Briefly discuss the problems associated with informal sector.

Question

Accepted Answer

Problems associated with informal sector:

1. Low wages: Informal workers earn significantly less than formal workers
2. No social security: No provident fund, pension, or health insurance
3. Job insecurity: Workers can be dismissed without compensation
4. Poor working conditions: Unsafe and unhealthy work environments
5. No legal protection: Labour laws do not apply to informal workers
6. Exploitation: Workers are subject to exploitation by employers
7. No trade unions: Workers cannot form unions to protect their interests
8. Market dependency: Employment depends on market conditions

These problems highlight the need for extending social security and labour protections to informal sector workers.