1.8 billion people, or more than half of the global labour force are working without a formal labour contract and social security. That number is projected to grow to two thirds of the workforce by 2020, assuming stable population trends and growth patterns, and could go higher if more jobs are lost to the economic crisis and more migrants return home to informal sector jobs....The numbers come from Is Informal Normal, a study by the Organisation for Economic Co-operation and Development, a Paris-based think tank on democracy and the market economy, and are summarized in an article in India's Economic Times newspaper.
Informal economic activity, excluding the agricultural sector, accounts for three-quarters of jobs in Sub-Saharan Africa, more than two-thirds in South and Southeast Asia, half in Latin America, the Middle East and North Africa, and nearly one-quarter in transition countries. If agriculture is included, the informal share of the economy in each region is even higher (e.g., more than 90% in South Asia).
The share of informal employment tends to increase during economic turmoil. For example, during the Argentine economic crisis (1999-2002), the country’s economy shrank by almost one-fifth, while the share of informal employment expanded from 48% to 52%.
The point: half the world is working informally. But, unlike the OECD, I don't blame informal businesses for this. For instance, we should stop heaping scorn on the informal economy for not having employment contracts and not offering social protections. Many so-called formal companies (WalMart, are you listening) don't either.
I anticipate I will blog more on this when I can get a copy of the report.