The International Labour Organisation (ILO) is currently locked in a tough battle with the informal sector of economies of nations. According to ILO data, the informality rate in Latin America and the Caribbean has reached 53 per cent, affecting nearly 140 million workers.
While working conditions, according to ILO are mostly precarious, it also pointed out that labour rights are not respected and social protection is missing.
In Peru, 73 per cent of employed work is in informal conditions, according to official figures released recently by the National Institute of Statistics and Informatics of Peru (INEI). This situation affects more than 12 million workers in this country, mainly women.
Continuing, the global labour organisation said in a country where 73 per cent of employed work is in informal conditions and mostly carried out by women, the Rojas sisters are now convinced that formalising their micro-enterprise will be good for their business and its employees.
Their store is in the heart of Lima’s sprawling Gamarra clothing and textile market that employs more than 80,000 people. Many of them are in informal employment, where workers lack social protection, rights at work and decent working conditions, and enterprises find it difficult to access finance. The market is a major focus of the Peruvian government’s efforts to tackle informality.
Sisters Emily and Jenny Rojas Vera employ 11 people in their garment store, where they sell their own men’s clothing brands: ‘Jhon Houston’ and ‘Gino Giordano’. Six of those employees are on the payroll as formal workers. “Our goal is to formalize them all, but we have not been able to reach that goal because we did not meet production targets,” explained Emily Rojas.
“Formalising is very important for us, since it allows workers to enjoy certain benefits, including leave, health insurance and a pension at retirement, among others. And as a company, being formal helps us access certain benefits such as financing”, added her sister Jenny Rojas.
The Rojas sisters participated in training offered by Peru’s Ministry of Labour and Employment Promotion through the Formaliza Peru centre, which provides guidance and support services to employers and entrepreneurs with the process of labour formalisation.
The programme organises workshops and provides technical assistance to managers and workers of microenterprises, encouraging labour formalisation in places like the Gamarra market.
The training is based on the ILO’s SCORE (Sustaining Competitive and Responsible Enterprises) programme .
SCORE’s objective is to support companies in improving working conditions and increasing productivity through the implementation of sustainable business management systems, based on cooperation in the workplace.
“With greater productivity, micro and small enterprises can have a greater capacity to absorb the costs of formalisation”, said Hernán Zeballos, Coordinator of the SCORE Programme in Peru.
For Philippe Vanhuynegem, Director of the ILO Office for the Andean Countries, the transition from the informal to the formal economy is one of the ILO’s main lines of action in the region. “Formalisation strategies require a favourable and stable economic and political context.”
Accelerating a set of productive diversification policies to reduce productivity gaps between sectors and enterprises of different sizes is very important to address this problem,” he said.
Vanhuynegem emphasizes that combating informality is key to governments’ efforts to reduce inequality and social exclusion, contributing directly to achieving Sustainable Development Goal 8 on decent work and economic growth, of the United Nations 2030 Agenda .