Plight of labour in informal economy of Pakistan

Abstract

Informal economy has been the source of income for millions of people in many developing and underdeveloped countries since a long time. But the debate regarding informal economy started in the 1970’s when Keith Hart an anthropologist termed the work of migrants in rural communities in Accra, Ghana as informal work. Later on, International Labour Organization (ILO) coined the term in their world employment mission in Kenya in 1972 (WEIGO). In 1953, Arthur Lewis predicted that economic development in the developing countries will result in creation of enough jobs to shift the informal labour to formal employment. However, opposite has been the case as millions of people still depends on informal means of employment for their livelihoods. People opting to work in informal sector are pushed by several reasons; complex and long regulatory procedure force people to start their small businesses in informal sector; lack of formal sector employment can force people to look for work in the informal job market or even start their own businesses; people can also become part of informal economy to simply avoid regulations and taxes in order to maximize their profits and earn more money; and the most prevalent case in the developing and underdeveloped world is poverty and low skillset most of the people possess due to which it is harder for them to find employment in the formal job market even if there are ample amount of jobs which is not the case in underdeveloped and developing world. Poverty and the absence of required skills force the poor and jobless to look for work in informal sector of the economy from which they are hopeful of earning some money to feed their families. The above mentioned cases are somewhat prevalent around the world due to which the people around the world are part of informal economy. Informal work is not just restricted to men but it also is the primary source of work for most of the women in the developing world (Chen, Women in Informal Sector: A Global Picture, The Global Movement, 2001). Women mostly work in low end jobs which include low end jobs such as domestic work and other unprotected part time jobs. Overall, as the 2018 report of ILO suggests, almost 2 billion people are part of informal economy which include both men and women. Being part of Informal economy means that most of them, in the absence of state led regulations, suffer from poor working conditions and non-existent social protection (ILO, 2018). As informal sector economy is unregulated, workers that are part of it have irregular and uneven jobs resulting in decent work deficits. One way or another informal economy is now a major part of economy particularly in the developing world and it will continue to be the source of income for millions