Informal Work in Developed Nations

Enrico Marcelli, Colin C. Williams, Pascale Joassart

• Publisher: Taylor & Francis
• Year: 2009
• Print ISBN: 9780415777797
• eBook ISBN: 9781135219956
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Almost everyone residing in a developed nation knows someone who has engaged in paid work that is licit but not reported to the government (e.g., babysitting, gardening, construction, financial consulting). But while most acknowledge that such work is helpful to the individuals involved, and that informal work may enhance a sense of community, most scholars view it as a pre-modern form of exchange and something that disappears as capitalist markets expand globally. Both mainstream and heterodox economics typically assume that there is an inevitable shift towards the formalization of goods and services provisioning as societies become more "advanced" or "developed" (the "formalization thesis"). In these views, the existence of informal activities is a manifestation of backwardness and it is assumed that they will disappear as an economy becomes more "modern."

This book challenges these conventional theses about the linear trajectory of informal work and economic development by arguing that informal work is not trivial for understanding modern capitalist economies, and that both mainstream and heterodox theories about the economy must be altered to address the role of informal work in relatively developed economies.

This edited collection focuses on informal work in various developed nations, including Canada, the United States, and several in Europe. It will therefore be of interest to policymakers, as well as students and researchers in development studies, social policy, sociology, anthropology, public health, geography, economics and planning.

Enrico Marcelli is Assistant Professor of Sociology at San Diego State University, USA. Colin C. Williams is Professor of Public Policy at the University of Sheffield, UK. Pascale Joassart is Assistant Professor of Geography at San Diego State University, USA.

Part I
Historical and methodological foundations

2
The changing conceptualizations of informal work in developed economies

Colin C. Williams

Introduction

The aim of this chapter is to chart how conceptualizations of work in the informal economy have shifted over time so as to help the reader situate the ways in which this volume advances knowledge. To do this, I commence by examining the literature on the variable magnitude of informal work (e.g., Feige, 1990; Fortin et al., 1996; Leonard, 1998; Renooy, 1990; Thomas, 1999; Williams and Windebank, 1994, 1995, 1998, 2001a). This will reveal how the earlier literature was dominated by two universal generalizations, namely the “modernization thesis” that viewed such work as slowly disappearing and the “marginality thesis” that depicted this work as concentrated among marginalized populations. In recent decades, however, it will be shown that there has been an accumulation of evidence to refute these generalizations. Indeed, in much of the recent literature, the opposite has been frequently argued. There has been a tendency to depict informal work as universally growing and always and everywhere concentrated in relatively affluent populations. In this chapter, however, there is revealed to be gradually emerging a growing appreciation that a fuller understanding will derive only from a more socially, culturally, and geographically embedded consideration of this sphere.

The second section of the chapter then turns to how conceptualizations of the nature of informal work have shifted over time. This will reveal that although the representation of informal work as a form of low-paid, exploitative, organized employment conducted for profit-motivated purposes on the part of both the supplier and employer (e.g., Castells and Portes, 1989; De Soto, 1989; Matthews, 1983; Sassen, 1989) has proven remarkably resistant to change, especially in the media and political discourse, this is slowly and steadily beginning to be deconstructed, at least in the academic literature. Just as there is a move away from universal generalizations concerning the extent of informal work, therefore, a similar process is starting to occur also with regard to the nature of such work. The ways in which it is being recognized that depicting informal work as a form of exploitative organized employment oversimplifies and obscures the heterogeneous contemporary character of informal work will be outlined along with those aspects of its character that have so far gone relatively unquestioned. In so doing, this chapter will highlight the specific ways in which this book takes forward understanding of the nature of informal work.

Conceptualizing the extent of informal work

Studies of informal work have addressed the issue of its magnitude in a number of ways. On the one hand, whether it is growing or declining over time has been investigated. On the other hand, how its magnitude varies either on a cross-national basis, regionally or locally, by socioeconomic group or by gender, has been considered. Here, each of these sets of literature is reviewed to unpack the changes in how informal work is conceptualized.

