Saturday, September 30, 2023
Colonial Chickens come home to roost ; the question of the COLORLINE is the question of the 21st Century as WEB Dubois correctly predicted it would be the question of the 20th
Friday, September 29, 2023
Donald Trump crossed the picket line on Wednesday and spoke at a non-union auto plant called Drake Enterprises in Clinton Township – about 50 miles away from where striking union workers were on the picket line fighting for better wages. It was a sharp contrast to President Biden's appearance with United Auto Workers (UAW) members on the picket line on Tuesday. Biden was praised by UAW workers for his show of support for organized labor. As one individual on the picket line told reporters, "I don't remember any president coming to a picket line. Joe, before he was president, was coming to picket lines. He’s consistent. We have a lot of consistent folk at pointing out problems, he fixes them. I was very pleased to see him coming down the road."
Thursday, September 28, 2023
Republican Party is fascist
This Wednesday evening, at the second Republican presidential debate, all seven of Donald Trump’s competitors for the GOP nomination for the presidency could just as well have been talking to the nation from a perch somewhere on Earth 2. Not one of them even mentioned the piles of criminal indictments and the findings of fraud Trump is facing.
The best they could do was to criticize him for not showing up to debate with them. All of them agree with almost all of his fascistic policies anyway, so if he did show up one wonders what type of “debate” would happen.
On Earth 2 Trump’s crime is that he won’t get on the Fox News stage with them, not that he tried to overthrow the government and threatens to actually do it this time if he is elected.
Meanwhile, speaking from another location on Earth 2 last night, Trump, the notorious worker-hater, tried to get people to believe that he had the backs of the nation’s striking auto workers.
Also apparently operating from Earth 2, most of the major media covered last night’s events as if they were just part of the regular back-and-forth of political campaigns. The high stakes involved, whether democracy will survive in the United States, were of little apparent concern to most of the talking heads on cable television. The fact that the current strike by the UAW is a massive uprising of a key section of the nation’s multi-racial, multi-national working class was also totally lost on them. On Earth 2 Biden’s visit to the picket line is nothing more than a clever political maneuver. It is certainly not, as it is on Earth 1, the president joining a historic nationwide movement for economic justice.
It was Shawn Fain, president of the UAW, grounded as he is on Earth 1. who pointed out the “pathetic irony” of Trump, after President Biden joined workers on the picket line, accepting the invitation of the non-union Drake Enterprises.
On Earth 2 the non-union auto manufacturers and the life-long virulently anti-worker Trump are the folks who have the workers’ backs.
The totally fake “populist” Trump and his supporters in the GOP are trying to convince both the auto workers and the public that there is opposition to conversion to electric vehicles which explains the strike underway now against the Big 3. The UAW does not oppose the conversion. What it wants is a “just” conversion, with the production of such vehicles in union shops at union wages. And the strike, of course, is about getting back what they gave away years ago to keep the automakers afloat.
Trump went to the non-union plant outside Detroit on September 27 to toot his political horn by using electric vehicles as a wedge issue in his race to reclaim the White House by diverting attention from the real reasons for the strike.
In response, the AFL-CIO trotted out a long background analysis of Trump’s real anti-worker record, citing everything from appointing anti-worker Labor Secretaries and National Labor Relations Board members to his schemes to destroy federal worker unions and even evict them from their offices. It didn’t mention electric vehicles.
“The idea that Donald Trump has ever, or will ever, care about working people is demonstrably false,” said federation President Liz Shuler as she walked a picket line with United Auto Workers members outside Detroit, the same day Trump spoke and a day after Democrat Biden became the first incumbent U.S. president to join and speak at a picket line.
“For his entire time as president, he [Trump] actively sought to roll back worker protections, wages, and the right to join a union at every level. UAW members are on the picket line fighting for fair wages and against the very corporate greed that Donald Trump represents,” Shuler continued.
“Working people see through his transparent efforts to reinvent history. We are not buying the lies that Donald Trump is selling. We will continue to support and organize for the causes and candidates that represent our values,” Shuler declared.
Tries to cloud the issues
To try to reduce the understanding workers have of his real role, Trump, as usual yesterday, played on fears, especially among white working-class men. He falsely claimed that EVs would leave auto workers jobless. He ignored the fact that workers can and will fight for a just transition.
“Yesterday Joe Biden came to Michigan to pose for photos at the picket line, but it’s his policies that send Michigan auto workers to the unemployment line,” Trump charged.
Trump seized on those electric vehicle (EV) fears to try to drive a wedge into the UAW, orating to a carefully screened crowd of 500 factory workers, including present and former auto workers, at the Drake Enterprises plant 20 miles outside Detroit. Some waved “Unionists for Trump” signs.
“My pledge to everyone is that a vote for President Trump means the future where the automobile will be made in America,” he blared. “It will be fueled by American energy, sourced by American suppliers, it will be sculpted from American aluminum and steel, and it will be built by highly skilled American hands and high-wage, American labor.”
Those are all lies, as shown by his past record, the AFL-CIO backgrounder says.
Most importantly, Trump denounced what he called Biden’s “EV mandate.” That’s the administration’s plan, being implemented by the car companies, and backed by UAW, to transition the U.S. from gasoline and diesel-powered cars, trucks, and SUVs to electric-powered ones.
Doing so would reduce the greenhouse gas emissions that scientists declare cause global warming. But doing so also sends shivers up some auto workers’ spines, including the retirees and scattered active UAW members in Trump’s carefully screened 500-person crowd.
Ford, GM, and Stellantis—formerly known as FiatChrysler—aren’t exactly calming those fears among the union’s 150,000 Auto Workers who toil at the car companies, either. Right now, 18,000 are out on the union’s “Stand Up!” strike that began at midnight September 14-15. UAW expects to tell more locals to walk on September 29 at noon. The union is both striking and bargaining with the Detroit 3.
On Earth 1 the key issues are restoring wage losses that occurred since the financier-caused crash which bankrupted GM and FiatChrysler 15 years ago, elimination of the auto firms’ two-tier wage systems, restoration of traditional defined benefit pensions, a cut in work hours and elimination of mandatory overtime, and higher pension payments for retirees, who haven’t had a raise in over a decade.
The corporate class that runs the car companies plans to invest billions of dollars into converting their plants to EV production. Some estimates start at $35 billion. They’re using that looming spending as an excuse to resist UAW members’ pay demands. Never mind they invested billions in stock buybacks over the last decade, UAW figures show, making Wall Street financiers happy.
And the companies have made clear that it takes a lot fewer workers to make EVs than to manufacture traditional gasoline and diesel-powered vehicles. Of those fewer workers, the car companies want to shove many into EV battery plants, at a lower wage scale, not on whatever wages they agree on with the UAW.
And while the UAW and the car companies all back the shift to EVs, Biden irked the union when his administration awarded the first two EV battery plant subsidies, worth $9.2 billion, to firms—joint ventures—in anti-union red states Kentucky and Tennessee, and not in swing-state and pro-union Michigan.
