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44% of Costa Ricans work in informal economy

Cartagena street scene

Photo for illustration purposes. (Photo credit: Wikipedia)

August 22nd, 2014 (InsideCostaRica.com) According to the National Institute of Statistics and Census (INEC), 44% of Costa Ricans worked in the informal economy in the fourth quarter of 2013, the latest data available.

 

The number is concerning, some warn, and has been growing since early 2012.

 

INEC considers informal work to include jobs where an employer does not pay social security (CCSS) on behalf of the employee, as well as those who work independently without contributing to CCSS – from fruit sellers to gardeners.

 

The International Labor Organization (ILO) describes the worldwide informal economy as concerning.

 

“Although it is hard to generalize concerning the quality of informal employment, it most often means poor employment conditions and is associated with increasing poverty. Some of the characteristic features of informal employment are lack of protection in the event of non-payment of wages, compulsory overtime or extra shifts, lay-offs without notice or compensation, unsafe working conditions and the absence of social benefits such as pensions, sick pay and health insurance. Women, migrants and other vulnerable groups of workers who are excluded from other opportunities have little choice but to take informal low-quality jobs,” ILO says.

 

 

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  • mhogan

    The concern of the government for the workers is bogus; it’s all about their piece of the pie (in this case, CAJA payments)

    • toolman78

      My thoughts exactly.

  • carlos

    How do you know they are Costa Ricans?

  • Ken Morris

    I question the slant of this story (which might well be the slant of the INEC too), which defines jobs in the informal economy in a way that includes those for which the EMPLOYER doesn’t pay into social security.

    Based upon my information, there is nothing informal about many of these jobs from the employees’ perspective. They are hired, given work schedules, take orders from supervisors, etc. just like a “formal” job, with the sole difference that their employers don’t pay the mandatory payroll taxes on their behalf. (In some instances, the employers deduct the employees’ portion of the tax and pocket it.) There’s not much “informal” about systematic business crime like this, as neither is it limited fruit sellers and mom and pop tiendas. I know of a chain store that operates this way.

    Not long ago La Nación reported that appoximately 40% of employees in CR hold jobs in which their employers violate the labor law, usually by failing to pay the social security tax though also by doing things like paying below the minimum wage, requiring overtime, not providing breaks, etc. To refer to these kinds of illegal and exploitative employment practices as the “informal economy” is to rename crime with a euphemism.

    Yes, there is a real informal economy in CR, but conflating it with illegal and exploitative business practices just confuses the issues. The one refers to usually poor people scrambling to make a buck without a job; the other to sometimes quite affluent businesspeople violating the labor law in a way that steals money from their own employees.