Comment of the Week: The Economic Crisis is Not Necessarily Informal

This week's winning comment comes from Phillip Hafner in Portland. Phillip shares his thoughts on the informal economy based on his experiences with the informal sector in rural Jamaica. Phillip gets to choose between a $25 cash prize or a $25 donation made in his name to benefit a project of his choosing on Global Giving.

I visit friends in rural Jamaica every summer, and most of the individuals who make up the community in which I stay make their money through informal means. As mentioned in the post, this includes farming, child care, and transportation, to name a few. As I have found, and this is based on personal perception and may not represent the whole, there is a definite population of individuals in developing countries which stray from government contact, this including government sponsored jobs and aid. For my friends in Jamaica, and I assume for those who carry on in this manner in other developing countries, the state of the government’s well being does not necessarily reflect their own.

When considering the economic crisis, the situation remains the same. Small scale informal commerce will not suffer as much as large scale traditional commerce. This is to say, those selling fruit on the side of the road will generally stay in business while large corporations buckle under economic pressure. Still, when one looks at the whole, a decrease in economic growth will reduce spending. Yet, those not involved in traditional jobs will not be as affected. Moreover, as I am neither an advocate for or against the informal market, it is very interesting to see the subsistence informal trade and commerce is providing during the financial crisis.