As a result, while other unions, including two big independent unions, the Service Employees and the National Education Association, joined a mass AFL-CIO endorsement earlier this year of the Biden-Harris ticket, the UAW stayed away.
>>> READ MORE PEOPLE’S WORLD COVERAGE OF THE UAW STRIKE.
Wednesday, September 27, 2023
What is Life ?
Life as a category of logic ; brilliant materialism - paraphrase of Lenin on Hegel , I Believe
What is Life ?
Earth is the only planet in the Universe from which life is known; the cradle and home of humanity, and of all known forms of life.
Life is a concept in biology. It is about the characteristics, state, or mode that separates a living thing from dead matter. The word itself may refer to a living being or to the processes of which living things are a part. It may refer to the period when a living thing is functional (as between birth and death).
What is science ?
SCIENCE is a method for finding the truth about something , whether in the human or natural world . It does this based on logical analysis and synthesis of evidence, facts, data that is observed by human witnesses. No supernatural witnesses. It is the a structural analogy of the method as used in the law courts.
The scientific method is the process scientists follow to solve problems. Scientists spend much of their time conducting experiments and carefully recording, analyzing, and evaluating the data from experiments. If the data does not support a hypothesis, scientists must form a new hypothesis and conduct new experiments. When the data supports a hypothesis, scientists share their results with other scientists. When an hypothesis is proven as true it becomes a Theory or Law. Charles Darwin’s Laws of Evolution of Life and the modernly discovered laws of DNA have been proven true based on much evidence.
What is Biology ?
The Science of life is called Biology: people who study life are called biologists. A lifespan is the average length of life in a species. Most life on Earth is powered by solar energy: the only known exceptions are the chemosynthetic bacteria living around the hydrothermal vents on the ocean floor. All life on Earth is based on the chemistry of carbon compounds, specifically involving long-chain molecules such as proteins and nucleic acid. With water, which all life needs, the long molecules are wrapped inside membranes as cells. This may or may not be true of all possible forms of life in the Universe: it is true of all life on Earth today.
BIOLOGY is the SCIENCE of living things, of LIFE . A biologist is a scientist who studies biology, the activities, behavior, bodily motion of organisms . An organism is a term for any living thing. There are three main groups of organisms - bacteria, archaea and eukaryote ( which includes animals) organisms. Biologists try to understand the natural world and the things that live in it. These things include plants, animals, fungi, protozoa, algae, bacteria, and viruses.
Individual ANIMAL (We humans are animals ) organisms have instincts of Self-preservation. That is they have genetically based behavior that has the purpose of the organism surviving in the Darwinian “Struggle for Existence ": getting enough to eat and drink , not getting eaten, not freezing or overheating to death, not suffocating, not falling out of a tree or over a cliff, not drowning, not getting a disease.
(Archaea are single-celled organisms that often live in extreme places, like your guts! Like bacteria, Archaea are prokaryotic (pronounced proh-KAR-ee-oht-ik) cells: the smallest type of cell around.
Actually, university and professional biologists don’t just study living things, but have a profound understanding , but don’t know everything. They know a lot more than was known hundreds of years ago.
A eukaryote is a cell or organism that possesses a clearly defined nucleus. The cells of all multicellular organisms (plants, animals, and fungi) are eukaryotic. Algae and protists also are eukaryotic organism)
The study of biology covers many areas. It is usually divided into separate branches, or fields. Some biologists study anatomy, or the structure of living things. Some study expertly physiology, or how the different parts of a body work together. Still others study ecology, or how organisms interact with their environment. Some are experts in Evolution and Natural History . The Tree of Life, or Phylogenetic Tree of Life is used to symbolically represent evolution , changes due to natural selection, natural history; and the relation of all life to all other life by way of deriving reproductively from common ancestor species.
In addition to these general fields, some branches of biology study certain types of living things. Some biologists study large groups, such as all animals (zoology) or all plants (botany). Others, however, only study specific groups, such as insects, birds, or mosses.
What is Evolution?
Evolution is a theory, an idea with lots of evidence supporting it such that it is called a Law of Nature. It explains why some animals and plants are so good (and some so bad) at passing on their genes and body-type to future generations of their children. What it means is that a species changes over generations and can even split in two new species.
The theory of evolution was developed by Charles Darwin back in 1859. He said that evolution worked through natural selection. Natural selection means that some individuals in a species are better at surviving and mating than others, and will thereby have more children, have more of their genotypes in future generations ( What is a "genotype" ?)
Rabbit live all over, and have dark fur. But in a place where it snows a lot, white fur would be an advantage. A white furred rabbit would be harder to see and is more likely to survive and have children. These children will inherit its mum or dad’s white fur. Eventually all the rabbits living in the cold place will have white fur.
This is called ‘survival of the fittest’ meaning survival of the white fur gene-type in future generations after the current generation is dead.
Evolution also explains how one species can become two, like with the rabbits. We call this Speciation. The white rabbits are better fits where it snows but dark brown rabbits fit better where it snows less. With time, the different rabbits will become different species, both living in their own, separate environment.
Evolution says that all living things are related. This means that if will go back far enough in time, all animals, all plants and every other living thing, had one ancestor. Evolution led to that one species becoming many more until today when we have millions and millions.
Some animals are more closely related than others. The more closely related animals are, the more they look and act alike. Swans and geese look and act so similar because they are closely related. A sparrow looks very different to a swan but both still have beaks, feathers and can fly so are related but less closely than the swan is to the goose.
we look very different to a swan or a sparrow but we do have similarities. We both have two eyes, both have two legs, two arms (adapted to wings in a bird), one head, one heart, a nose and ears. We share all of these things and more with birds so, although we are very different, we are also related to birds.
Evolution is an important part of palaeontology. Many of the extinct animals found look like they have bits of different animals stuck to them. Many fossil birds are found with teeth. This is because birds evolved from Dinosaurs which do have teeth. Eventually birds lost their teeth and now no living bird species has them.
So evolution means we share a history with all the animals around us but also all the animals that are extinct. It means we are a part of nature and not better than it or above it. And it means that we should treasure those connections with nature and better protect them from our own, sometimes destructive, ways. This is the second part of Darwin’s Law: All life is related to all other life through common ancestral species. This is represented on a Tree of Life diagram by Darwin.
The idea of a Tree of Life is similar to the idea of a Family Tree. A phylogenic Tree of Life is a portrayal of how organisms are related as ancestors (parents) and progeny (children) in their evolutionary history. It is based on the evidence that all living things are related by common descent or through a common ancestor species . The evidence for phylogeny comes from palaeontology, comparative anatomy, and DNA sequence analysis.
The main product of phylogenetics is a phylogenetic tree or tree of life. This is a diagram showing a pattern of ancestor/descendent relationships. Information may be related to geological periods or estimated dates. A biological classification is another type of product.
The points of branching represent where one species evolves into to two different species.
