To have an informal job refers to when the employee has little or no job security, has low wages, few benefits and limited hours of work, as well as the non existance of a contract. Informality also alludes to a negative effect on the distribution of public goods and services. In fact, we can mention that the informal sector refers to all companies that are not registered in the tax administration or SUNAT in Peru. On the other hand, according to World Bank, informal employement represented 57% of all Urban Employment in 2012, and comparing it to Latin America, Peru still presents one of the highest indices of informality; therefore it is vital to analyze the causes of it.
Most of the businesses in Peru are informal, which means these businesses avoid paying taxes. This type of business has been slowly increasing as the years pass by, with figures of 68.4% of informal workers, being a very high percentage compared to other countries in South America, such as Uruguay which has 23.9% of informality (Pasquali, 2021). This means that for every 10 Peruvians, 7 of them are working informally. These numbers are no good, not just because of the amount of people but also because of the amount of taxes being evaded. Without these taxes we can't properly regulate the business and how to properly get insurance for all these workers. In this blog, we will explain a little about what informality is, why it occurs, why it is affecting Peru and why these could mean that not all Peruvians are having the same opportunities.
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