Informality explodes among micros


By Irany Teresa, O Estado de S. Paulo - 20/05/2005

The informal labor market grew at a rate twice that of the entire Brazilian labor market. While the total employed population increased 4% from 1997 to 2003, the number of workers in informal companies, in the same period, grew 8%, from 12,9 million to 13,9 million. Most of them (31%) claim to have been pushed into informality due to the lack of vacancies in the formal market and the majority do not regularize the business today because of the high cost of taxes and bureaucracy.

Angela Filgueiras Jorge, who coordinated the Urban Informal Economy survey, released yesterday by the Brazilian Institute of Geography and Statistics (IBGE), points out that, of the 10,525 million micro-enterprises identified, 98% (10,335 million) fit the concept of informality. Of these, 7,6 million had no legal record whatsoever. Only 2,5% (about 200 million) tried to regularize the activity. “They gave up because of bureaucracy and costs. But the worst thing is that 7,4 million did not even try ”, adds the coordinator of the study.

The figures of the IBGE survey reveal only part of the Brazilian informality. According to the estimates of the Institute for Applied Economic Research (Ipea), an official body also linked to the Ministry of Planning, the number of workers on the margins of legality has already reached 36,3 million people, according to the 2003 data. autonomous urban or rural or without a formal contract.

The IBGE survey, carried out in partnership with the Brazilian Micro and Small Business Support Service (Sebrae), covers only the urban work of self-employed and micro-enterprises (with up to five employees), but does not take into account other notable aspects of the labor force. informal work, such as that of domestic employees, workers without a formal contract in formal companies and rural activities. It is a research mainly focused on the search for solutions for the regularization of informal companies.


“They will only be able to regularize if the incentive comes from the financial side. The current reality is very cowardly: high cost, high taxes and an unbelievable bureaucracy for legalization. I will only go back to formality if I have to, ”says Angelo Santana Garcia, who today perfectly translates the portrait of the informal market, which he joined 15 years ago. At 49, he is a kind of handyman. He transformed his home garage, in the Tijuca neighborhood, in Rio, into a mix of ateliers, where he assembles mobiles, and an improvised beauty salon. He already had a small stamping, regularized, and was a partner in a chain of beauty salons, also legalized, but he says he was hit by economic plans.

The IBGE survey reveals that, in 38% of the cases, microentrepreneurs intended to expand the business, regardless of their activity. Construction and transportation companies were the exception, who hoped to continue at the same level. There is a contingent of owners (16%) who plan to abandon informality and look for a job, but this percentage is still considered very marginal by experts.

Angela agrees with the relationship presented by Sebrae that, currently, for each formal company in the country, there are two informal ones, but considers it simplistic to associate the escalation of informality with the increase in the unemployment rate. “It is certain that a third of the workers in this sector give a lack of jobs as a reason for entering the formal market. But they are staying in the market for ten years or more, which can no longer be attributed to unemployment ”, he says.