The labor informality in Peru exceeds 76% of the economically active populationwhich is equivalent to around 13.1 million people in this situation. This figure reaches 78.4% in micro and small companies (mypes) that concentrate 36% of the employed EAP, according to the Minister of Labor and Employment Promotion, Fernando Varela.
The proportion is higher in micro-enterprises, those that have between 2 and 10 workers where informality reaches 88%. This is explained due to “the pandemic greatly affected micro-enterprises that did not have financial support to withstand the mandatory social isolation,” Varela commented in the Peru Capital Special Commission of Congress.
In the case of small companies (between 10 and 100 workers) the level of informality reaches 49%.
Factors behind labor informality
The head of the MTPE stresses that labor informality, mainly among young people in Peru, is driven by three factors. The first of these is that young people do not come out with an assisted technical preparation from schools. “Young people do not leave school prepared and when they apply for a technical career, many institutes are theoretical, and do not give a practical meaning to the career,” comment.
Likewise, as the second element that increases the informal workforce, Valera points to the irregular immigration process. “Many companies find it feasible to hire immigrant workers, which automatically displaces formal workers, mostly young people,” mentions. This is because this population “is not interested in taking up a formal job” because it seeks to obtain means to get out of its personal economic crisis. He adds that a third factor that reduced formality in the country was the COVID-19 pandemic.
Source: Larepublica
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