The economy grows. Informality also


Author: Fábio Campos

Source: The People Online, 20/11/2008

It is known that the urban organization of large cities is directly related to the level of informality in the economy. Traditional thinking points out that informality is directly proportional to the level of employment. In other words, the more the number of jobs increases, the less informality will be. Wrong. A study called “Underground Economy Index”, prepared by the Getúlio Vargas Foundation (FGV) and the Brazilian Institute of Ethics in Competition (Etco), released the day before yesterday, concluded that the expansion of the formal economy does not reduce the level of informality, known as “underground economy” ”. The exact opposite is true. In the first six months of 2008, it is estimated that the economy grew around 6%, while the informal economy grew close to 5%. Fernando de Holanda Barbosa Filho, researcher responsible for the work, explains that there is an interaction between the formal and the underground economy. "The increase in income in one sector encourages the purchase of goods and services in the other sector and vice versa". In other words, the increase in the level of employment with the acceleration of the economy does not stop the ever increasing number of street vendors on the streets, who occupy public spaces. See what happens in the Center of Fortaleza.