The Informal Sector It is imperative to give background information on the informal sector before stating the methods often used in estimating the informal sector. The informal sector is one sector that offers massive employment opportunities to a sizeable percentage of the population in Nigeria. Ekpo and Umoh (2015) stated this sector may be invisible, irregular, parallel, non-structured, backyard, underground, subterranean, unobserved or residual. The activities in the informal sector in Nigeria encompasses a wide range of small-scale, largely self-employment activities. Most of these activities are traditional occupations and employ traditional means of production. A further corroboration is that other activities in this sector include …show more content…
This sector can therefore be identified in the following employment categories: i. Self-employment, which includes own-account workers, heads of family businesses, and unpaid family workers; ii. Wage workers, which includes employees of informal enterprises, such as casual workers without a fixedemployer, home workers, paid domestic workers, temporary and part-time workers, and unregistered workers; and iii. Employers, which includes owners and owner operators of informal enterprises. Ekpo and Umoh (2005) stipulated further that the informal sector is made up: i. The informal productive sub-sectorinvolving the production of tangible goods in the areas of agricultural production, mining and quarrying (excluding petroleum), small-scale manufacturing, building and construction. In particular, they manifest in food production, woodwork, furniture making, garment making, welding and iron works, …show more content…
The conference affirmed, “The informal sector may be broadly characterized as consisting of units engaged in theproduction of goods or services with the primary objective of generating employment andincomes to the persons concerned. These units typically operate at a low level of organization,with little or no division between labour and capital as factors of production and on a smallscale. Most of the labour activities in this sector are based mostly on casual employment, kinship orpersonal and social relations rather than contractual arrangements with formal guarantees.” Methods Used in Estimating the Informal Sector Across the world, economists and statisticians have developed quite a number of methods that could be used to estimate the size of theinformal economy. Oduh et al (2008) stated that these methods can be summarized into three approaches, which are microeconomic, macroeconomic and the use of econometric models. i. Microeconomic is an approach that employs sample surveys based on voluntary replies or tax auditing and othercompliance methods. The reliability of the surveys depends on a number of factors which range frommethodology of sample designs to instruments of carrying out the survey. The disadvantages of this approach areconnected with normal
Lora Jo Foo. “The Yale Law Journal”, Vol. 103, No. 8, Symposium: The Informal Economy
Employees who earn subminimum wages usually are employed to work in sheltered workshops. Sheltered workshops are typically set up in the back room of a business. Employee duties in sheltered workshops frequently consist of performing simple repetitive tasks, such as sorting and hanging up donated clothing items. Sheltered workshops were initially intended to provide people with disabilities the vocational training needed to work in a competitive job setting. However, today people working in sheltered workshops are usually stuck here for years—still just earing pennies per hour. Subminimum wages are determined by how fast the employee with a disability can perform a task compared to a person without a disability. For example, the employee may be timed to see how many article of clothing he or she can hang in one minute with a limite...
Casual employment is often connected with unpleasant working condition including irregular working hours, low wages, intermittent employment and employment insecurity. Casual employment is usually dubbed with as employment with few benefits and rights. According to the Australian Bureau of Statistics (ABS), casual employees are defining as the employees who cannot get paid for their sick leave or annual leave. This definition reflects the most important aspects of causal works (Buddelmeyer, and Wooden, 2011).
In Mali, one of the poorest countries in the world, the process begins when businessmen called “locateurs” scout villages for lone children who appear to be lost or begging and trick them into a “great job” that is promised to bring them money for their families. Overnight, they are kept in a locked warehouse from where they are transported the next day and distributed to farmers for a low price of around $35. The boys, who at first are suspicious and uncertain that they have been sold, immediately begin working the next day, from 6 A.M. to 6:30 P.M., cutting cocoa beans from cacao trees, slicing them open, scooping out the beans, spreading them out on mats, and covering them to ferment. They are not properly paid, fed and up to 18 boys...
...F. and Whyte, K.K., Making Mondragon: The Growth and Dynamics of the Worker Cooperative Complex (Ithica: ILR Press, 1988).
Wicks-Lim, Jeannette. “The Working Poor.” New Labor Forum (Murphy Institute). 21.3 (2012): 17-25. Academic Search Complete. Web. 18 Oct. 2013.
“Macroeconomic indicators include economy-wide phenomena such as unemployment rates, national income, rates of growth, gross domestic product, inflation, and price levels” (Page & Stevens, 2005).
The Economy is the backbone to society. There are many factors that operate in, and govern our society’s economical structure. Factors such as scarcity and choice, opportunity cost, marginal analysis, microeconomics, macroeconomics, factors of production, production possibilities, law of increasing opportunity cost, economic systems, circular flow model, money, and economic costs and profits all contribute to what is known as the economy. These properties as well as a few others, work together to influence the economy. Microeconomics and Macroeconomics are two major components. Both of these are broken down into several different components that dictate societal norms and views.
If we define the economic characteristics in term of macro environment, there is several ways that we can categorize as the follow;
Unpaid work refers to the production of goods or services that are consumed by those within or outside a household, but not for sale in the market (OECD 2011). An activity is considered “work” (vs. “leisure”) if a third person could be paid to do a certain activity (OECD 2011).
In 1997, thirty percent of workers were employed in non-standard work arrangements ("HomelessnessÉ"). These consist of independent contracting, working for temporary help agencies, day labor and regular part-time employment. This type of work typically offers lower wages, fewer benefits and less job security. The underemployment rate stands substantially higher than the unemployment rate. Measures of underemployment reflect not only individuals who are unemployed, but also involuntary part-timers that want to work full-time.
We have positioned advantages and disadvantages of being formal/informal to better understand the challenges in both circumstances. However, it is necessary to closely analyse the precedence of successful formalization as well as successful informal institutions in order to challenge modern economic paradigms in development economics.
There are different but related terms which are used to define the informal economy. According to ICLS (1993 , 2003), it refers to
Simply put the informal economy refers to those economic activities that are neither taxed nor monitored by a government and are therefore not included in that government's Gross National Product (GNP) However in literature this phenomenon is discussed using different concepts such as informal, unofficial, irregular, parallel second underground, underground, grey markets, subterranean, hidden, invisible, unrecorded, shadow, ghosting and moonlighting. Illegal or criminal activities such as drug dealing or prostitution have been excluded from this definition, as have exchanges of unpaid work. My paper is therefore prepared with this omission in mind.
An increase in human population can influence our economy. Some of the factors that are affected are unemployment, poverty and the restriction of economic expansion. When the population increases, the cost of health, education, and other areas of urban growth are affected. Unempl...