United Nations

International Labor Organization (ILO)

Topic 1: Addressing Informal Labor Markets and Precarious Employment

Committee: International Labor Organization (ILO)
Chairs: Jana Kriez, David Saad
Executive: Athanasios Stergiou
 I. Introduction

The International Labor Organization (ILO) has a crucial role in addressing labor-related
issues on a global scale. One of the paramount challenges faced by the ILO is the
presence of informal labor markets and precarious employment situations worldwide.
Informal labor markets often lack legal regulations, exposing workers to exploitation,
inadequate wages, and limited access to social security benefits. Precarious employment
exacerbates the vulnerability of workers, hindering sustainable economic growth and social
development. This background paper focuses on strategies to regulate and formalize
informal labor markets, ensuring legal protection, fair wages, and access to social security
benefits for workers. Furthermore, it explores mechanisms to enhance education and skill
development, facilitating the transition from informal to formal employment.

Definition of Key Terms

Addressing informal labor markets and precarious employment is crucial for promoting
decent work and improving the livelihoods of workers globally. Here are definitions of key
terms related to this topic within the context of the International Labor Organization (ILO):

1. Informal Labor Market:

The informal labor market refers to economic activities and employment relationships that
operate outside the realm of formal labor regulations, social security provisions, and legal
protections. Workers in the informal labor market often lack formal contracts, social benefits, job
security, and legal protections.

2. Precarious Employment:

Precarious employment encompasses work arrangements characterized by insecurity,

instability, and a lack of adequate employment protections. Workers in precarious employment
often face uncertain work hours, low wages, limited access to social benefits, and vulnerability
to dismissal without due process.

3. Decent Work:

Decent work, a central concept of the ILO, refers to employment that is productive,
provides fair wages, offers social protection, promotes social dialogue, and respects
fundamental labor rights. It encompasses conditions that allow individuals to lead a dignified life
and participate fully in society.

4. Formal Labor Market:

 The formal labor market includes legally recognized employment relationships, governed
by labor laws and regulations. Workers in the formal labor market typically have formal
contracts, access to social security, legal protections, and mechanisms for dispute resolution.

5. Labor Regulations:

Labor regulations are rules and laws established by governments or other relevant bodies
to govern employment relationships. These regulations encompass aspects such as minimum
wages, working hours, occupational health and safety, and employment rights.

6. Social Security:

Social Security includes a set of programs and measures aimed at providing financial
protection and support to individuals and their families during specific life events, such as
illness, unemployment, disability, or retirement.

7. Legal Protections:

Legal protections refer to laws and regulations that safeguard the rights and interests of
workers, ensuring fair treatment, non-discrimination, and adherence to labor standards in the
workplace.

8. Social Dialogue:

Social dialogue involves negotiations and discussions between employers, workers, and
government representatives to reach agreements on labor-related issues, such as employment
conditions, wages, and labor policies, fostering collaboration and collective decision-making.

9. Labor Rights:

Labor rights encompass fundamental rights and principles related to employment,

including the right to fair wages, safe working conditions, freedom of association, collective
bargaining, and protection against discrimination and exploitation.

10. Vulnerable Workers:

Vulnerable workers are individuals who are more susceptible to exploitation,

discrimination, and adverse working conditions due to various factors, such as low skills, lack of
education, poverty, or social exclusion.

11. Unprotected Workers:

 Unprotected workers are individuals who lack legal and social protections in their
employment, leaving them exposed to potential abuse, exploitation, and unfair treatment by
employers.

Background Information

The International Labor Organization (ILO) is a specialized agency of the United Nations
that deals with issues related to labor and employment. Its mission is to promote social
justice and internationally recognized human and labor rights. The ILO sets international
labor standards and provides technical assistance to help countries implement these
standards and improve labor and employment conditions globally.

Addressing informal labor markets and precarious employment is a significant challenge

for the ILO. Informal labor markets refer to employment that is not regulated or protected by
the government, often characterized by a lack of social protection, low wages, poor working
conditions, and limited access to rights such as healthcare and pensions. Precarious
employment refers to employment that is uncertain, unstable, and lacks job security, often
involving part-time work, temporary contracts, or gig work.

The ILO recognizes the importance of addressing informal labor markets and precarious
employment to achieve decent work for all, as outlined in its Decent Work Agenda. The
Decent Work Agenda encompasses four main pillars: employment creation, social
protection, workers' rights, and social dialogue. Addressing informal and precarious
employment falls within these pillars.

Major Countries and Organizations Involved

The International Labor Organization (ILO) is a specialized agency of the United

Nations that focuses on promoting social justice and fair labor practices internationally. It
plays a critical role in addressing informal labor markets and precarious employment
globally. Here are major countries and organizations involved in addressing these issues in
collaboration with the ILO:

1. United Nations (UN):

The United Nations as a whole, through various agencies and bodies, collaborates with
the ILO to address informal labor markets and precarious employment. The UN provides a
broader framework and support for the ILO's initiatives in this regard.
2. World Bank:

The World Bank, a global financial institution that provides loans and grants to the
governments of low and middle-income countries for the purpose of pursuing capital
projects, is often involved in projects related to labor markets and employment, including
addressing informality and precarity. They collaborate with the ILO to develop policies and
programs that improve labor conditions.

3. International Monetary Fund (IMF):

The IMF, another global financial organization, often collaborates with the ILO in
addressing labor market issues, including the informal sector. They work on policy
recommendations and reforms that promote decent work and address the challenges
associated with informal labor markets.