To say it another way , A phylogenetic tree is a tree showing the evolutionary interrelationships among various species or other entities that are believed to have a common ancestor. A phylogenetic tree is a form of a cladogram. In a phylogenetic tree, each node with descendants represents the most recent common ancestor of the descendants, and edge lengths correspond to time estimates. Each node in a phylogenetic tree is called a taxonomic unit. Internal nodes are generally referred to as Hypothetical Taxonomic Units (HTUs) as they cannot be directly observed.
What Is anthropology ?
Anthropology is the science of _Human_ Life !
ANTHROPOLOGY is the study of people and cultures in the past and today. How did people live a few decades ago, or thousands of years ago? And how have societies and cultures changed over time? Anthropology is the science of how living generations inherit their language , culture, customs, religion, morals, traditions from ancestor generations , now dead.
Wayne County Community College District’s Ant 153 introduces students to physical anthropology one of the following four subfields of anthropology:
1) PHYSICAL ANTHROPOLOGY or BIOLOGICAL AND EVOLUTIONARY ANTHROPOLOGY, the focus of this class, discovers the truth of the biological theory and facts of human evolutionary origins and human physical diversity ; it does this based on especially _fossil_ evidence and the evolutionary theories of Charles Darwin and modern biology. However, the ideas ( especially language and culture) of the three other subfields listed below are important in understanding the unique characteristics of _human_ evolution.
2)ARCHAEOLOGY and 3) ETHNOLOGY explore the development of culture through the Truly Civilized Stone Age and so-called Civilization, examining artifacts, material culture, fossil remains, etc. and examining theories about Modes of Making a Living from cooperative/egalitarian foraging and horticulture to large scale domestication of plants and animals with private property, greed, economic classes, the state and male supremacy. ETHNOLOGY OR SOCIO-CULTURAL-HISTORICAL ANTHROPOLOGY , also gives an understanding of diverse customs , histories, traditions and religions , economic classes, nations and “race” in the present historical era of capitalism and globalism.
4 ) LINGUISTIC ANTHROPOLOGY investigates language or symbolic communication, like culture, an exclusive human capacity enabling us to share knowledge and experience with people remote from us in time and space; and like culture , shaping our worldviews and perception and interpretation of events.
Anthropology is the science of human beings in all times and places; study that is historical, systematic and objective, that is to say scientific, based on logical consideration and testing of material evidence, and natural theories ; from 100's of thousands of years ago to the present; from Detroit to the other ends of the Earth. This is in contrast with understanding humans based on whims, superstition, untested intuition , uncritical faith or unquestioned authority or supernatural beings. It is an understanding of human societies and individuals biologically and historically, that is as they have changed and developed ,evolved ,over time and many generations of individual selves. It seeks to be truly holistic in approach and scope , looking for the _whole_ truth, nothing but the truth. It welcomes contributions to its understanding of people from all the other academic disciplines, natural sciences, social sciences and humanities. It even considers respectfully and sympathetically systems of thought and belief from cultures very different than our own
SCIENCE is a method for finding the truth about something , whether in the human or natural world . It does this based on logical analysis and synthesis of evidence, facts, data that is observed by human witnesses. No supernatural witnesses. It is the same method as used in the law courts.
The scientific method is the process scientists follow to solve problems. Scientists spend much of their time conducting experiments and carefully recording, analyzing, and evaluating the data from experiments. If the data does not support a hypothesis, scientists must form a new hypothesis and conduct new experiments. When the data supports a hypothesis, scientists share their results with other scientists. When an hypothesis is proven as true it becomes a Theory or Law. Charles Darwin’s Laws of Evolution of Life and the modernly discovered laws of DNA have been proven true based much evidence.
BIOLOGY is the SCIENCE of living things, of LIFE . A biologist is a scientist who studies biology, the activities, behavior, bodily motion of organisms . An organism is a term for any living thing. There are three main groups of organisms - bacteria, archaea and eukaryota organisms. Biologists try to understand the natural world and the things that live in it. These things include plants, animals, fungi, protozoa, algae, bacteria, and viruses.
(Archaea are single-celled organisms that often live in extreme places, like your guts! Like bacteria, Archaea are prokaryotic (pronounced proh-KAR-ee-oht-ik) cells: the smallest type of cell around.
Actually, university and professional biologists don’t just study living things, but have a profound understanding , but don’t know everything. They know a lot more than was known hundreds of years ago.
A eukaryote is a cell or organism that possesses a clearly defined nucleus. The cells of all multicellular organisms (plants, animals, and fungi) are eukaryotic. Algae and protists also are eukaryotic organism)
The study of biology covers many areas. It is usually divided into separate branches, or fields. Some biologists study anatomy, or the structure of living things. Some study expertly physiology, or how the different parts of a body work together. Still others study ecology, or how organisms interact with their environment. Some are experts in Evolution and Natural History . The Tree of Life, or Phylogenetic Tree of Life is used to symbolically represent evolution , changes due to natural selection, natural history; and the relation of all life to all other life by way of deriving reproductively from common ancestor species.
In addition to these general fields, some branches of biology study certain types of living things. Some biologists study large groups, such as all animals (zoology) or all plants (botany). Others, however, only study specific groups, such as insects, birds, or mosses.
EVOLUTION is. the theory that all the kinds of living things that exist today developed from earlier types. The differences between them resulted from changes that happened over many years.
What is ANTHROPOLOGY ?
ANTHROPOLOGY is the study of people and cultures in the past and today. How did people live a few decades ago, or thousands of years ago? And how have societies and cultures changed over time? Anthropology is the science of how living generations inherit their language , culture, customs, religion, morals, traditions from ancestor generations , now dead.
To understand the full sweep and complexity of cultures across all of human history, anthropology draws and builds upon knowledge from the social and biological sciences as well as the humanities and physical sciences.
September 19, 2023
Anthropology 153 – Professor Charles D. Brown
Quiz # 1 - Due in one week ; September 26
1) What is Life ?
2) What is Science ?
3) What is Biology ?
4) What is Anthropology ?
What is Evolution of Life
What is Life ?
Earth is the only planet in the Universe from which life is known; the cradle and home of humanity, and of all known forms of life.
Life is a concept in biology. It is about the characteristics, state, or mode that separates a living thing from dead matter. The word itself may refer to a living being or to the processes of which living things are a part. It may refer to the period when a living thing is functional (as between birth and death).
What is science ?
SCIENCE is a method for finding the truth about something , whether in the human or natural world . It does this based on logical analysis and synthesis of evidence, facts, data that is observed by human witnesses. No supernatural witnesses. It is the a structural analogy of the method as used in the law courts.
The scientific method is the process scientists follow to solve problems. Scientists spend much of their time conducting experiments and carefully recording, analyzing, and evaluating the data from experiments. If the data does not support a hypothesis, scientists must form a new hypothesis and conduct new experiments. When the data supports a hypothesis, scientists share their results with other scientists. When an hypothesis is proven as true it becomes a Theory or Law. Charles Darwin’s Laws of Evolution of Life and the modernly discovered laws of DNA have been proven true based on much evidence.
What is Biology ?
