UN: Guatemala's Informal Economy Stands at 70%

At least 70 percent of Guatemala's workforce is in the informal economy, meaning that the vast majority of citizens are working without social security or any kind of benefits, according to new figures released by the United Nations.

Guatemala's Representative to the U.N. Valerie Julliand made the announcement Tuesday, following the release of the organization's annual Human Development Index, which assesses the social development of countries worldwide.

According to the recent figures, seven out of 10 Guatemalans work in the informal market—a part of the economy that is neither taxed nor monitored by any form of government. This represents a “lack of protection, lack of stability and, in many cases, work that is not decent and where labor rights are violated,” said Julliand.

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The U.N. representative also highlighted the precarious work in the country such as child labor, forced labor and other violations of human rights that were not taken into account for the study. This suggests Guatemala's HDI ratings should actually be lower.

The HDI measures social development, taking into consideration three indicators: life expectancy, education and income per capita. According to the study, Guatemala ranked 128 out of the 188 countries analyzed with an HDI ranking of 0.62 (on a scale of 0 to 1, with 0 being the lowest and 1 being the highest).

Within the region, Guatemala falls behind Nicaragua, El Salvador and Costa Rica, and comes out ahead only of Honduras.

Julliand made special mention of the situation of women in Guatemala, where 93 percent of female workers are devoted to domestic work. This is generally part of the informal economy, where they have no social security, can claim no benefits and earn between US$66 and US$92 a month.

The U.N. representative also said that Guatemala must improve its minimum wage for those who are involved in the formal economy, saying the current minimum salary of US$326 (2,500 quetzales) a month is not enough to cover the basic consumer goods, which are valued as US$499 (3,800 quetzales).

Some organizations responded to these concerns Wednesday, with members of the Tripartite Minimum Wage Commission of Guatemala calling on the government to increase the country's minimum salary by the end of this year.

According to Prensa Latina, representatives from the Ministry of Labor hope to send a proposal to the National Wage Commission by the end of December to resolve the matter.

However, the government bodies did not seek to address the high numbers of people working in the informal economy.

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