“There are some public policy proposals to combat the ethical problem of labor informality in the city of Tacna”
May 23 , 2022

In the webinar “Análisis ético y propuesta en una región de mi país” ("Ethical analysis and proposal in a region of my country"), Rodrigo Arrázola, an Economics student at Universidad Pacífico, argued that better education and health on the part of the State will encourage the citizens of Tacna and the country to become more aware, individually and collectively, of the benefits of formality, and to bet on it.

The debate on labor informality in the country has focused mainly on how to make more companies formal, but little has been said about the role of individuals and how to encourage them to combat this cross-cutting problem in society. Rodrigo Arrázola, an Economics student at Universidad Pacífico, has made this reflection, taking the city of Tacna as a reference and approaching the issue as an "ethical problem". 

In the city of Tacna, around 68.4 % of the employed EAP is in the informal sector and is mostly made up of microenterprise operators and self-employed workers. In addition, the average monthly salary in the informal sector is S/901, much lower than the S /1902 in the formal sector. On top of that, there is a significant gender gap: there are more women in the informal sector (73.5%), but they earn less than men. This is the reality of the city of Tacna that Arrázola showed, based on INEI data for the year 2012. 

This means – our student highlighted - that most of the population of the city of Tacna works without receiving labor rights and social protection (health insurance and pension insurance), a situation that negatively impacts on their quality of life. But not only that: "this issue reflects a poor allocation of resources in the labor market and an inefficient use of state services, which could jeopardize the growth prospects of the city of Tacna". 

Arrázola compiled evidence that one of the causes of labor informality is the "burdensome regulations for formal companies", but also that "it is caused by the combination of poor public services". And precisely on this last point, he stopped to reflect on how to encourage people to move to formality: he is convinced that it is possible to do so by offering them better benefits, in addition to those provided by quality formal jobs, in such a way that the fact of paying taxes is justified. 

"I consider that there are some public policy proposals to combat the ethical problem of informality in the city of Tacna. An improvement in state-funded education or an improvement in the area's health sector could encourage the population to prefer to get involved in the formal sector". 

This also means becoming aware that formality has a positive impact on society. Arrázola aimed his analysis towards that purpose during his participation in the webinar “Análisis ético y propuesta en una región de mi país” ("Ethical analysis and proposal in a region of my country"), held on April 12 by Asesoría Religiosa UP within the framework of the 60th anniversary of Universidad del Pacífico. This event, attended by students from Ayacucho, Cusco, Huánuco, Ica, Piura, Tacna and San Martin, aimed to learn more about the different problems of Peru in order to propose other perspectives for solutions from the individual and group role. 

While it is true that the efforts of the State are vital to reverse labor informality, in the opinion of the Economics student, contributions can and should also be born from the personal aspect: "As Universidad del Pacífico students we have the social responsibility to promote this change from our environment and make others aware of the benefits of formality in the short and long term". 

Hence, it is pertinent to reflect, project and take action. “How would our environment improve if we were a more competent, conscious, compassionate and committed society?”. Answering this question, which motivated and guided the event, can be the beginning of change.


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