Informality and Lack of Education: Two Outstanding Tragedies

There are currently 150 million people in the region working in the informal market who do not have access to basic labor rights such as retirement, health insurance, and maternity leave, nor do they have access to unemployment insurance. Informality is a major multicausal problem that is also highly heterogeneous. This is why the transition to the formal economy poses a great challenge.

In Latin America, unregistered activities are an important source of employment for millions of people. According to the latest data from the International Labor Organization, 9 out of 14 countries analyzed were above 50% of informality during 2019. Among the countries with a significant informal economy are Bolivia (85%), Guatemala (80%), El Salvador (70%), and Paraguay (69%).

This tragedy that strikes our region has exacerbated during the COVID-19 pandemic. Not only has the outbreak of the pandemic accelerated technological development in all areas of our lives, but it has also increased existing inequalities.

For this reason, it is urgent to include the debate on quality employment in the public policy agenda in Latin America. An issue that has been little debated, with almost no evidence about it, and which seems to not exist in some dalready existed in most developed countries. There is, however, little debate about work today, about the reality of so many Latin Americans without quality jobs and where technology, far from affording an opportunity, aggravates their situation.

Informality is oftentimes associated with lack of training. While education does not guarantee access to formal employment, it is an essential condition. Developing skills and capacities is a key factor for the transition to the formal economy, as these skills and capacities improve people’s competences and, therefore, their employability.

As of the onset of the pandemic, the secondary education completion rate in Latin America was approximately 60%. This means that, for every 100 children that started first grade, 40 did not complete secondary education. The combination of low schooling levels in some countries and a limited educational offer leads to a sizeable portion of the population being able to access only low-skilled jobs with greater potential for automation.

This fact affects not only jobs that students can access and their opportunities for professional growth, but also a country’s productivity and therefore its economic development. My recent book Sin trabajo: el empleo en América Latina entre la pobreza, la educación, el cambio tecnológico y la pandemia [No work: employment in Latin America in the context of poverty, education, technological change, and the pandemic] focuses on that. In this work, based on an education-centered approach, I try to reflect on the upcoming society and the opportunities that we have to create for the half of Latin Americans lacking formal, quality jobs today.

Discussing education must be synonymous with discussing work. If education does not contribute to this dimension that dignifies people, it is only an illusion. Oftentimes, it seems politically incorrect to say that school prepares students for the world of work. School, however, besides teaching values, citizenship, and socialization, must build capacities and skills for employment.

In education, we usually do not consider employment as an educator. And it seems that analysts and experts in the sector do not see it that way either. We talk about cognitive and non-cognitive abilities being acquired in educational institutions, schools, universities, academies, or professional training centers, but often we fail to mention that they are also acquired by working. We learn a lot when we work, regardless of the job. We learn about the job itself and about how to work and interact with other people, how to achieve goals, evaluate and be evaluated, persuade and be persuaded. Employment is a great generator of education and, in many cases, it does that better than educational institutions.

This is why I believe that, in light of the challenge of informality, all actors should play a role. The State has to guarantee the conditions for the private sector, the biggest job creator, to do it. And education is, of course, the key for this to happen.iscussions. There are plenty of publications and research on how technology is impacting the new professions and how the pandemic is transforming entire sectors by incorporating a more hybrid, remote, flexible way of working, which

Gabriel Sánchez Zinny,

former minister of education of the province of Buenos Aires and director at Blue Star Strategies, Washington D.C.

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