Informal Economy and Quarantine, a Bad Match

Venezuelan analyst Wladimir Abreu examines the struggles an extended COVID-19 quarantine represents for informal workers, students, pensioners and minimum wage earners.


Statistics in Venezuela are always subject to some level of questioning, given that recent government policy makes a habit of concealing, distorting and handling data with very subjective criteria. However, one still has to try to work with what is available.

The country’s “voluntary quarantine” has been in effect for around two months. The effectiveness of the policy has been strongly questioned, not so much at the level of public health, but in terms of national and family economy in a society like ours, where much of the workforce labours outside the framework of formal and organised employment.

A remarkable number of citizens can be seen roaming the streets of Venezuela’s cities despite calls to “stay at home” and local policing of the quarantine. The sui generis fuel shortages, which one supposed would have turned into stockpile surpluses during the lockdown, are also not enough to keep people at home.

Why do these people defy the quarantine and risk their lives? What drives them to break the health authority’s recommendations and the government’s restrictions?

According to latest available data from the National Statistical Institute, Venezuela’s economically active population of 15-years-old and over, with availability and willingness to work, excluding students, housewives or pensioners, stood at 15,947,719 in the last quarter of 2018. The employment rate of people over 15 who claim to have waged or unwaged work was 93.2 percent.

Within the definition of “formal” employment, the government usually includes subcontracted workers, those on a scholarship, and collaborators of social missions, including [youth training program] Chamba Juvenil or [community medical program] Barrio Adentro. This is despite the fact that these workers lack a number of workplace rights such as social benefits, collective contract, work immobility, strike payments, bonuses or paid holidays.

According to official figures, 58.6 percent of the total workforce of 14,858,388 have “formal” jobs, while 41.4 percent work in the informal sector. This means that there are 6,144,125 people who work as street vendors, domestic workers, self-employed etc., who depend on their daily labour to survive. Equally, there are 1,089,331 unemployed, who surely seek survival in the informal economy. Although there is no official data, it is reasonable to assume that the worsening economic crisis has increased the informal sector since the end of 2018.

The services industry, which is comprised mainly of commerce, accounts for 42.1 percent of the country’s formal employment. This means there are an additional 3,665,470 workers who cannot afford to stop working for long.

We can see that Venezuela does not escape the Latin American employment reality, in which 53 percent of the economically active population works in the informal sector, according to CEPAL reports.

In Venezuela, there are a total of 7,233,456 people either informally employed or unemployed, not including students and pensioners who are also forced to search for income sources due to the crisis. This is the reserve industrial army, the unoccupied working class, which must survive by going out and searching for a livelihood every day, collecting the small crumbs they can obtain from some form of trade, under- or vulnerable employment.

If service workers are added to this figure, there are a total of 10,898,926 men and women who cannot “stay at home,” who find that the [government] bonuses or the [subsidised food] CLAP program is not enough to get by on, and must go out onto the street in order to survive.

The reality of wages in Venezuela is also alarming. The minimum wage of 400,000 bolivars equates to US $2.23, according to the Central Bank’s May 12 exchange rate. After adding the food bonus, which is not a legal part of salaries or pensions, the monthly minimum salary barely reaches US $4.47.

These figures equate to daily income levels of US $0.07 and US $0.15, respectively, which correspond to 18 and 8 times less than the UN’s limit for absolute poverty of US $1.25 a day.

It is not surprising, then, that the accumulation of multiple jobs has emerged as a recent, understudied, and now notorious phenomenon in the dynamics of Venezuela’s labour force. Of the 58.6 percent of the workforce labouring in the formal sector, many have been forced to seek a second or third job, or engage in informal activities to “make ends meet.”

Quarantine is the correct measure, it is not in our interest to refute that. However, the material impossibility of an effective quarantine, when at least 68.3 percent of the economically active population is obliged to go out to the streets to seek their daily bread, must also be considered. A quarantine policy that avoids stripping capital’s profits and surplus value can only lead to widespread hunger for the vast majority.

The bourgeoisie and its administrative gendarme, the state, seek to save their businesses in the midst of the lockdown. They do not care about the lives of the workers, which they consider only worth something when it comes to buying votes in the same way labour power is bought.

The only way the weight of this crisis is not shouldered by the Venezuelan working class is to make capital bear its burden.

Wladimir Abreu is a history teacher, a member of the Communist Party of Venezuela and a regular writer for outlets including Tribuna Popular.

The views expressed in this article are the author’s own and do not necessarily reflect those of the Venezuelanalysis editorial staff.

Translation by Paul Dobson for Venezuelanalysis.