Background and Relevance of the Issue
The International Labour Organization (ILO) has issued an urgent call to address the issue of informal employment, as data from Mexico’s National Institute of Statistics and Geography (Inegi) shows that for every 100 pesos of the country’s GDP, formal workers contribute 75 pesos while those in informal employment generate only 25 pesos.
Since the ILO’s 2015 recommendation on transitioning from informal to formal economies for decent work, there have been no significant advancements. The organization emphasizes that informality remains a complex, structural, and dynamic challenge affecting various work modalities across formal businesses, informal units, and households.
ILO’s Demands for Action
In the resolution discussed at the 113th International Labour Conference (ILC), the ILO urged preparing a plan of action focused on innovative approaches to tackle informality. This plan is expected for review by the Administrative Council in November 2025.
The document highlights that informality has persisted for a decade, with high and increasing rates in some countries, making it unacceptable.
Scope and Impact of Informal Employment
Currently, approximately six out of ten workers and eight out of ten businesses worldwide are part of the informal economy. While more prevalent in low- and middle-income countries, it exists globally, including high-income nations.
The ILO stresses that for most individuals and units, informal employment is not a choice but a consequence of limited opportunities in formal economies and the absence of alternative livelihoods.
Mexico’s Informal Employment Challenge
In Mexico, informal employment has not significantly decreased, with a current rate of 54.3%. This equates to nearly 32 million workers lacking social security.
According to Inegi data up to December 2024, formal workers contribute 75 out of every 100 pesos to the country’s GDP, while informal workers contribute only 25 pesos.
Key Questions and Answers
- What is the ILO’s urgent call about? The ILO has called for immediate action to address the issue of informal employment, which remains a significant challenge globally.
- Why is the ILO concerned about informal employment? Informality persists as a complex, structural, and dynamic problem affecting various work modalities across formal businesses, informal units, and households.
- What does the ILC resolution demand? The resolution calls for a plan of action focusing on innovative approaches to tackle informality, to be reviewed by the Administrative Council in November 2025.
- What are the current statistics on informal employment? Six out of ten workers and eight out of ten businesses worldwide are part of the informal economy. In Mexico, 54.3% of workers are in informal employment, totaling nearly 32 million.
- How does informality impact contributions to the GDP? Formal workers contribute 75 out of every 100 pesos to the country’s GDP, while informal workers contribute only 25 pesos.
