“Twenty years ago I was working at a hospital, but I had two little girls and nobody to leave them with. So I had to quit and because of my two kids, I couldn’t even find work as a domestic.”[1] Gloria Solorzano is one of the many women who was ‘forced’ into the informal sector of the Peruvian economy in order to provide the basic needs for her children due to the lack of ‘good’ social protection policies particularly with regards to childcare. It is acknowledged and statistically proven that worldwide women in the informal economy are overrepresented. Particularly, in Latin America the number of women that engage in informal activities does not stop growing. Indeed today, fifty-eight percent of the female work-force work in the informal sector.[2] This concept of “informal economy” has been debated among scholars since the 1970s and nowadays there are still different views with regards to causes and consequences of its development. Informality exists along different lines and dimensions: workers in the informal economy are not just those who have an informal (not registered) job, but also those who work outside the informal sector but still have no rights or benefits given by the administrative rule and do not hold, for instance, a labour contract.
The definition of informality is flexible and it accommodates countries’ situations and needs, especially when it comes to the collection of national statistics. Moreover, it is statistically proven that developing countries tend to have a predominant informality and relatively small modern formal sector. In fact, the estimation made by the International Labor Organization (ILO) is that 66% of the labour force in Latin America work under informal agreements.[5] Further, according to the World Bank data of 2007 one of the countries which has one of the highest incidence of the ‘shadow economy’ is Peru. Peru’s capital city Lima is one of the cities in the region which hosts one of the most vibrant grounds for the informal sector. Within the informal sector OLA Metropolitan Lima estimates that womens’ participation remains higher than men, and suggests that women tend to engage in informal economic activities at a really young age, between 15 and 24. years old. Although in the past decade the Peruvian economy presented steady growth and the rising of employment rates, there are no signs of women’s social mobility from the informal to the formal sector, particularly looking at urban Lima. On the contrary, the number of women entering the informal sector in Lima is growing steadily. Most of these women lack social protection and are vulnerable to the gendered assumptions some scholars argue that women in Lima are ‘forced’ into the informal sector due to the lack of good policies that can empower them in order to break with the paradigm of marianismo and develop social mobility.
While focusing on Latin America, there are two main reasons that drove and still drives people into the informal sector. The first reason, which is approached by Bairoch, concerns the ‘hyper-urbanization’ factor, that is to say the migration of rural population to the urban centers seeking for jobs. The difficulty was that the industries could not completely absorb the upcoming working force; furthermore, the informal sector became “the refuge of those who could not find access to modern employment.” The second reason was argued by the Peruvian economist H. De Soto, who stated that due to the extensive regulations, policies and legal barriers made by the state the informal sector tends to expand, creating a ‘mercantilist’ economic system. In the case of Peru, the growth of informality in the past decade was mainly driven by the second reason. In fact, even though in the past years the Peruvian economy has seen significant economic growth and the opportunity jobs increased, informality still grows especially in the metropolitan Lima, which is a vivid ground for this sector. In 2009 the capital city accounted that 53% of the working population was engaging in informal activities and among these workers two million did not have any social protection.
As argued by H. De Soto; the informal economy is the heart of the Peruvian economy, and it can be argued that the street vendors, including market traders, are at the heart of Lima’s informal economy. Street vendors engage in a range of different activities, either offering street services such as hairdressing, shoe repair and so on, or producing goods at home to sell them in public spaces. More than 210,000 street vendors have occupied the streets of the city center since recorded times of informality. Additionally, attention should be paid to the fact that 2/3 of these street vendors in Lima are women. In 2015, the estimation was that 68% of the street vendors were female working force, and most of them did not have any social protection. In fact, according to the WIEGO report of 2009 the majority of these women were facing what is called ‘tires of informality” that is: they work in the low productivity sector, consequently have very low incomes, they are not registered in the system, consequently do not have access to work-related health insurance, and to social security.
Although from 2004 to 2015 there has been an overall decrease in street vendors in Lima; when looking at the proportions of men and women workers in the activity, the number of female street vendors increased from 298,997 to 310,794 workers during these years. In the light of these data, it is clear that social mobility for these women seems to be stagnated and clearly, there is a key element that plays a role in the shape of this data that is the ‘gender role.’ The culture of ‘machismo’, which displays a gender hierarchy in which the man is seen as more ‘dominant’ and powerful, is really present in all aspects of Latin American society. On the other side of the coin there is the concept of ‘marianismo’, which portrays and gives to the women the ‘feminine’ role, passive, and morally engaged with the caring of the family. Machismo and marianismo are two concepts that are clearly reflecting in the economic system, especially with regards to informality because “the unequal burden of domestic responsibility limits women’s ability to participate fully in the economy.”
In fact, women in Peru spend an average of 40 hours a week on unpaid activities related to household issues. According to M. Maxine, throughout history social policies were never ‘gender-blind’, on the contrary, they “worked with this gendered conceptions of social needs, ones which were familial, patriarchal and paternalistic.” Indeed, the social policies implemented for women are fragile, inefficient and based on assumptions of female economic dependence on men. Moreover, these policies are completely blind to the fact that most of the time women face as care and income providers and they need a stronger social protection system. Henceforth, these women encounter internal pressure from the society to give priorities to household’s activities, due to the paradigms of machismo and marianismo rooted in the culture and also do not encounter assistance from the state in terms of protection or empowerment. In spite of this, the story of Gloria Solorzano is the reflection of how women can empower themselves within informality. She founded the Women’s Network, which organizes women who work as street vendors in Lima and help them in their economic social rights; this organization promotes solidarity and emphasizes gender equality and women’s economic independence.
According to H. De Soto said the government should provide a formal system of ‘good laws ‘which would promote economic efficiency “creating incentives for people to seize the economic opportunities offered by the country and facilitating the specialization of the individual.” Hand in hand with De Soto’s solution, should be added targeted policies for women such as promotion of work-life balance, developing linkages with organizations that already exist, such as the Women’s Network in Lima, invest in affordable childcare, provide a safe environment for children and mothers, financial literacy for access to more capital, efficient healthcare system and access to markets.
[1] Asencio Maritza, “Peru: Women Workers Forced into Informal Economy,” Inter Press Service News Agency, (2009)
[2] Maria Rein, “The Informal Economy and Women in Latin America,” Syracus University Honors Program Capstone Projects 297, (2011):13
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