Informal jobs, a tough flight “to earn a little extra”
SANTO DOMINGO. It is a Sunday afternoon and Emilio Gomez, 69, is sitting in a plastic chair-old and broken-taking care of a table full of new and used shoes at the corner of Duarte and Paris. He is wearing a shirt with rolled up sleeves, long pants and sandals. In spite of the heat of the Caribbean Spring, for Emilio the afternoon is cool: while he takes part in the interview, nobody stops to look at his merchandise. At a quarter past three, blue plastic tarps cover the tables with the articles of many of the street sellers at the corner of Duarte and Paris streets in the National District, a sign that they have closed for the day. But Emilio is still there and all he has done is place some cardboard to protect his wares for the hot sun, while his tarps are on the ground, under a table made of made of pieces of scrap wood which serves as his display case.
Emilio likes the informal business because “the freedom has no price”, but he says that there are days when he sells very little or nothing of his offering of sports shoes and clogs because today there are more sellers on the sector of Duarte and Paris than before. He lives in the Mejoramiento Social sector and says that at 9:00 o’clock in the morning he is already in the area to sell his merchandise, and he stays until 6:30 or 7:00 p.m.
Since he was a young man-he relates-he has had this business. Up until eight or ten years ago even as he worked in a large store, but he always kept the business-it was attended by another person-in order “to earn a little extra” because he had a family that depended on him and his salary was not sufficient. Now a pension from Social Security of some RD$5,000 is not sufficient.
Like him, in the country there are 2,276,260 persons working in the informal sector, which represents 56.16% of the total employees, according to the Dominican Labor Market Observatory.
The study “Impact of the informal sector on the Dominican economy,” presented by the National Council of Private Enterprise (CONEP), explains that between 2000 and 2012 employment in the formal sector grew by 19.8%, while in the informal sector it grew by 41.5%.
Juan Francisco Gomez, Emilio’s brother, is what amounts to a door to door salesman since he left his job in a warehouse. He explains that the salary offers that he received then, some 20 years ago, were not sufficient. So, he started his “little informal business”: to buy from suppliers and resell to the people that need what he sells. He says that every eight or 15 days he earns around RD$10,000.
The problems of the country’s labor market are not caused only by the lack of work-the expanded unemployment rate for 2013 was 15.04%.
According to the International Monetary Fund (IMF), the low quality of the jobs “perhaps” gives few incentives for persons to accept jobs, unless the salaries are attractive.
In the study “Growth and jobs in the Dominican Republic”, the IMF says that the informal nature of the labor market is a sign of the low quality of the jobs and shows that the real hourly income of the salaried personnel of the private sector and of the self-employed workers has fallen about 27% in 2011, compared to 2000.
A 2013 report by the Network of Labor Market Observatories, on “The informal economy in Central America and the Dominican Republic” indicates that the lack of opportunities leads “to the need to generate self-employment” and that the informality is due to a failure of the market that cannot offer jobs to everyone nor the salaries that are demanded. And this leads to many persons to dedicate their energies to informal businesses and even prefer them to ones in the formal sector, where 33.21% have incomes between RD$5,000 and RD$10,000, and 34.95% earn between RD$10,000 and RD$20,000.
For CONEP, the current Labor Code “imposes elevated economic charges on businesses” and encourages informality, according to an article in its magazine “Conexo” in the March edition.
And while the proposal of the Dominican Business Confederation (Copardom) seeks to have limits on the workers’ rights, the president of the Industrial Business Association of Herrera (AEIH), Victor Castro, said he feels that in order to deal with informality they should change the economic model because-he says-the companies pay “a lot of taxes.”
Castro thinks that “they are out on a limb” those people who think that the reform would reduce the informality without touching the economic model, and he says that perhaps the Code is “the least influential aspect” of the problem.
Since the businessmen of the CONEP feel that the “economic burdens” on the companies promote the informality, they propose the increase of the probationary period from three to six months. They also want to limit the ceiling of severance pay, establish the possibilities of “reaching a mutual agreement for the termination of a pregnant worker”, and extend the eight hour work day to 12 hours for companies that operate 24 hours a day. The only conditions would be to pay overtime for anything past 48 hours a week.
Category: DR News |