The Science of life is called Biology: people who study life are called biologists. A lifespan is the average length of life in a species. Most life on Earth is powered by solar energy: the only known exceptions are the chemosynthetic bacteria living around the hydrothermal vents on the ocean floor. All life on Earth is based on the chemistry of carbon compounds, specifically involving long-chain molecules such as proteins and nucleic acid. With water, which all life needs, the long molecules are wrapped inside membranes as cells. This may or may not be true of all possible forms of life in the Universe: it is true of all life on Earth today.
BIOLOGY is the SCIENCE of living things, of LIFE . A biologist is a scientist who studies biology, the activities, behavior, bodily motion of organisms . An organism is a term for any living thing. There are three main groups of organisms - bacteria, archaea and eukaryote ( which includes animals) organisms. Biologists try to understand the natural world and the things that live in it. These things include plants, animals, fungi, protozoa, algae, bacteria, and viruses.
Individual ANIMAL (We humans are animals ) organisms have instincts of Self-preservation. That is they have genetically based behavior that has the purpose of the organism surviving in the Darwinian “Struggle for Existence ": getting enough to eat and drink , not getting eaten, not freezing or overheating to death, not suffocating, not falling out of a tree or over a cliff, not drowning, not getting a disease.
(Archaea are single-celled organisms that often live in extreme places, like your guts! Like bacteria, Archaea are prokaryotic (pronounced proh-KAR-ee-oht-ik) cells: the smallest type of cell around.
Actually, university and professional biologists don’t just study living things, but have a profound understanding , but don’t know everything. They know a lot more than was known hundreds of years ago.
A eukaryote is a cell or organism that possesses a clearly defined nucleus. The cells of all multicellular organisms (plants, animals, and fungi) are eukaryotic. Algae and protists also are eukaryotic organism)
The study of biology covers many areas. It is usually divided into separate branches, or fields. Some biologists study anatomy, or the structure of living things. Some study expertly physiology, or how the different parts of a body work together. Still others study ecology, or how organisms interact with their environment. Some are experts in Evolution and Natural History . The Tree of Life, or Phylogenetic Tree of Life is used to symbolically represent evolution , changes due to natural selection, natural history; and the relation of all life to all other life by way of deriving reproductively from common ancestor species.
In addition to these general fields, some branches of biology study certain types of living things. Some biologists study large groups, such as all animals (zoology) or all plants (botany). Others, however, only study specific groups, such as insects, birds, or mosses.
What is Evolution?
Evolution is a theory, an idea with lots of evidence supporting it such that it is called a Law of Nature. It explains why some animals and plants are so good (and some so bad) at passing on their genes and body-type to future generations of their children. What it means is that a species changes over generations and can even split in two new species.
The theory of evolution was developed by Charles Darwin back in 1859. He said that evolution worked through natural selection. Natural selection means that some individuals in a species are better at surviving and mating than others, and will thereby have more children, have more of their genotypes in future generations ( What is a "genotype" ?)
Rabbit live all over, and have dark fur. But in a place where it snows a lot, white fur would be an advantage. A white furred rabbit would be harder to see and is more likely to survive and have children. These children will inherit its mum or dad’s white fur. Eventually all the rabbits living in the cold place will have white fur.
This is called ‘survival of the fittest’ meaning survival of the white fur gene-type in future generations after the current generation is dead.
Evolution also explains how one species can become two, like with the rabbits. We call this Speciation. The white rabbits are better fits where it snows but dark brown rabbits fit better where it snows less. With time, the different rabbits will become different species, both living in their own, separate environment.
Evolution says that all living things are related. This means that if will go back far enough in time, all animals, all plants and every other living thing, had one ancestor. Evolution led to that one species becoming many more until today when we have millions and millions.
Some animals are more closely related than others. The more closely related animals are, the more they look and act alike. Swans and geese look and act so similar because they are closely related. A sparrow looks very different to a swan but both still have beaks, feathers and can fly so are related but less closely than the swan is to the goose.
we look very different to a swan or a sparrow but we do have similarities. We both have two eyes, both have two legs, two arms (adapted to wings in a bird), one head, one heart, a nose and ears. We share all of these things and more with birds so, although we are very different, we are also related to birds.
So evolution means we share a history with all the animals around us but also all the animals that are extinct. It means we are a part of nature and not better than it or above it. And it means that we should treasure those connections with nature and better protect them from our own, sometimes destructive, ways. This is the second part of Darwin’s Law: All life is related to all other life through common ancestral species. This is represented on a Tree of Life diagram by Darwin.
The idea of a Tree of Life is similar to the idea of a Family Tree. A phylogenic Tree of Life is a portrayal of how organisms are related as ancestors (parents) and progeny (children) in their evolutionary history. It is based on the evidence that all living things are related by common descent or through a common ancestor species . The evidence for phylogeny comes from palaeontology, comparative anatomy, and DNA sequence analysis.
The main product of phylogenetics is a phylogenetic tree or tree of life. This is a diagram showing a pattern of ancestor/descendent relationships. Information may be related to geological periods or estimated dates. A biological classification is another type of product.
The points of branching represent where one species evolves into to two different species.
To say it another way , A phylogenetic tree is a tree showing the evolutionary interrelationships among various species or other entities that are believed to have a common ancestor. A phylogenetic tree is a form of a cladogram. In a phylogenetic tree, each node with descendants represents the most recent common ancestor of the descendants, and edge lengths correspond to time estimates. Each node in a phylogenetic tree is called a taxonomic unit. Internal nodes are generally referred to as Hypothetical Taxonomic Units (HTUs) as they cannot be directly observed.
What Is anthropology ?
Anthropology is the science of _Human_ Life !
ANTHROPOLOGY is the study of people and cultures in the past and today. How did people live a few decades ago, or thousands of years ago? And how have societies and cultures changed over time? Anthropology is the science of how living generations inherit their language , culture, customs, religion, morals, traditions from ancestor generations , now dead.
Wayne County Community College District’s Ant 153 introduces students to physical anthropology one of the following four subfields of anthropology:
1) PHYSICAL ANTHROPOLOGY or BIOLOGICAL AND EVOLUTIONARY ANTHROPOLOGY, the focus of this class, discovers the truth of the biological theory and facts of human evolutionary origins and human physical diversity ; it does this based on especially _fossil_ evidence and the evolutionary theories of Charles Darwin and modern biology. However, the ideas ( especially language and culture) of the three other subfields listed below are important in understanding the unique characteristics of _human_ evolution.
2)ARCHAEOLOGY and 3) ETHNOLOGY explore the development of culture through the Truly Civilized Stone Age and so-called Civilization, examining artifacts, material culture, fossil remains, etc. and examining theories about Modes of Making a Living from cooperative/egalitarian foraging and horticulture to large scale domestication of plants and animals with private property, greed, economic classes, the state and male supremacy. ETHNOLOGY OR SOCIO-CULTURAL-HISTORICAL ANTHROPOLOGY , also gives an understanding of diverse customs , histories, traditions and religions , economic classes, nations and “race” in the present historical era of capitalism and globalism.
4 ) LINGUISTIC ANTHROPOLOGY investigates language or symbolic communication, like culture, an exclusive human capacity enabling us to share knowledge and experience with people remote from us in time and space; and like culture , shaping our worldviews and perception and interpretation of events.