Conceptualizing changes over time in the size of the informal sphere

On the issue of whether it is growing or declining over time, two opposing perspectives can be identified, namely what I here call the modernization thesis that views informal work to be in long-term decline and the globalization thesis that asserts it to be growing. For adherents to the modernization thesis, there is seen to be a natural and inevitable shift toward the formalization of goods and services provision as societies become more “advanced.” All economies are considered to witness the same linear and unidimensional trajectory of economic development whereby informal work steadily disappears and is replaced by formal goods and services provision. To see the dominance of this conceptualization of economic development, one has only to consider how it lies at the heart of the view that different nations are at varying stages of economic development. The degree to which economies are formalized, that is to say, is frequently taken as the measuring rod used to define “third world” countries as “developing” and “first world” nations as “developed.” From the viewpoint of the modernization thesis, in consequence, the existence of supposedly traditional informal activities is taken as a manifestation of “backwardness,” and it is assumed that such practices will disappear with economic progress (modernization). In this conceptualization, informal work is primitive or traditional, stagnant, marginal, residual, weak, and about to be extinguished. It is a leftover of pre-capitalist formations, and the inexorable and inevitable march of modernization will eradicate such work. This view of informal work as some kind of traditional outdated type of work contract that is in long-term terminal decline and will vanish with the pursuance of modernization, however, has come under considerable criticism in recent years, not least owing to the recognition that in the contemporary era, it is growing rather than declining (Castells and Portes, 1989; International Labour Office, 2002; Sassen, 1997; Williams, 2002, 2004a).

Rather than depict informal work as some leftover or a “a mere ‘lag’ from traditional relationships of production” (Castells and Portes, 1989:13), an alternative conceptualization is that which reads informal work as a new form of advanced capitalism that is a direct product of the neo-liberal project of deregulation taking hold. This is argued both by neo-liberals who celebrate such a trend and by some heterodox economists opposed to the exploitation inherent in such a mode of production (e.g., Amin, 1996; Castells and Portes, 1989; International Labour Office, 2002; Sassen, 1997; Ybarra, 1989). The argument by both camps has been that the processes associated with economic globalization are causing an expansion of informal work. In this economic reading, economic globalization refers to a dangerous cocktail of deregulation and increasing global competition that produces an expansion of informal work (e.g., Castells and Portes; International Labour Office; Sassen, 1997). This form of employment is thus seen to have emerged as a new facet of contemporary capitalism. Particularly prevalent in the United States (but less so in Europe), this globalization thesis views such work to be especially prevalent in global cities and among immigrant/ethnic minority populations (e.g., Marie, 1999, 2000; Ross, 2001; Sassen, 1991, 1994a,b, 1996, 1997; Snyder, 2003; Sole, 1998; Waldinger and Lapp, 1993).

As will be shown throughout this volume, however, although replacing the modernization thesis with the globalization thesis moves toward a more accurate portrayal of the current state of affairs, great care needs to be taken. This is because first, it simply replaces one universal generalization of the direction of change with another and, second, it ascribes a universal logic to the processes supposedly under way. This is ultimately misleading. On the one hand, informal work is not always and everywhere growing. Locations can be identified where the size of the informal sphere is either remaining relatively static relative to the formal economy or is even declining (e.g., Williams, 2004a). On the other hand, there is growing evidence that the informal sphere is not everywhere solely a product of neo-liberal economic globalization. Indeed, beyond this economic narrative, more embedded understandings are emerging that argue that a fuller understanding will derive only from a socially, culturally, and geographically embedded consideration of this sphere (e.g., Renooy et al., 2004; Williams and Windebank, 1998). In this volume, in consequence, the intention is to show that once one starts unpacking the range of different processes taking place in various locations, it starts to become apparent that universal generalizations about the trajectory of development and its causes need to be replaced by more embedded understandings if a fuller comprehension is to be achieved.

Conceptualizing how its magnitude varies across populations

Measuring and explaining how the magnitude of informal work is changing over time, however, has not been the only focus when considering issues regarding the extent of such work. There has been, in addition, a large volume of literature examining how the size of the informal sphere varies across populations. Economists have explored the cross-national variations in its size (e.g., Feige, 1990, 1999; Fortin et al., 1996; Friedman et al., 2000; International Labour Office, 2002; Ott, 1999; Schneider, 2000, 2001; Thomas, 1999), geographers have analyzed the local and regional variations in its magnitude (e.g., Jensen et al., 1996; Renooy, 1990; Williams and Windebank, 1998), and...

Table of contents

• Routledge Advances in Heterodox Economics
• Contents
• Tables
• Figures
• Contributors
• Part I Historical and methodological foundations
• Part II Informal work in Europe
• Part III Informal work in North America
• Index