Facilititating transitions from the informal to the formal economy

The informal economy represents more than half of the global workforce and also includes more than 90 percent of small and medium sized enterprises. Because of these large numbers, there are millions of workers and economic units around the world that do not have rights at work and have to endure poor working conditions.

The new international labour standard was adopted by the 104th International Labour Conference to fix these working conditions. The goals of this standard are to facilitate transition of workers and economic units to a formal economy, to promote the creation of enterprises and jobs in the formal economy, and to prevent formal jobs being viewed as informal.

Ways to transition an informal economy into a formal one are represented in many countries. For example Brazil has a national integrated policy framework to combat poverty, and it is quickly formalizing the country. The Philippines are also a good example as they bring not only income to typhoon victims, but also provide them with minimum wage, health, and safety. Moving all developing countries to a formal economy is the goal that the new international labour standard is working towards.

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Source & Copyright: ILO