Why is it in the news?

• Organization for Economic Co-operation and Development (OECD) has released the report ‘Breaking the Vicious Circles of Informal Employment and Low-Paying Work’
• The report delves into the enduring issue of persistent informal employment and the hurdles associated with transitioning out of this category.

Key findings of the Report

• Nearly 60% of the global workforce is engaged in informal employment. In low-income countries, this figure rises to 90%, highlighting the widespread prevalence of informal work.
• Informal workers’ vulnerability is often passed on to their children due to inadequate education, skills, and social protection policies.
• Lack of formalized work hampers the intergenerational improvement of socio-economic conditions.
• Workers in developing and emerging economies face a dual challenge of informality and low-paying work, creating a cycle of economic hardship.
• Breaking free from both aspects proves to be a significant challenge, hindering economic and social mobility.

India-Specific Observations:

• Over 90% of India’s workforce is engaged in informal employment, pointing to the pervasive nature of this issue.
• A strikingly high percentage, more than 96%, of workers aged 65 and older are involved in informal employment, emphasizing the enduring nature of informal work throughout a worker’s life.
• Strong gender- and caste-based segmentation persists in India’s labour market.
• Women, lower caste workers, individuals with less formal education, and rural workers are less likely to formalize their employment, exacerbating existing social disparities.

 Policy Recommendations

• Alleviate Double Burden: Suggested measures include implementing remuneration policies that address income inequality, establishing effective minimum wage standards, and enhancing the bargaining power of low-paid informal workers.
• Increase Formalization: Emphasis on ensuring comprehensive coverage by labour laws, social security measures, and tax regulations to incentivize and facilitate the transition to formal employment.