A new report developed by the International Labour Organization (ILO) analyzes achievements in terms of employment formalization to guide future actions aimed at making the struggle against informality more efficient. Currently, around 53% of the working population in Latin America work under informal conditions.

During the past few years, Latin America and the Caribbean registered a process of employment formalization that improved the working conditions of 39 million workers. However, according to the ILO the informality rate is around 53%, which still is a very high rate.

The new report developed by ILO and presented in Lima, calls countries in the region to re-think formalization policies and implement them as part of sustainable programs, as well as to address the changes registered in the world of work in terms of production and employment, including new informality modes and achieving higher economic growth rates.

The document on “Formalization policies in Latin America and the Caribbean” has gathered evidence of policies and formalization strategies and their results, with the collaboration of 34 specialists. The report has 17 chapters that aim at identifying the results and limitations registered by the transition towards formality in Latin America and the Caribbean.

“In general terms, the impacts of growth and changes in the economic structure on formalization are larger than the impacts from institutional interventions”, said ILO Director for Latin America and the Caribbean, José Manuel Salazar-Xirinachs, who was co-editor of this report.

In addition, he explained “the best results come from experiences that combine fast economic growth and transformation with institutional interventions and integrated policies”.

The informality rate in Latin America and the Caribbean is 53%, which means that nearly 140 million workers are under informal conditions.

“These workers are not protected by labour legislation nor by social security. Many of them are exposed to insecure working conditions, they nearly have no training opportunities, they have irregular and low incomes, and have more extensive working days” said Salazar.

The survey points out that the recent formalization experience, which took place from 2005 and 2015, happened in a context of regional economic growth, which, in certain cases, was combined with multiple policy interventions. The last few years, economic growth has slowdown, so formalization demands more focused and integrated strategies.

“The most encouraging results took place in places where multiples initiatives were implemented, which were combined and developed for years, even for over a decade”, said the ILO’s employment specialist, Juan Chacaltana, another of the editors of the report.

Chacaltana claimed that, when dealing with informality, policy makers face a “complex, heterogeneous and multidimensional phenomenon”.

ILO’s new publication on formalization states that the first challenge for countries in the region is to have integrated programs that are developed through time, instead of doing isolated efforts that turn out to be small and short termed.

Secondly, it considers that it is key to go beyond the labour market and aim at a stronger growth, suggesting that productive development policies are a mechanism to go for higher, sustained, inclusive growth, which can also be more effective in the creation of formal jobs.

In the third place, the report urges to find mechanisms to address new forms of production and employment, which includes working against the new forms of informality that can be found in labour markets.

Source: ILO