed hawkers, including fixed-pitch or itinerant (i.e., travelling) hawkers. At the same time, the Food and Environmental Hygiene Department has exerted strict control over illegal hawking activities and there were only around 1,511 hawkers by the end of 2018 (Food and Environmental Hygiene Department, 2019, September 5).

References:

Census and Statistics Department. (2019j). Women and Men in Hong Kong – Key Statistics 2019 Edition. Hong Kong Retrieved from https://www.statistics.gov.hk/pub/B11303032019AN19B0100.pdf

Food and Environmental Hygiene Department. (2019, September 5). Hawker Control. Retrieved from https://www.fehd.gov.hk/english/pleasant_environment/hawker/control.html

In 2018-2019, the proportion of workers in the non-agricultural sectors that were engaged in the informal sector was reported as 64.8% (National Statistical Office (NSO), 2020). The share of the informal non-agricultural sector was reported as 54.1% among female workers and 71.5% among male workers (National Statistical Office (NSO), 2020a).

References:

National Statistical Office (NSO). (2020a). Periodic Labour Force Survey [PLFS]. Ministry of Statistics and Programme Implementation, Government of India.

Based on labour force surveys, it has been estimated that between 61 and 70 per cent of the labour force are employed in the informal sector (Alatas & Newhouse, 2010; Firdausy, 2000). Rothenberg and colleagues (2016) explain the development of the Indonesia economy and its impact on the informal sector. Since the 1970s, Indonesia has developed from a ‘primarily agriculture-based economy’ to an economy based largely on manufacturing and services. In terms of GDP, the share of agriculture declined from 45 per cent (1970) to 14 per cent in 2014. The authors further explain that the reduction in agriculture coincided initially with urbanisation that led to an increase in the informal sector within urban areas. Growth in the manufacturing and service sectors led to an increase in formal sector employment ‘from 34.7 per cent to 44.9 per cent in 1997’ (Alatas & Newhouse, 2010, p.32). However, the economic crisis in 1998 led to shift from people formerly employed in the formal sector becoming employed in the informal sector. The following political crisis, resulting in ‘a regime change and political reform’ aimed to increase minimum wages. This development is understood to have contributed to the ‘weak recovery of formal sector employment’ (Rothenberg et al., 2016, pp.99-100).

References:

Alatas, V., & Newhouse, D. (2010). Indonesia Jobs Report: Towards Better Jobs and Security for All (Vol.2): Main Report (English). http://documents.worldbank.org/curated/en/601901468285575499/Main-reportAlzheimer’sDiseaseInternational

Firdausy, C. M. (2000). The social impact of economic crisis on employment in Indonesia. http://www.ismea.org/asialist/Firdausy.html

Rothenberg, A. D., Gaduh, A., Burger, N. E., Chazali, C., Tjandraningsih, I., Radikun, R., Sutera, C., & Weilant, S. (2016). Rethinking Indonesia’s Informal Sector. World Development, 80, 96–113. https://doi.org/10.1016/j.worlddev.2015.11.005

Research spearheaded by the Inter-American Development Bank (2006) on the informal economy in Jamaica (the informal economy referring to pure tax evasion, the irregular economy, and illegal activities) found that these activities represented 40% of the official GDP in 2001. This growth  is considered to have contributed significantly to the decline in poverty during that decade.

It is important to note that this growing sector represents a diverse group of enterprises and workers in Jamaica, ranging from small-farm workers, retail sale people, street vendors, domestic helpers, taxi drivers, and local peddlers to fairly sophisticated small to medium entrepreneurs, as well as to illicit drug farmers and transport providers. Persons engaged in this sector often are unable to access pensions, social support, or insurance in later life (Jamaica Gleaner, 2016).

COVID-19 and the Informal Economy

Applicants of the Compassionate Grant programme, who receive a one-time payment of J$10,000.00, accounted for over 83% of the total CARE programme applications. Programme eligibility includes the unemployed (not laid-off due to COVID-19), informally employed, older people and students over 18 (CARE Brochure, 2020). Speaking to the large number of applicants for this component of the CARE Programme, the Minister of Finance, Nigel Clarke asserted that Jamaica’s economy is largely informal, which depends on meeting people physically for goods and service in exchange for cash payment. As a result, physical distancing will disproportionately affect the informal economy (Jamaica Observer, 2020).

