At ILO Employers Urge Steps to Reduce Informal Economy

USCIB’s Adam Greene (left) at the ILO meeting
USCIB’s Adam Greene (left) at the ILO meeting

At an International Labor Organization meeting earlier this month in Geneva, business representatives from around the world joined government and trade union officials in contributing perspectives on ways to reduce participation in the untaxed, unregulated “informal” economy.

Under the banner of the International Organization of Employers (IOE), part of USCIB’s global network, the business delegation stressed that a key factor contributing to the prevalence of informality is the cost of doing business in a country. Adam Greene, USCIB’s vice president for labor and corporate responsibility, took part and helped prepare the employers’ closing statement.

“Entrepreneurs and enterprises in the informal economy struggle to do business in a situation of legal uncertainty and insecurity, and are faced with numerous economic constraints,” stated Michael Chiam of the Malaysian Employers’ Federation. “They need the tools to buy and sell their products legally, to own property and commercial use of property, to enter into legal contracts, to establish a business identity, to raise capital, to sell shares, to legally export. In essence, to have the official recognition of their property and business ownership.”

According to Greene, the discussion is part of an effort expected to lead to an ILO recommendation on informality in 2015 that will serve as one of the key UN instruments on the issue. “It will, we hope, help push the UN’s effort to develop new Sustainable Development Goals in the right direction,” he said. “Informality can reflect a fundamental lack of effective governance, and good national governance will be critical to assure the success of the SDGs.”

Greene said that, from the employers’ perspective, the ILO has a key role to play in addressing the issue of informality, because promoting employment and sustainable enterprises, as well as fundamental principles and rights at work, are at the very heart of the ILO’s mission.

At the Geneva session, business representatives criticized the narrow focus of an ILO questionnaire on labor markets, which they said had led to unhelpful proposals for formalizing workers and upgrading workers’ rights, but not addressing issues surrounding business formation and entrepreneurship. A focus solely on labor rights, they argued, would actually serve as a disincentive to formalization. They said a wider range of measures should be taken into consideration, including promoting effective national institutions and administration, implementing judicial reform, and easing business registration and licensing.

Staff contact: Adam Greene

More on USCIB’s Labor and Employment Policy Committee

Staff Contact:   Ewa Staworzynska

Director, Corporate Responsibility and Labor Affairs
Tel: 212.703.5056

Ewa Staworzynska is USCIB’s Director of Corporate Responsibility and Labor Affairs. Staworzynska brings to USCIB her extensive policy experience from both public and private sectors. Prior to joining USCIB, she led DoorDash’s policy efforts in international markets and was in charge of diplomatic relations. Before her position at DoorDash, Staworzynska was an officer at the International Labor Organization (ILO), where she worked multilaterally to advance support for decent work and related policies at UN headquarters. Staworzynska began her career in New York working for a real estate start-up. Staworzynska will be based in USCIB’s New York office and will work with Jose Arroyo, USCIB policy associate on corporate responsibility and labor affairs, on a wide range of issues, including human rights and industrial policy, responsible business conduct, and the UN Sustainable Development Goals (SDGs). She was born and raised in Norway and has a B.A. in Economics and M.A. in International Relations, with a specialty in International Business, from New York University.
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