Informal Economy Employs 60% of Workers, Generates 25% of Mexico GDP Juan Carlos Cruz Vargas - Proceso
go to original December 30, 2014

A street vendor selling soft drinks pushes his tricycle while his son lies on it on a street near the Zocalo main square in Mexico City. (Reuters/Henry Romero)

The National Institute of Statistics and Geography (Inegi) revealed that for every hundred pesos generated in the economy in the past year, 25 came from the informal economy.

Although such resources represent only a third of what is produced in the formal economy, these 25 pesos are produced by 60% of Mexicans employed in the typical urban micro business, which isn't registered with the tax collection agency (informal sector employment), or simply by those who work in business entities in the formal sector, but where they don't have access to social security [pensions, health insurance] because they are employed as temporary workers.

According to Inegi, 11.3 of these 25 pesos generated in the informal economy may be attributed to unregistered household businesses devoted to the production of goods or services, while 13.5 may be attributed to other forms of informal employment. That is, all those jobs which don't fall under the protection of a legal or institutional framework (social security, benefits) despite being part of formal businesses.

Of the whole informal economy, the most wealth is produced in the commercial sector (33.2%), followed by the service sector, which in total represents 18.7% of generated wealth. In third place are industrial manufacturing activities (14.9%) followed by agricultural activities, where 12 of every 100 pesos is produced in the informal economy.

Transport, mail, and storage are in fifth place, making up 8.5% of incomes, while 6.7% of informal Gross Domestic Product (GDP) comes from governmental activities. Last place belongs to the construction sector with 5.8%.

Read the rest at Mexico Voices

Translated by Chris Brown

Mexico Voices is a blogging endeavor aimed at raising the awareness of U.S. citizens regarding the destructive impact of the U.S. economic policy and the War on Drugs on Mexico — on its people, their economic and physical security and their human rights, on the nation’s dysfunctional justice system, and on the rule of law and Mexico’s fragile democracy. Visit the website at MexicoVoices.blogspot.mx.

We invite you to add your charity or supporting organizations' news stories and coming events to PVAngels so we can share them with the world. Do it now!