Anthropology is the science of human beings in all times and places; study that is historical, systematic and objective, that is to say scientific, based on logical consideration and testing of material evidence, and natural theories ; from 100's of thousands of years ago to the present; from Detroit to the other ends of the Earth. This is in contrast with understanding humans based on whims, superstition, untested intuition , uncritical faith or unquestioned authority or supernatural beings. It is an understanding of human societies and individuals biologically and historically, that is as they have changed and developed ,evolved ,over time and many generations of individual selves. It seeks to be truly holistic in approach and scope , looking for the _whole_ truth, nothing but the truth. It welcomes contributions to its understanding of people from all the other academic disciplines, natural sciences, social sciences and humanities. It even considers respectfully and sympathetically systems of thought and belief from cultures very different than our own
SCIENCE is a method for finding the truth about something , whether in the human or natural world . It does this based on logical analysis and synthesis of evidence, facts, data that is observed by human witnesses. No supernatural witnesses. It is the same method as used in the law courts.
The scientific method is the process scientists follow to solve problems. Scientists spend much of their time conducting experiments and carefully recording, analyzing, and evaluating the data from experiments. If the data does not support a hypothesis, scientists must form a new hypothesis and conduct new experiments. When the data supports a hypothesis, scientists share their results with other scientists. When an hypothesis is proven as true it becomes a Theory or Law. Charles Darwin’s Laws of Evolution of Life and the modernly discovered laws of DNA have been proven true based much evidence.
BIOLOGY is the SCIENCE of living things, of LIFE . A biologist is a scientist who studies biology, the activities, behavior, bodily motion of organisms . An organism is a term for any living thing. There are three main groups of organisms - bacteria, archaea and eukaryota organisms. Biologists try to understand the natural world and the things that live in it. These things include plants, animals, fungi, protozoa, algae, bacteria, and viruses.
(Archaea are single-celled organisms that often live in extreme places, like your guts! Like bacteria, Archaea are prokaryotic (pronounced proh-KAR-ee-oht-ik) cells: the smallest type of cell around.
Actually, university and professional biologists don’t just study living things, but have a profound understanding , but don’t know everything. They know a lot more than was known hundreds of years ago.
A eukaryote is a cell or organism that possesses a clearly defined nucleus. The cells of all multicellular organisms (plants, animals, and fungi) are eukaryotic. Algae and protists also are eukaryotic organism)
The study of biology covers many areas. It is usually divided into separate branches, or fields. Some biologists study anatomy, or the structure of living things. Some study expertly physiology, or how the different parts of a body work together. Still others study ecology, or how organisms interact with their environment. Some are experts in Evolution and Natural History . The Tree of Life, or Phylogenetic Tree of Life is used to symbolically represent evolution , changes due to natural selection, natural history; and the relation of all life to all other life by way of deriving reproductively from common ancestor species.
In addition to these general fields, some branches of biology study certain types of living things. Some biologists study large groups, such as all animals (zoology) or all plants (botany). Others, however, only study specific groups, such as insects, birds, or mosses.
EVOLUTION is. the theory that all the kinds of living things that exist today developed from earlier types. The differences between them resulted from changes that happened over many years.
What is ANTHROPOLOGY ?
ANTHROPOLOGY is the study of people and cultures in the past and today. How did people live a few decades ago, or thousands of years ago? And how have societies and cultures changed over time? Anthropology is the science of how living generations inherit their language , culture, customs, religion, morals, traditions from ancestor generations , now dead.
To understand the full sweep and complexity of cultures across all of human history, anthropology draws and builds upon knowledge from the social and biological sciences as well as the humanities and physical sciences.
September 19, 2023
Anthropology 153 – Professor Charles D. Brown
Quiz # 1 - Due in one week ; September 26
1) What is Life ?
2) What is Science ?
3) What is Biology ?
4) What is Anthropology ?
What is Evolution of Life
https://youtu.be/cBbWagYqa1k?si=PxUq2T7vK-jBxHxe
Evolution and Phylogeny | GEO GIRL
Subject: Evolution and Phylogeny | GEO GIRL
https://youtu.be/isP-VITjHiM?si=92yCi-EyFjOQHjyr
https://youtu.be/isP-VITjHiM?si=92yCi-EyFjOQHjyr
Tuesday, September 26, 2023
Experts in presidential and U.S. labor history say they cannot recall an instance when a sitting president has joined an ongoing strike, even during the tenures of the more ardent pro-union presidents such as Franklin Delano Roosevelt and Harry Truman. Theodore Roosevelt invited labor leaders alongside mine operators to the White House amid a historic coal strike in 1902, a decision that was seen at the time as a rare embrace of unions as Roosevelt tried to resolve the dispute.
WASHINGTON (AP) — President Joe Biden’s decision to stand alongside United Auto Workers pickets on Tuesday on the 12th day of their strike against major carmakers underscores an allegiance to labor unions that appears to be unparalleled in presidential history.
Experts in presidential and U.S. labor history say they cannot recall an instance when a sitting president has joined an ongoing strike, even during the tenures of the more ardent pro-union presidents such as Franklin Delano Roosevelt and Harry Truman. Theodore Roosevelt invited labor leaders alongside mine operators to the White House amid a historic coal strike in 1902, a decision that was seen at the time as a rare embrace of unions as Roosevelt tried to resolve the dispute.
Lawmakers often appear at strikes to show solidarity with unions, and during his 2020 Democratic primary campaign, Biden and other presidential hopefuls joined a picket line of hundreds of casino workers in Las Vegas who were pushing for a contract with The Palms Casino Resort. But sitting presidents, who have to balance the rights of workers with disruptions to the economy, supply chains and other facets of everyday life, have long wanted to stay out of the strike fray — until Biden.
“This is absolutely unprecedented. No president has ever walked a picket line before,” said Erik Loomis, a professor at the University of Rhode Island and an expert on U.S. labor history. Presidents historically “avoided direct participation in strikes. They saw themselves more as mediators. They did not see it as their place to directly intervene in a strike or in labor action.”
Biden's trip to join a picket line in the suburbs of Detroit is the most significant demonstration of his pro-union bona fides, a record that includes vocal support for unionization efforts at Amazon.com facilities and executive actions that promoted worker organizing. He also earned a joint endorsement of the major unions earlier this year and has avoided southern California for high-dollar fundraisers amid the writers' and actors' strikes in Hollywood.
During the ongoing UAW strike, Biden has argued that the auto companies have not yet gone far enough to satisfy the union, although White House officials have repeatedly declined to say whether the president endorses specific UAW demands such as a 40% hike in wages and full-time pay for a 32-hour work week.
“I think the UAW gave up an incredible amount back when the automobile industry was going under. They gave everything from their pensions on, and they saved the automobile industry,” Biden said Monday from the White House. He stressed that the workers should benefit from the carmakers' riches “now that the industry is roaring back.”
