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Black work/Higher informality among low-wage workers

2024-01-31 07:56:00, Sociale CNA

Black work/Higher informality among low-wage workers

Informality in the Albanian labor market is widespread, but most of it is concentrated among employees with low wages, while 20% of the phenomenon is dominated by those who receive high wages, - notes a research by the OECD (Organization for Cooperation and Economic Development).

Despite commitments from countries, progress towards sustainable formalization is slow and informal employment is high.

Since most informal workers receive low wages, this can become a cause of national, regional and global crises, such as The OECD estimates that currently nearly 2 billion workers across the board are informally employed and account for 60% of total employment, and most of them are low-wage.

(OECD has defined low wages as up to 50% of the average wage level, average wages as between 50% of the average and 150% of the average; and high wages as over 150% of the average wage).

In Albania, informality in the labor market is concentrated 60% in low wages, 20 percent in average wages and 20 percent in high wages.

Informality in the labor market, in addition to creating fiscal and economic costs, becomes the cause of long-term social problems. This category does not benefit from the social and health insurance systems and risks inheriting undeclared work and generally outside the legal system to its children.

This large category of undeclared workers bears two major burdens, the lack of legal rights and low wages, notes the OECD.

Informality in high wages is concentrated on workers who are very productive (perhaps due to higher skills) and who have a lot of income with the intention of not declaring a part of it for tax purposes.

While informal workers with low wages usually have elementary knowledge and work in sectors that do not need skills, but labor.

Approximately 45.0% of informal workers globally have only primary education or less, while this figure is only 7.0% for formal workers./ Monitor Magazine

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