4. European Union (EU):

The European Union, through its various institutions and agencies, partners with the ILO
to address informal labor markets and precarious employment, especially within its member
states. The EU supports initiatives and policies that aim to improve labor conditions and
formalize informal work.

5. United States Department of Labor (USDOL):

The USDOL collaborates with the ILO on international labor issues, including addressing
informal labor markets and precarious employment. They often provide financial support
and expertise to joint projects aimed at improving labor standards and promoting decent
work globally.

6. National Governments:

Many national governments collaborate with the ILO to address informal labor markets
and precarious employment within their own countries. They work with the ILO to develop
and implement policies that formalize the informal sector, protect workers' rights, and
improve working conditions.

7. NGOs and Civil Society Organizations:

Numerous non-governmental organizations (NGOs) and civil society organizations work

in collaboration with the ILO to address informal labor markets and precarious employment
at the grassroots level. They play a vital role in advocacy, awareness-raising, and
implementing projects aimed at improving the conditions of informal workers.
These organizations and countries, in collaboration with the International Labor
Organization, contribute to global efforts to reduce informal labor markets and precarious
employment, aiming for a more inclusive and fair labor market.

Timeline of Events

Date Description of Event

1919-1920 Formation of the ILO

1944 Declaration of Philadelphia

1972 ILO Declaration on Fundamental Principles

and Rights at Work

2002 ILO Global Report on Forced Labor

2008 ILO Declaration on Social Justice for a Fair

Globalization

2015 Adoption of Sustainable Development

Goals (SDGs)

2016 ILO's Future of Work Initiative

2019 ILO Centenary Declaration for the Future of

Work

2020 COVID-19 and its Impact on the Labor

Market

2021 ILO's 'World Employment and Social

Outlook: Trends 2021' Report

2021 ILO Centenary Global Tour

 2023 ILO Initiatives and Future Projections

Possible Solutions

1. Promote Formalization and Legalization:

Encourage governments to implement policies that facilitate the formalization of informal

businesses. This could include simplifying registration processes, reducing taxes for small
businesses, and providing incentives for transition to formal employment.

2. Awareness and Education Campaigns:

Launch public awareness campaigns to educate both employers and workers about the
benefits of formal employment. Highlight the legal protections, social security, and other
advantages associated with moving from the informal to the formal sector.

3. Capacity Building and Skill Development:

Enhance skill development programs to improve the employability and productivity of

informal workers. Provide training and support to upgrade their skills, making them more
competitive in the formal job market.

4. Social Protection Measures:

Advocate for policies that extend social protection coverage to informal workers. These
measures could include affordable healthcare, pensions, and unemployment benefits,
ensuring a safety net for vulnerable workers.

5. Labor Laws and Regulations:

Advocate for comprehensive labor laws and regulations that cover all workers,
irrespective of their employment status. This should include fair wages, working hours,
occupational health and safety standards, and mechanisms for resolving disputes.

6. Collaboration with Employers and Workers Organizations:

Collaborate with employers' and workers' organizations to raise awareness about the
advantages of formalization and create support systems for businesses transitioning from
the informal to the formal sector.
7. Microfinance and Access to Credit:

Facilitate access to microfinance and credit for informal sector enterprises, enabling them
to expand their operations, invest in growth, and move towards formalization.

8. Job Creation and Economic Diversification:

Advocate for policies that stimulate economic growth and diversification, creating more
formal job opportunities and reducing the prevalence of informal employment.

9. Data Collection and Research:

Invest in rigorous data collection and research to understand the dynamics of informal
labor markets better. This will inform evidence-based policy-making and help tailor
interventions to specific contexts.

10. International Cooperation:

Encourage international cooperation and collaboration among countries to share best

practices and learn from successful strategies in addressing informal labor markets and
precarious employment.

11. Engagement with Civil Society and NGOs:

Work closely with civil society organizations and non-governmental organizations

(NGOs) to reach out to informal workers, providing them with the necessary information,
support, and assistance in transitioning to formal employment.

12. Regular Monitoring and Evaluation:

Establish mechanisms for regular monitoring and evaluation of the impact of

implemented policies and interventions to ensure their effectiveness and make necessary
adjustments based on lessons learned.

Bibliography

International Labour Organization (ILO):

The official website of the ILO is a primary source for policies, reports, and publications
related to labor issues, including informal labor markets and precarious employment. Visit
the ILO website at (https://www.ilo.org).
 World Development:

World Development is a reputable academic journal that often publishes research articles
on labor economics, development, and policy, which may include discussions on informal
labor markets and precarious employment. Access this journal through academic
databases.

Journal of Labor Economics:

This academic journal covers a range of labor-related topics, including employment

dynamics and labor market policies. It may have articles on informal labor markets and
related issues.

World Bank:

The World Bank regularly publishes reports and working papers on economic
development, labor markets, and social issues. Their publications can be accessed on their
official website at (https://www.worldbank.org).

International Monetary Fund (IMF):

The IMF often publishes research and working papers on labor markets, employment,
and related economic topics. Their research can be found on their official website at
(https://www.imf.org).

European Labour Association (ELA):

The ELA is an official sector of the EU that deals with financial matters and clearly states
the EU’s approach to and views on labour issues in a variety of documents and official
statements.

(https://www.ela.europa.eu/en)