Biden and other Democrats are more aggressively touting the president's pro-labor credentials at a time when former President Donald Trump is trying to chip away at union support in critical swing states where the constituency remains influential, including Michigan and Pennsylvania. Biden is also leaning in on his union support at a time when labor enjoys broad support from the public, with 67% of Americans approving of labor unions in an August Gallup poll.
Instead of participating in the second Republican primary debate on Wednesday, Trump will head to Michigan to meet with striking autoworkers, seeking to capitalize on discontent over the state of the economy and anger over the Biden administration's push for more electric vehicles — a key component of its clean-energy agenda.
“If it wasn’t for President Trump, Joe Biden would be giving autoworkers the East Palestine treatment and saying that his schedule was too busy," said Trump campaign adviser Jason Miller, referring to the small Ohio town that is still grappling with the aftermath of a February train derailment. Biden said he would visit the community but so far has not.
White House officials dismissed the notion that Trump forced their hand and noted that Biden was headed to Michigan at the request of UAW President Shawn Fain, who last week invited the sitting president to join the strikers.
“He is pro-UAW, he is pro-workers, that is this president,” White House press secretary Karine Jean-Pierre said Monday. “He stands by union workers, and he is going to stand with the men and women of the UAW.”
Yet the UAW strike, which expanded into 20 states last week, remains a dilemma for the Biden administration since a part of the workers' grievances include concerns about a broader transition to electric vehicles. The shift away from gas-powered vehicles has worried some autoworkers because electric versions require fewer people to manufacture and there is no guarantee that factories that produce them will be unionized.
'
Carolyn Nippa, who was walking the picket line Monday at the GM parts warehouse in Van Buren Township, Michigan, was ambivalent about the president’s advocacy for electric vehicles, even as she said Biden was a better president than Trump for workers. She said it was “great that we have a president who wants to support local unions and the working class.”
“I know it’s the future. It’s the future of the car industry,” Nippa said. “I’m hoping it doesn’t affect our jobs.”
Still, other pickets remained more skeptical about Biden's visit Tuesday.
Dave Ellis, who stocks parts at the distribution center, said he’s happy Biden wants to show people he’s behind the middle class. But he said the visit is just about getting more votes.
“I don’t necessarily believe that it’s really about us," said Ellis, who argued that Trump would be a better president for the middle class than Biden because Trump is a businessman.
The Biden administration has no formal role in the negotiations, and the White House pulled back a decision from the president earlier this month to send two key deputies to Michigan after determining it would be more productive for the advisers, Gene Sperling and acting Labor Secretary Julie Su, to monitor talks from Washington. ___
Krisher reported from Van Buren Township, Michigan. Associated Press writer Jill Colvin in Summerville, South Carolina, contributed to this report.
Monday, September 25, 2023
WEST CHESTER TOWNSHIP, Ohio – Workers at the GM parts distribution center on the outskirts of Cincinnati here are Standing Up to the ferocious greed of the Big 3 CEOs and their masters in finance capital who have profited at the expense of autoworkers across the nation.
In the blue city of Hamtramck, Mich., an all-Muslim city council recently sided with Muslim activists and banned the LGBTQ+ Pride flag on city property. Muslim residents are pushing for the same in nearby Dearborn, where close to half of residents are Arab Americans and protesters derailed a school board meeting last fall over an LGBTQ+-related curriculum.
Sunday, September 24, 2023
For 30 years monopoly media ideology has been the we are in a “post -racist “ world
Subject: LECTURE 2 ON RACE
LECTURE 2 ON RACE
In most categories measuring the quantity and quality of life – life expectancy, wealth, employment, disease, educational attainment, quality of neighborhood , and others - Black people are statistically or on average “inferior” to white people. That doesn’t mean every white person has a longer life than every Black person , but rather on average it is so; same with the other categories mentioned.
HOWEVER, THIS IS NOT DUE TO ANY INHERENT OR BIOLOGICAL OR MORAL OR CULTURAL INFERIORITY OF BLACK PEOPLE. RATHER IT IS THE RESULT OF GENERATIONS OF WHITE SUPREMACIST ENSLAVEMENT, JIM CROW ANDD REAGANITE OPPRESSION AND EXPLOITATION OF BLACK PEOPLE, IT IS UNJUST LY ND ILLEGITIMATELY SEIZED WHITE “SUPREMACY”, WHITE MORAL INFERIORITY
Following are articles on the life expectancy and wealth statistics.
LIFE EXPECTANCY
At birth, AIAN and Black people had a shorter life expectancy compared to White people, and AIAN, Hispanic, and Black people experienced larger declines in life expectancy than White people between 2019 and 2021. Life expectancy at birth represents the average number of years a group of infants would live if they were to experience throughout life the age-specific death rates prevailing during a specified period.
Provisional data from 2021 show that overall life expectancy across all racial/ethnic groups was 76.1 years (Figure 14). Life expectancy for Black people was only 70.8 years compared to 76.4 years for White people and 77.7 years for Hispanic people. It was highest for Asian people at 83.5 years and lowest for AIAN people who had a life expectancy of 65.2 years.
Life expectancies were even lower for Black and AIAN males, at 66.7 and 61.5 years, respectively.
Data were not available for NHOPI people. Overall life expectancy declined by 2.7 years between 2019 and 2021, with AIAN people experiencing the largest life expectancy decline of 6.6 years, followed by Hispanic and Black people (4.2 and 4.0 years, respectively), and a smaller decline of 2.4 years for White people. Asian people had the smallest decline in life expectancy of 2.1 years between 2019 and 2021. These declines largely reflect an increase in excess deaths due to COVID-19, which disproportionately impacted Black, Hispanic, and AIAN people.
https://www.kff.org/racial-equity-and-health-policy/report/key-data-on-health-and-health-care-by-race-and-ethnicity/#:~:text=Provisional%20data%20from%202021%20show,77.7%20years%20for%20Hispanic%20people.
The Lancet: Disparities in life expectancy persist among racial and ethnic groups across the US
New study offers the first comprehensive, county-level life expectancy estimates in the US and highlights important differences among racial and ethnic groups.
The analysis reveals that despite overall life expectancy gains of 2.3 years (from 76.8 years in 2000 to 79.1 years in 2019) during the 20-year study period (2000–2019), disparities among racial and ethnic groups remain, with Black populations still experiencing shorter life expectancy than White populations.
Life expectancy among the American Indian/Alaska Native population did not improve during the study period.
During the last 10 years of the study (2010–2019), life expectancy growth was stagnant across all races and ethnicities, setting the stage for declines in life expectancy that have been reported since the COVID-19 pandemic.
The Institute for Health Metrics and Evaluation’s interactive data visualization tool shows the life expectancy trends by racial and ethnic group in 3,110 counties in the 20-year span of the study.
