20 Examples of Informal Economy

It is called informal economy or irregular to those commercial or mercantile activities not declared, that is to say, hidden from the fiscal regulations and administrative controls. Together with illegal commercial activities, they constitute the so-called underground economy. For instance: begging, divination, piracy, crafts.

The informal economy represents a problem factor for the fiscal health of nations, not only because of the tax loss, that is, because of what the treasury no longer receives, but because of the unfair competition and the lack of social and retirement compensation that it entails in the long run.

Between the common causes Among the informal economy are migration, high unemployment rates, economic hardship and low formal wages.

Examples of informal economy

  1. Peddling. It is known by that name to the informal sale of articles of all kinds: groceries, manufactured or semi-finished, without having any method of invoicing or fiscal control, or establishment conditions (rent, salary, etc.). These types of sales are usually governed by supply and demand, if not by the laws of the black market, and are difficult to regulate given their semi-clandestine nature.
  2. Begging. Although it is difficult to consider it an economic activity, it is part of the commercial flows that take place in the city, totally outside of what is accounted for or any system of regulations.
  3. Divination. The reading of tarot cards, spiritism, divination by different mystical or ritual practices, are also a form of economic activity outside of any fiscal regulation of the State.
  4. The shows to the cap. Informal economy spectacular, musical or circus forms are often produced in means of transport, traffic lights or public squares, as a way to captivate the passerby and ask for their monetary help.
  5. Piracy. In the age of the technological facilities of the Internet and music or video players, there are many who profit from the sale of illegally reproduced films, music or even books, taking advantage of the trends in vogue and without any kind of remuneration for them. authors of the pirated material.
  6. Prostitution. Although some countries have tried to legalize this trade and establish a certain regulatory framework, the vast majority of it is exercised free of all kinds of controls and clandestinely, if not illegally.
  7. Domestic help. They are generally carried out through verbal agreements and daily cash payment, without this work incurring any form of social protection, payment of taxes or state regulation.
  8. Handicraft. These manufactured products are sold behind the backs of state regulations, since their producer makes them without incurring but his personal or ancestral techniques.
  9. Informal cultural or educational activities. Such as literary workshops, home teaching courses and all kinds of educational exercise that is not registered with any institution or subject to any type of taxation.
  10. Popular Reseller Markets. Generally thought from the retail profit of the wholesale merchandise, they usually take place in public spaces, with or without the permission of the local authorities, and mobilize significant sums of undeclared capital, although it is possible that as a collective make some type of payment for renting the space or similar items, also informal.
  11. The itinerant fruit bowls. Usually equipped with a truck in which to transport the stationary fruit, they carry out informal sales tours through the heart of the cities, without resorting to the formal economy system at all.
  12. The masseurs. Located mainly in beach or thermal areas, they offer passersby a few minutes of relaxation from a back or neck massage or some more or less studied chiropractic technique. Payment is immediate and in cash, just like the payment for the session.
  13. Sellers of undervalued goods. Especially real estate, to which the formal sale cost is reduced, that is, the one that appears in the minutes and legal documents, mobilizing the rest of the value of the property off the books.
  14. Subsistence planting. What happens when it is planted in small plots or urban land, in order to supply the family’s own demand and, eventually, sell the surplus to neighbors or acquaintances.
  15. Tips. Either as a complement to a formal service (such as waiters in restaurants) or as a reward for minimal work performed (such as bag packers in some supermarkets).
  16. Vehicle sitters. Or parking attendants, “biencuidaos”, “trados” and many other names, are people who expect a tip in exchange for the supposed surveillance of the vehicles parked in the street or the help to get out of difficult positions, and so on.
  17. The glass cleaners. Common in traffic lights, workshops and other urban contexts, they offer to clean drivers’ windshields in exchange for a tip.
  18. Tourist photographers. Common in areas with a high influx of tourists, they sell photographs as travel souvenirs.
  19. The managers. Responsible for expediting or carrying out bureaucratic procedures – often free – on request, in exchange for a stipulated payment.
  20. Other professional services in black. This is the name given to the provision of specific professional services of any nature, without incurring in billing of any kind, but rather the “free exercise of the profession” is considered.