103rd International Labour Conference

ILO moves the discussion on the informal economy one step forward

The International Labour Conference completed a first overview of a reality that impacts 40 per cent of the global workforce.

Press release | 12 June 2014
GENEVA – Delegates to this year’s International Labour Conference (ILC) have concluded that the informal economy represents a major challenge to the world of work and have agreed to hold a second discussion next year with the aim of adopting a Recommendation.

The first discussion that took place at this year’s ILC made it possible to come up with a first overview of the vast and complex reality of informal work that is severely impacting progress on decent work worldwide. It is estimated that 40 per cent of the global workforce works in the informal economy.

The conclusions adopted by the Conference say that the informal economy is a major challenge for workers’ rights, including access to fundamental principles and rights at work, social protection and decent working conditions, including development and the rule of law.

They also point out that the informal economy has a negative impact on the development of sustainable enterprises, fair competition and government revenues.

The ILC stressed that most people enter the informal economy not by choice, but as a consequence of a lack of opportunities in the formal economy. Some workers and economic units in the informal economy can have a large entrepreneurial potential if transition to the formal economy is facilitated.

The conclusions also call for ILO Member states to take urgent and appropriate measures to enable the transition from the informal to the formal economy, recognizing both the large diversity of the informal economy and different national contexts.

A definition of “informal economy”

The ILC also indicated that the term ‘informal economy’ “refers to all economic activities by workers and economic units that are – in law or in practice – not covered or insufficiently covered by formal arrangements and informal work which can be carried out across all the sectors of the economy both in public and private spaces.”

“If significant progress towards the transition from the informal to the formal economy is not made, our efforts to achieve inclusive and sustainable development will never succeed,” said Virgil Seafield, Chairperson of the tripartite committee that drafted the conclusions and government representative from South Africa.

“We should continue to harness our efforts in order to recognize the realities of the lives of workers in the informal economy, secure decent working conditions and thus dignity and a better quality of life for all workers all over the world,” said Plamen Dimitrov, workers’ vice chairperson from Bulgaria.

“The best pathway to formalization for informal economy operators is business development measures that would make enterprises more viable. Our work has been testament to the strength of social dialogue in seeking resolutions to issues of contention,” added Alexander Frimpong, employer vice-chairperson from Ghana.

The 104th session of the International Labour Conference will meet in Geneva in May-June 2015.

For information please contact the ILO Department of Communication at newsroom@ilo.org or +4122/799-7912.