How the racial wealth gap has evolved—and why it persists
New dataset identifies the causes of today’s wealth gap
October 3, 2022
AUTHORLisa Camner McKayWriter/Analyst, Institute
Jake MacDonald/Minneapolis Fed
Article Highlights
New dataset tracks evolution of racial wealth gap from 1860 to 2020
Racial wealth gap today is legacy of vastly unequal wealth for Black and White Americans following Civil War
Racial wealth gap has been stagnant for last 40 years due to differences in Black and White households’ wealth portfolios
How the racial wealth gap has evolved—and why it persists
“He felt his poverty; without a cent, without a home, without land, tools, or savings, he had entered into competition with rich, landed, skilled neighbors. To be a poor man is hard, but to be a poor race in a land of dollars is the very bottom of hardships.”
—W. E. B. Du Bois, The Souls of Black Folk
The dawn of emancipation in the United States saw 4 million former slaves, 90 percent of the Black American population, gain their freedom. But they did so in poverty, as Du Bois describes: A few years prior, they had been counted as wealth, earning and owning nothing in their own name.
After emancipation, proposals to provide former slaves with land so they could survive economically were largely defeated. Thus in 1870, the wealth gap between Black and White Americans was a staggering 23 to 1. That's equivalent to just $4 of wealth for Black Americans for every $100 for White Americans.
“We wanted to see if there was something to be learned for policy: Do we see that certain periods were particularly good, particularly bad in terms of convergence? What conclusions can we draw from that?”
—MORITZ KUHN
Fast forward 150 years and that gap has narrowed to about 6 to 1—and yet, a significant gap remains: average per capita wealth of White Americans was $338,093 in 2019 but only $60,126 for Black Americans.
In the new Institute working paper “Wealth of Two Nations: The U.S. Racial Wealth Gap, 1860–2020,” former Institute visiting scholar Ellora Derenoncourt and colleagues Chi Hyun Kim, Moritz Kuhn, and Moritz Schularick study the evolution of the Black-White racial wealth gap to understand how it has changed and what forces drove those changes.
“We wanted to see if there was something to be learned for policy: Do we see that certain periods were particularly good, particularly bad in terms of convergence? What conclusions can we draw from that?” Kuhn said about one motivation the author team had for undertaking the research.
Drawing on numerous historical resources, the economists construct a new dataset that fills in around 100 years of missing wealth data, from the 1880s to the 1980s, when modern surveys of wealth began. They then use a model of wealth accumulation to investigate the sources of the wealth gap.
So where does wealth come from? Yesterday’s wealth, mostly. Unlike income, which can change quickly—lose a job, take a new job—wealth builds slowly from interest on previous wealth and new savings from income. For that reason, “it takes a lot of time to build wealth and to close an existing wealth gap, especially if the world around you is not stopping to accumulate wealth,” Kuhn said.
The economists’ analysis suggests that, more than 150 years after the end of slavery, today’s racial wealth gap is the legacy of very different wealth conditions after emancipation. While the White-Black income gap has narrowed over time, differences in Black and White Americans’ capital gains rates and savings rates throughout history have slowed the convergence (closing the gap) between Black and White wealth.
The result: An enduring wealth gap that shows no sign of resolving. “It was interesting for us to see how extremely persistent the racial wealth gap is. We saw a lot of things changing in the U.S. economy in the last 70 years, but the racial wealth gap seems to be pretty ignorant of all that,” Kuhn observed.
Evolution of the racial wealth gap
Tracing 150 years of the racial wealth gap1 reveals rapid early progress followed by frustrating stagnation (Figure 1).
Dawn of emancipation: 1870 to 1900
The thirty years following emancipation saw rapid narrowing of the racial wealth gap, falling from a ratio of 56 to 1 in 1860 on the eve of the Civil War to 23 to 1 in 1870 following emancipation and 11 to 1 in 1900. (In 2019 dollars, that comes to average wealth of $34,000 for a White American and $3,100 for a Black American.) White slaveholders’ loss of slaves as “wealth” explains about a quarter of this convergence. The rest was due to a higher wealth accumulation rate for Black Americans than White Americans.
This convergence, however, is more a matter of statistics than reflection of meaningful economic or political change. Because Black Americans’ wealth was so low in 1870, even small gains translated to big percent increases in wealth and thus large reductions in the wealth gap, even though the difference in the amount of average wealth held by Black Americans and White Americans remained large.
Unfortunately, an early period of rapid wealth convergence was relatively short lived. Proposals to redistribute property to former slaves ultimately failed, and early enforcement of Black Americans’ rights were similarly reversed.
Unfortunately, this period of rapid convergence was relatively short-lived. Proposals to redistribute property to former slaves, such as General William Sherman’s field order allowing freed slaves to establish 40-acre farms on federal land, ultimately failed to garner sufficient political support, and early enforcement of Black Americans’ rights were similarly reversed. By 1900, a racist economic and social order was largely restored. Racist resurgence: 1900 to 1930 Between 1900 and 1930, the racial wealth gap narrowed tepidly, at a rate around 0.3 percent a year. During this period, Black Americans’ share of national wealth stayed fairly constant, at 1 percent (Figure 2). “Barriers to Black economic progress were pervasive in the post-Reconstruction era,” the economists observe. For instance, Black Americans had limited access to financial institutions or credit; they had little opportunity to purchase land; they experienced the violent destruction of their property; they faced widespread discrimination in education and the labor market. In the South, the vast majority of Black farmers were renters or sharecroppers in an economic system that hindered Black workers’ economic progress because White landlords were able to capture their tenants’ improvements to the land simply by not renewing the lease.
Global upheaval: 1930 to 1960
Wealth convergence picked back up modestly during this period, and by 1960 the gap was 8 to 1. (In 2019 dollars, that translates to average wealth of $76,000 for White Americans and $9,000 for Black Americans.) A closer look at the timing reveals this does not appear to be the result of New Deal economic relief or new social insurance policies, which tended to exclude sectors with large representations of Black workers. Rather, labor market dynamics around the time of World War II led to Black workers moving into higher-paying occupations, notably related to war production and defense, which reduced the racial income gap and led to greater gains in Black Americans’ wealth. This movement was facilitated by President Franklin D. Roosevelt’s Executive Order 8802, which banned “discrimination in the employment of workers in defense industries or government because of race, creed, color, or national origin.”
Civil rights: 1960 to 1980
The civil rights movement was responsible for the fastest period of racial wealth convergence since 1900. Tireless efforts by Black activists to demand equal rights and protections led to the passage of numerous laws that reduced social, political, and economic discrimination, including the Civil Rights Act of 1964, the Voting Rights Act of 1965, the Fair Housing Act of 1968, and expansions to the Fair Labor Standards Act, which sets federal minimum wage policies.
These legislations helped narrow the racial income gap, which in turn narrowed the wealth gap; it fell from 8 to 1 in 1960 to 5 to 1 in 1980. Figure 2 shows that Black Americans’ share of national wealth started increasing more rapidly in 1960 even as the total U.S. population of Black Americans was also increasing.
Stagnation: 1980 to 2020
And then—convergence stopped. In the 40 years between 1980 and 2020, the racial wealth gap actually increased by the equivalent of 0.1 percent a year. The reasons for this stagnation are discussed in the section “A widening gap: The role of capital gains” below.