Table 7. Summary of Jamaica’s Economic Performance

Source: Ministry of Finance, Fiscal Policy Paper, 2020-2021

References:

Government of Jamaica. (2020). Fiscal Policy Paper 2020-2021. Ministry of Finance and the Public Service. Available from: https://www.mof.gov.jm/wp-content/uploads/fiscal-policy-paper-2020-21-140220.pdf

Jamaica Observer. (2020, May 14). JHTA working with Gov’t to resolve SET Cash programme delays – Jamaica Observer. https://www.jamaicaobserver.com/news/jhta-working-with-govt-to-resolve-set-cash-programme-delays/

Ministry of Finance and Public Service. (2020). CARE: COVID-19 Allocation of Resources for Employees. https://jis.gov.jm/media/2020/04/CARE-Brochure-Ministry-of-Finance-2020.pdf

The informal sector consists of both professionals and non-professionals engaging in small-scale commercial activities such as selling second-hand items, shoe-shining, street vendors, carpentry, vegetable selling, repair and construction work. These activities are not formally established, regulated or protected by the government and often times, simple skills are used to generate income and profits (Institute of Economic Affairs, 2012). There is a higher labour force participation rate among men (77.5%) compared to women (71.5%) (International Labour Organization (ILO), 2016). The considerable part of the population that is unemployed or in the informal work is severely under-insured, which limits their access to health care significantly.

References:

Institute of Economic Affairs. (2012). Informal sector and taxation in Kenya. https://s3-eu-west-1.amazonaws.com/s3.sourceafrica.net/documents/118220/The-informal-sector-and-taxation-in-Kenya-IEA.pdf

International Labour Organization (ILO). (2016). Country profile. https://www.ilo.org/dyn/normlex/en/f?p=1000:11110:0::NO:11110:P11110_COUNTRY_ID:103315

The informal economy is defined by the International Labour Organisation (ILO) as referring to all economic activities that are – in law or in practice – not covered or sufficiently covered by formal arrangements. New Zealand’s shadow economy was estimated at ~9% of GDP in 2015 and has been trending downward since 2010 (The Global Economy, n.d.).

References:

The Global Economy. (n.d.). New Zealand: Shadow economy. The Global Economy website. Available from: https://www.theglobaleconomy.com/New-Zealand/shadow_economy/.

Reportedly, 85.5% of all new businesses in South Africa start up unregistered and operate in the informal economy (Williams, 2017). The following describes the informal economy in South Africa (Williams, 2017):

1. Approximately 32.7% of non-agricultural workers are employed in the informal economy, of which more than half (54.4%) are in informal jobs in informal enterprises;
2. 39% of employed women and 29% of employed men are working within the informal economy;
3. The informal workforce comprises of 67% informal employees, 25% ‘own account’ workers, 5% employers and 3% unpaid family workers;
4. 26% of employment within metropolitan areas is informal and is distributed across trade (29%), private households (29%), construction (12%), manufacturing (8%) and services (other than private households) (7%).

When compared to other countries (e.g., India where the informal economy comprises 84.3%, Brazil 42.3%, and China 34.4%), the informal economy in South Africa is less pervasive and found in particular industries (Williams, 2017).

During South Africa’s third quarter in 2018, the informal sector increased in employment by 188 000 when compared to the previous quarter (StatsSA, 2018d). These gains were mostly seen by industries of trade (+75 000), finance and other business services (+67 000), and construction (+48 000) (StatsSA, 2018d). Employment losses within the informal economy for the same period were largely found within the community and social services (decreased by 7 000), mining (-2 000), and utilities (-1 000) industries.

Essentially, the increase of economic engagement in the informal sector means that fewer South Africans are contributing to tax – a key source of revenue for South Africa.

References:

StatsSA. (2018d). Quarterly Labour Force Survey. Available from: https://www.statssa.gov.za/?p=11882

Williams, C. C. (2017). THE INFORMAL ECONOMY AS A PATH TO EXPANDING OPPORTUNITIES. https://doi.org/10.2139/ssrn.2804172