Sunday, November 21, 2021

About Us

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. 





 





How Informality and the pandemic affected Tourism in Peru


The tourism sector is the third most important activity in Peru, as it generates 3.9% of the national GDP and is one of our main sources of foreign exchange. There is no doubt, then, of the importance of this sector for the country's economy, even more so if one considers the important role it plays in boosting the economy due to its transversal nature and in the generation of jobs. However, informality is a major problem that prevents it from reaching its full potential. To combat it, the Ministry of Foreign Trade and Tourism (Mincetur) presented the Support Plan for the Formalization of the Tourism Sector by 2021.


However, the potential of tourism will only materialize if the economic activities related to the sector are carried out in formality. Informality is a major obstacle to competitiveness, as it is one of the main obstacles to the effectiveness of policies aimed at improving the quality and provision of tourism services. It is important to mention that the National Strategic Tourism Plan (Pentur) already contemplates formalization as a measure to improve competitiveness in the sector and, therefore, establishes the objective of promoting formalization coordinated with the private sector, since informality diminishes the efficiency of the sector by congesting public infrastructure and reducing revenues to supply it. The Support Plan for the Formalization of the Tourism Sector ratifies this objective and sets the lines of action to achieve it. 


The general purpose of the Support Plan for the Formalization of the Tourism Sector is to promote the formalization and improvement of competitiveness in the provision of tourism services. In line with this purpose, 4 specific objectives are proposed:to increase the number of providers of formal tourism services; to increase the number of tourism service providers with quality recognition and certifications; to optimize actions related to the formalization of the tourism sector at the three levels of government; and to constitute the tourist as an active agent that promotes formalization.

Thursday, November 18, 2021

Informality in Turism


From: Redacción RPP. (2021, julio). El 64% de trabajadores en el sector turismo en Perú eran informales, según la OIT. RPP. https://rpp.pe/economia/economia/el-64-de-trabajadores-en-el-sector-turismo-en-peru-eran-informales-segun-la-oit-noticia-1345149




 

Wednesday, November 3, 2021

Informal domestic work

 


Informal jobs in Peru are found almost everywhere, only 20% of workers or business are formal therefore, pay taxes. In this blog we have mentioned informality in different sectors such as public transport, local shops or “bodegas”' and Gamarra enterprise that sells clothes, textiles and miscellaneous things and also holds most of the “ambulantes” of Lima. In this post, we will address another type of informality, the economic sector of domestic work. 


Domestic workers are mainly found in households of the capital of Peru, where most of the middle and upper classes are found, and they hire people to do different tasks around the house such as cleaning, cooking,  taking care of children, and other jobs of maintenance such as gardeners and usually these jobs are for women, except those that require more strength or the ability to fix things. This type of job, apart from being informal, it also “symbolizes discrimination of origen, class, gender and ethnicity” (ILO (2013) pg. 13) and the reason is because many of domestic workers are women of a wide range of age, they don’t or have little education and employment experience, and come from different parts of the country, usually from the Andes. Another important issue of this type of employment is that many households hire underage girls, encouraging labour exploitation of minors (ILO (2013) pg. 14). This occurs because people tend to treat their domestic workers poorly, not only pay wise but the noticeable difference between them and the workers like eating in different rooms or at different times, or having special tableware for them. 


On the other hand, informal employment can be seen concentrated in many sectors with a tendency to grow. Domestic workers are one of those sectors which is characterized by high incidence of informal agreements and contributes considerably to informality, mainly among women. With the aging of the population, the increasing rates of participation of women in the workforce and the preference for caring for domicile of the elderly and chronically ill, families increasingly resort to domestic workers to help in their homes and with their children and elderly relatives. However, Domestic work has three specific characteristics in the context of the informal economy: the relationship of work takes place in the private sphere, the home; may not be very well defined or covered by rules highly personalized social or contexts; and remains outside the conventional regulatory framework of many countries (Eurofound, 2013).


In conclusion, it is therefore recommend to pay special attention to domestic workers, since it is one of the groups particularly vulnerable to the most serious decent work deficits in the informal economy. Informal employment can take different forms, and criteria used by governments to define and identify informal jobs and workers in informal employment also varies. According to the International Conference of Labor Statistics (17th ICLS), it is considered that wage earners have an informal job if their relationship of work, in law or in fact, is not subject to the national labor legislation, income tax, to social protection or certain benefits related to employment. In most cases, it is defined as the absence of employment related to social security, and in occasions coupled with a lack of annual license or license for paid sickness. (ILO, 2002; ILO 2003).







Bibliography

  1. International Organization of Labour. (2013). “Trabajo doméstico remunerado en el Perú. Situación y perspectivas en función del Convenio 189 y la Recomendación 201 de la OIT.” https://www.ilo.org/wcmsp5/groups/public/---americas/---ro-lima/documents/publication/wcms_213173.pdf

  2. ILO. (December 5th, 2016). Formalización del trabajo doméstico. Obtenido de https://www.ilo.org/wcmsp5/groups/public/---ed_protect/---protrav/---travail/documents/publication/wcms_574115.pdf 

 

ILO- Trends in informal employement in Peru (2004-2012)




International Labour Organization, Programme for the promotion of formalization in Latin America and the Caribbean. (2014). "Trends in informal employment in Peru: 2004-2012."

Tuesday, November 2, 2021

“Informal Economy” is a major part of Peru’s labor market- Embeded Video para la entrega 4



In this video From CGTN America it shows us how the informal sector works and why it so many business refuses to go formal.


CGTN America.(2018, April 15) "Informal Economy" is a major part of Peru's labor market [News Video] Retrieved Form “Informal Economy” is a major part of Peru’s labor market - YouTube

About Us

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...