7.2. Impact of Globalization on Informal sector

Informal sector includes the large amalgam of men and women, who eke out a living unprotected by a regular salary and job security. This includes the large and amorphous category called the self-employed, daily wage laborers, as also those who are salaried employees but do not have job security, wage revisions and other benefits.

♤ Globalization often leads to shifts from secure self-employment to more precarious self- employment, as producers and traders lose their market niche.

♤ Globalization tends to benefit large companies which can move quickly and easily across borders but posses disadvantage to labour, especially lower-skilled workers that cannot migrate easily or at all. This puts a pressure on low skilled workers and petty producers by weakening their bargaining power and subjecting them to enhanced competition.

♤ Lack of opportunities in the formal sector due to lack of skill/education and slow pace of job creation in the country push people to informal sector.

♤ As more and more men enter the informal economy, women tend to be pushed to the lowest income end of the informal economy.

♤ Thus, globalization of the economy tends to reinforce the links between poverty, informality, and gender.

♤ But globalization can also lead to new opportunities for those who work in the informal economy in the form of new jobs for wageworkers or new markets for the self-employed.

♤ There has been a radical restructuring of production and distribution in many key industries characterized by outsourcing or subcontracting through global commodity chains. The net result is that more and more workers are being paid very low wages and many of them have to absorb the non-wage costs of production

However, a collaborative effort on the part of grassroots organizations of those who work in the informal economy with sympathetic representatives of non-governmental, research, government, private sector, and international development organizations is needed to enable the most vulnerable segments of society to seize these opportunities.