The Creative Resilience of the Labor Force Labor Force Survey 2016-2017

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The Creative Resilience of the Labor Force Labor Force Survey 2016-2017

Introduction

In the last few years, the national economy has seen small movements in the growth. This is an indication of a stagnant economy. However, while the economy is stagnant, the unemployment rate on Curacao has been increasing. These two factors can cause the labor force to get more creative in terms of getting or increasing their (disposable) income.

There is a part of the labor market which is difficult to put on the cards, as they are not regulated by tax department or the labor department. When there are no job opportunities or a mismatch between demand and supply, people will still find a way to earn income. These are the people who will fall in the informal labor category, those that are underemployed or those who have multiple jobs.

People who are involved in the Informal market are those who have an enterprise or are working on their own but are not registered as a legal entity or who do not have a separate financial administration. These economic transactions are thus not registered under the tax system or are not entitled to labor benefits.

Underemployed people are employed but are not used to their full potential. This can be established as working in employment where your skills are not fully utilized or you are not working full-time. The major reason people are working multiple jobs is because of financial reasons. Most of the time, these extra jobs are under the radar and thus would fall in the informal labor market.  In 2016 and 2017, the local labor force has known some impactful events such as business closings and big lay-offs. Stagnancy in the economy, would indicate that the supply of labor would not be able to accommodate all these new entrants to the job seeking population. An increase in the informal market or underemployed would not be uncommon in these circumstances. Informal labor, although mostly off the books, is a major contributor to the national economy. It promotes entrepreneurship, creates employment, reduces crime and as an added value it keeps costs manageable.  “The informalization of the economy results in government revenue reduction, collapse of the formal sector and corruption; while identified benefits include creation of employment, as well as lower costs of commodities.” (Causes, Benefits and Costs of Informal Economy: Evidence from Zimbabwe (1980-2013) “Rose Constancia Sakuhuni”)

This article looks at those who are involved in informal labor or are underemployed as an indication of resilience of the labor force population of Curaçao.

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