I was quite amazed by the amount of people who make a living in the informal economy south of the border. Quite simply, in this type of economy people make a living in a way that is neither taxed nor monitored by any agency or arm of the government. With a whole lot of motivation, and just a bit of hubris, one can tip the market their way a wee bit. Street vendors, curb-side car washers, buskers, shoe-shiners and others all apply their trade for cash-in-hand payment; the market is totally yours to grab hold of.
In this informal economy, participants conduct business in public places while being able to move about from location to location as needed, or claiming a territory that suits their needs. I sense there must be some unspoken code among people who make their living in this manner, but to me it seems like anything goes and there are no rules: We once saw a man walking about a neighborhood selling individual garbage bags right off the roll.
The use of the word “economy” can be quite broad in scope; it can be used to blame, promise, deny, plan or invest. However, at it’s very root, the economy is a simple thing that almost every person in this world relies upon, and an economy would seem identical anywhere you go, and pretty much interchangeable no matter where you are from; earn money in order to spend it, so you can earn it and spend it some more. That is how the economy works in it’s most simple form.
That economy, depending on where one is, may be growing or stale. Perhaps it is stable or ready to collapse, but almost everyone on the face of the earth would recognize this simple formula and how it works: Make it and spend it.
How we make that money – formally or not – is where any major difference is to be seen. Most of us may rely upon a standardized way of earning our keep by working a “real job”, but there is a large part of the world south of the border that absolutely depends upon the informal economy to get by; these are your balloon vendors, hawkers, buskers, shoe-shiners, etc. They are the ones working their trade freestyle, so to speak. This way of earning is absolutely crucial for many in a very large part of the world.
Of course, money made within the informal economy is not reflected in GDP or in unemployment rates, but imagine my surprise when I read that Mexico has an unemployment rate significantly lower than the U.S. regardless of the amount of Mexican citizens working in their home country within the informal economy. In fact, I was equally surprised to see a palpable lack of empty storefronts in Mexico and beyond. There may be, say, 3 or 4 shoe shops within sight of one another, but someone owns these shops, and someone is buying all those shoes. So, everyone has the ability, need and desire to earn and spend in the formal or informal economy. Sadly it is often not enough, as we know.
There seems no age limit when it comes to earning, and society is quite tolerant to the idea; earning a bit of money can take precedent over other things, such as education. Restaurant staff will turn a blind eye to kids soliciting diners with offers of cheap sunglasses and feather dusters, or whatever they may be selling. Often times those vendors make a killing by selling to the locals! This is something that is to be expected in certain parts of the world, and the people are fine with it and I believe the consumer even relies on it, as I will explain later.
In the evening, many corners become home to makeshift braziers, or charcoal grills where all sorts of yummy items are served to customers hanging around. The enterprising people who set up these grills have the total freedom to conduct trade on their terms, free of any oversight. The consumer is just as free to eat what is on offer, or not. What an efficient way to go about it!
No doubt, these dealings go on in more regulated economies as well, although on a clandestine scale. You may have a vision of some shady individual whose jacket is lined with gaudy gold watches, who suddenly bolts off as soon as the police are in sight! Those watches may be stolen or fake in this example, but that is beside the point; it is illegal no matter how genuine those watches are. Selling goods on the street corner without a permit and a firm grasp of how the formal economy works may not be the biggest crime, but you must admit it is unheard of and quite frowned upon in a certain swathe of the world. Perhaps you have participated within the informal economy yourself by buying from a garage sale, or throwing your own! Everyone involved is much more relaxed, and free, within the informal economy.
That freedom benefits the consumer in a big way; it is a total buyers market out there because of this system. The acceptance of haggling between buyer and seller and competition from other salespeople keeps prices low just due to the nature of this type of economy. The buyer and the seller ultimately walk away happy. Perhaps outside of my quaint example of a garage sale this is just me looking at the situation through glasses that are a bit too rose-hued. In this informal economy, the children are not going door to door selling something in order to raise money for school-related reasons; they are most likely set loose by a parent in an attempt to bring another source of funds coming in.
Is this whole thing right or wrong? Is there some paradox going on here that warrants debate? Maybe. Should anyone be concerned? Does anyone need to allocate a bit of outrage over all this? I would firmly say “No”. Even though you may be unsettled by the thoughts of food being cooked up in an old wheel, or chagrined to observe children shining shoes and selling goods to passers-by, it is a totally viable means to an end that is absolutely necessary to those involved, and successful as well.