November 9th, 2009
The informal sector is not disassociated from the formal sector. There exists a certain type of interdependence through backward or forward production linkages with formal enterprises and through contract of labour or services. As a home for large number of workers, we shouldn’t forget that Asia is the home for the workers in Informal sector as well.
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The Conceptual Frame
There is no universal definition of Informal Sector. Generally, we only discuss on more visible segments of economic activities as informal sector. However, there is a limitless boundary of informal sector in modern world. Moreover, it is a hidden segment of economic activity with a vast number of labour force.
Many authors have often defined informal sector in a negative sense. To them, those are informal labourers who are not in “formal” sector, not protected by any labour law, not in formal ’employee-employer relationship’ and not getting any benefits entitled to them as employee. Besides, they are hardly recognized as a labourers who are not included in the ‘economic statistics’. Based on this argument, workers in Informal economy are termed neither Blue nor White collars; they are recognised as ‘No-Collar’ workers.
On the contrary, one of the Nepali scholars Dev Raj Dahal argues, “The benefits of informal economy are always underestimated despite its meaningful contribution to the livelihoods of the poor people. Obviously, informal sector continues to grow in direct proportion to the decline of formal economy. New technology tends to marginalize once formal economy by expanding the space of new economy. In Nepal, its contribution to national economy is more than fifty percent.”
The informal sector is not disassociated from the formal sector. There exists a certain type of interdependence through backward or forward production linkages with formal enterprises and through contract of labour or services.
As a home for large number of workers, we shouldn’t forget that Asia is the home for the workers in Informal sector as well.
| The report entitled ‘Industrial Relations in Europe” presents a statistics showing the change in union membership over the period of 100 years between 1890 and 1990. The statistics shows the reduction in union membership in the developed countries of Europe. Except in Sweden, the membership has decreased in the UK, Belgium, Italy, the Netherlands, France and Germany starting from 1980s. The 1997 survey of the International Labour Organisation also confirms to this fact. The ILO report shows that the trade union membership has increased in Asian and newly democratic countries (Eastern Europe and South Africa). It is actually a reflection of invisible change in socio-economic frame of labour use. The process of formalisation of labour started from the era of industrial revolution has now reversed. Informalisation of labour has geared up. As a result, formal sector workers are being pushed towards informal sectors through various types of outsourcing and sub-contracting. Thus, the natural outcome is the decline in union membership, where unions are basically focussed on the formal employment. |