Perspectives on Business and Economics, Vol. 39, 2021 11 Introduction Poverty in Argentina has drastically increased due to a recession caused by an insurmountable amount of foreign debt that then was compounded by the COVID-19 pandemic. This poverty has had the most severe impact on informal workers. A Buenos Aires community kitchen (food bank) chef said, “most of the people who come to the community kitchen are informal workers.” Silvia Puntano, a mother of seven from Buenos Aires, goes from one community kitchen to another in search of meals for herself and her children. She receives some social benefits from the government; however, without a job or a livable wage, she lacks the resources to fill the basic human needs of her family (Lammertyn, 2020). The informal sector accounts for nearly one-third of the world’s labor force (World Bank, 2008), and it is largest in emerging economies. It is often explained as jobs that are “not subject to national labor legislation, income taxation, social protection or entitlement to certain employment benefits” (Bertranou, 2013). Conceptually, the sector is not a simple binary; many jobs and companies in the sector are neither completely informal nor completely formal but instead somewhere in-between. For example, a “construction unit may purchase materials legally (like nails and wood froma local distributor) but sell their final products illegally if they do not pay taxes on the sale” (Porembka, 2013). Argentina’s informal sector, defined as the percentage of the workforce not registered with the government, accounts for 50% of the total employment in the country (International Labour Organization [ILO], 2020). The formal sector pays substantially higher salaries while offering greater health and labor protections than does the informal sector. Although the informal sector is not ideal, it does provide many families with a livable salary to buy food and housing. Thus, as policymakers consider ways to formalize more of the Argentinian economy and jobs, it THE INFORMAL SECTOR IN ARGENTINA: ITS ROLE IN MITIGATING EXTREME POVERTY Abbhi Sekar Argentina has one of the largest informal sectors in South America and the world. Many of the residents in poverty work in the informal sector and struggle to make ends meet. The government has hardly scratched the surface of combating this problem. This article explores possible solutions to transitioning informal workers to the formal sector as well as some of the benefits of the informal sector regarding limiting extreme poverty.
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