Informalisation of the organised sector
Also called: Informalisation of the formal sector · Topic: Employment, Unemployment and Informalisation · NCERT: Class 10, Ch 2 "Sectors of the Indian Economy"; Class 10, Ch 4 "Globalisation and the Indian Economy"
Meaning
Informalisation of the organised sector means that organised firms start behaving like unorganised ones. Some operate as unorganised units to evade taxes and labour laws. Others shift work to contractors, small units or homes. As a result, jobs inside the organised sector lose their security and benefits. Organised-sector jobs have been lost since the 1990s, and many of those workers moved to low-paid unorganised work.
Example
A large garment company stops hiring permanent tailors. Instead, it gives out stitching as piece-rate work to small workshops and to women working at home. It still sells the same output, but these workers get no PF, paid leave or job security.
Don't confuse with
- Casualisation: casualisation means workers shift into casual wage work. Informalisation is wider. Even a regular job can become informal if it loses its contract and social security.
Related concepts
- Casualisation of workforce
- Informalisation
- Contract labour
- Social discrimination in the labour market
- Informal employment
- Formal employment
- Formalisation of the economy
- Decent work