The fight against the underground economy remains one of the most complicated problems to be solved for all countries in the world. Unique because it is based on the particular circumstances in which workers work and therefore on the socio-political enclave that leads them to separate themselves from the system. The result is a symbiosis so deeply rooted that it requires a complex global transformation. According to a study published this Tuesday by the Organization for Economic Co-operation and Development (OECD), six out of ten workers worldwide are now operating outside the law, most of them in developing and emerging countries. And what's worse for the future: your children are predestined to follow in the same footsteps. Only strengthening social protection and implementing skills development policies can end this vicious circle, the organization says.
In the 166-page document, entitled “Breaking the vicious circle of informal employment and low-paid work,” the international organization, which includes 38 countries, mostly developed nations, warns that people in informal work make up 60% of the global workforce. Informal employment includes those working in the informal economy, a niche of workers where the lowest paid workers are more likely to fall into poverty and experience health and age-related difficulties. Both she and the members of her household.
In this sense, the document warns that it is “extremely rare” for workers in this situation to switch sides and move into regular (or formal) employment, and warns of the negative conditions that this change entails in many cases . “Even when these transitions take place, they do not necessarily lead to an improvement in the income of the poorest workers,” the text says.
According to a comprehensive analysis, this is due to the low educational profile that characterizes these workers: around 45% have at most a primary school education – while this is only 7% of those in regulated employment. A deficit that prevents them from applying for regulated positions with higher salaries. “This hinders the adoption of new technologies and productivity, perpetuates informal employment and perpetuates a vicious circle of informality within generations,” he adds.
The predestination of the children of irregular workers to emulate their parents' situation is one of the key warning signs highlighted in the OECD's work. “This is because they go to school less often than other children from primary school onwards,” the text says, because their parents “spend less financial resources and time on their education”. Therefore, the transition from school to work is “longer and more uncertain for them”.
More chances
In addition to the photo of precarious employment, the OECD report also describes what aspects countries should focus on to address this reality. And it addresses two issues in particular: strengthening social protection and skills development policies. It is possible to extend social protection to workers in the informal economy “through a combination of contributory and non-contributory systems” and through the “mobilization of additional income”. […] by strengthening compliance and application of tax obligations so that the costs of formalization do not rise disproportionately.”
In line with skills development guidelines, the international organization considers it essential to “create more specialized training opportunities”. […] and public skills development programs adapted to their needs.” That is, through opportunities to recognize skills acquired through informal work. The text concludes that policymakers must recognize that “some workers will never be able to leave low-paying informal jobs” and therefore address this double burden through “remuneration policies that address inequality,” such as the establishment of an “effective minimum wage”, wages must be addressed” and “measures to improve the bargaining power of these workers”.
Follow all information Business And Business on Facebook and Xor in our weekly newsletter
The five-day agenda
The most important business quotes of the day, with the keys and context to understand their significance.
RECEIVE IT IN YOUR EMAIL
Subscribe to continue reading
Read without limits
_