In Latin Americahe informal employment It is a phenomenon that has been around for a long time. This situation refers to those workers who are not protected by labor laws and do not have certain benefits such as social security, paid vacations or formal contracts.
Informal employment is a reality that affects millions of people who are often forced to work in precarious conditions, without basic rights and with low wages, which has a negative impact on the quality of life of workers and in the economic development of the region as a whole.
In this sense, this event is characterized by the lack of registration and legal protection. Informal workers are often employees in the informal sector of the economy, which includes activities such as street commerce, street vending and unpaid domestic work. On the other hand, the unemployment it is also a determining factor in the proliferation of informal employment. When there are not enough formal job opportunities, people turn to informal employment as the only option to survive economically.
Poverty and inequality are contributing factors as many people do not have access to education or the training necessary to access formal and well-paid jobs, for which they are forced to work in the informal economy. And it is that unfortunately, in some parts of the region, labor laws are not adequately applied or there are legal loopholes that allow the proliferation of informal employment.
Chart of the day: Informal employment in Latin America
According to Statista, workers in the informal economy face a risk between three and four times greater of falling into poverty, and that is that due to the Covid-19 pandemic, a wide variety of people had to undertake informally, since this catastrophe wiped out a large number of jobs globally.
The International Labor Organization, announced that the informal labor force represents more than half of the total number of people employed in Latin America. With approximately eight out of ten workers employed in the informal sector in 2022, Bolivia has the highest informality rate in the region and one of the highest in the world.
Also in the Andean zone, Ecuador and Peru they have more than two thirds of their population employed in informal salaried jobs. While Mexico and Brazilthe largest Latin American economies, this percentage rises to 57 percent and 39 percent, respectively.
In the south of the continent, Chile and Uruguay show, on the contrary, more formal than informal employment, both with an informality rate below 35 percent.