Informality in the Dominican economy and labor sector climbed to 58.6% in 2017, an increase of 1.2% in one year. The informal sector occupies 2,568,932 workers, according to the Central Bank in its Continuing National Survey of Work.
The informal sector was more prevalent among men than women with 61.9% of men working in that sector as of June 2017. Women in the informal sector constituted less than 54% of their number a decrease of slightly less than 1% year-to-year.
In May 2017, the World Bank presented the study “When Growth Is Not Enough: Explaining the Rigidity of Poverty in the Dominican Republic.” The study focused on how the DR stands out as a fast-growing economy with limited poverty reduction. The study also referred to the impact that the high percentage of informal work has on the little social upward mobility.
The World Bank notes in their research that the basic problem is informality itself with in which some small companies operate and are not even registered “because it is costly and very difficult.”
The World Bank noted that the high levels of informality leaves millions of workers outside the protection of the social security system and that not only are they affected, but also the state that is losing potential tax money.
Rafael (Pepe) Abreu, the long-time president of the National Confederation of Syndicate Unity and spokesman for labor in nationwide discussions, not only shares the idea that the increase in informality is in direct relation to the high cost of red tape faced by the micro and small businesses that choose to remain outside of the system. He suggested that the government open talks to consider possible solutions to this important issue.
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Diario Libre
World Bank study
20 December 2017