Unequal initial wealth, unequal wealth accumulation
The next step in the economists' research is to analyze the causes of the racial wealth gap. To do this, they engage in a thought experiment: What if Black and White Americans started with the radically different levels of wealth in 1870 that they did in real life, but their wealth accumulation rates were identical after that? The resulting wealth gap in 2020 would be about 3 to 1 ($100 dollars of White wealth for every $33 dollars of Black wealth). That’s about half of what the actual wealth gap is today, suggesting that unequal levels of wealth in 1870 are a major source of today’s racial wealth gap.
The fact that today’s racial wealth gap is larger than it would be under this optimistic scenario is due to unequal wealth accumulation rates, which of course haven’t been identical for White and Black Americans, as the brief history above of political and economic exclusion makes plain.
Wealth accumulation can be described as a fairly straightforward equation. It starts with yesterday’s wealth and the interest earned on that wealth (capital gains rate). Add to that new savings from income, which is the product of yesterday’s income level, how much income has changed (income growth rate), and how much of that income is saved (savings rate).
While historical data on these rates is difficult to come by, since at least 1950, White Americans have enjoyed a higher average savings rate and capital gains rate than Black Americans (see Table 1).
Table 1. White and Black Americans' savings and capital gains rates
Source: Derenoncourt, Kim, Kuhn, and Schularick, “Wealth of Two Nations: The U.S. Racial Wealth Gap, 1860-2020.”
White Americans (%) Black Americans (%)
Average savings rate 5.0 3.9
Average capital gains rate 1.0 0.8
What drove wealth convergence, then? The income growth rate. The economists estimate that the average annual income growth rate for Black Americans was larger than that of White Americans from 1870 to about 1980. At that point, income convergence stalled; over the last 40 years, the annual income growth rates for Black and White Americans have been essentially the same.
A widening gap: The role of capital gains
Now that income convergence has stalled, the difference in the capital gains rate experienced by Black and White households is the main factor pushing their wealth apart.
The role of capital gains is particularly important here. The high rate of return to capital holdings over the last 40 years—economic parlance for “stocks have really gone up a lot”—is a leading cause of the wealth dispersion in the United States today. According to analysis by economist Emmanuel Saez and others, wealth has become significantly more concentrated during this period: In 1980, the richest 0.1 percent of Americans—about 160,000 households—owned 7.7 percent of national wealth. In 2020, they owned 18.5 percent.
“Given that there are so few Black households at the top of the wealth distribution,” Derenoncourt and co-authors write, “faster growth in wealth at the top will lead to further increases in racial wealth inequality.”
And that’s what’s happening now. On average between 1950 and 2010, Black households held about 7 percent of their wealth in stock equity; among White households, it was 18 percent (Table 2). The portfolios of White households are also more diversified than Black households, which are concentrated in housing wealth. Housing has appreciated since the 1950s, but stock equity has appreciated five times as much.
Table 2. White and Black households' wealth portfolio composition
Note: Equity refers to wealth in stocks and mutual funds. Liquid assets include cash, checking accounts, and savings accounts. Other nonfinancial assets include household items like cars or boats.
Source: Survey of Consumer Finances 2019 and calculations by Derenoncourt, Kim, Kuhn, and Schularick.
White households (%) Black households (%)
Housing 38 59
Business 24 13
Equity 18 7
Liquid assets 17 13
Other nonfinancial assets 3 8
“At a more general level,” Kuhn stated, “this research emphasizes how important portfolio choice and investment behavior is. It’s not only about putting money aside, but where you put it.”
LECTURE 2 ON RACE
In most categories measuring the quantity and quality of life – life expectancy, wealth, employment, disease, educational attainment, quality of neighborhood , and others - Black people are statistically or on average “inferior” to white people. That doesn’t mean every white person has a longer life than every Black person , but rather on average it is so; same with the other categories mentioned.
HOWEVER, THIS IS NOT DUE TO ANY INHERENT OR BIOLOGICAL OR MORAL OR CULTURAL INFERIORITY OF BLACK PEOPLE. RATHER IT IS THE RESULT OF GENERATIONS OF WHITE SUPREMACIST ENSLAVEMENT, JIM CROW ANDD REAGANITE OPPRESSION AND EXPLOITATION OF BLACK PEOPLE, IT IS UNJUST LY ND ILLEGITIMATELY SEIZED WHITE “SUPREMACY”, WHITE MORAL INFERIORITY
Following are articles on the life expectancy and wealth statistics.
LIFE EXPECTANCY
At birth, AIAN and Black people had a shorter life expectancy compared to White people, and AIAN, Hispanic, and Black people experienced larger declines in life expectancy than White people between 2019 and 2021. Life expectancy at birth represents the average number of years a group of infants would live if they were to experience throughout life the age-specific death rates prevailing during a specified period.
Provisional data from 2021 show that overall life expectancy across all racial/ethnic groups was 76.1 years (Figure 14). Life expectancy for Black people was only 70.8 years compared to 76.4 years for White people and 77.7 years for Hispanic people. It was highest for Asian people at 83.5 years and lowest for AIAN people who had a life expectancy of 65.2 years.
Life expectancies were even lower for Black and AIAN males, at 66.7 and 61.5 years, respectively.
Data were not available for NHOPI people. Overall life expectancy declined by 2.7 years between 2019 and 2021, with AIAN people experiencing the largest life expectancy decline of 6.6 years, followed by Hispanic and Black people (4.2 and 4.0 years, respectively), and a smaller decline of 2.4 years for White people. Asian people had the smallest decline in life expectancy of 2.1 years between 2019 and 2021. These declines largely reflect an increase in excess deaths due to COVID-19, which disproportionately impacted Black, Hispanic, and AIAN people.
https://www.kff.org/racial-equity-and-health-policy/report/key-data-on-health-and-health-care-by-race-and-ethnicity/#:~:text=Provisional%20data%20from%202021%20show,77.7%20years%20for%20Hispanic%20people.
The Lancet: Disparities in life expectancy persist among racial and ethnic groups across the US
New study offers the first comprehensive, county-level life expectancy estimates in the US and highlights important differences among racial and ethnic groups.
The analysis reveals that despite overall life expectancy gains of 2.3 years (from 76.8 years in 2000 to 79.1 years in 2019) during the 20-year study period (2000–2019), disparities among racial and ethnic groups remain, with Black populations still experiencing shorter life expectancy than White populations.
Life expectancy among the American Indian/Alaska Native population did not improve during the study period.
During the last 10 years of the study (2010–2019), life expectancy growth was stagnant across all races and ethnicities, setting the stage for declines in life expectancy that have been reported since the COVID-19 pandemic.
The Institute for Health Metrics and Evaluation’s interactive data visualization tool shows the life expectancy trends by racial and ethnic group in 3,110 counties in the 20-year span of the study.
How the racial wealth gap has evolved—and why it persists
New dataset identifies the causes of today’s wealth gap
October 3, 2022
AUTHORLisa Camner McKayWriter/Analyst, Institute
Jake MacDonald/Minneapolis Fed
Article Highlights
New dataset tracks evolution of racial wealth gap from 1860 to 2020
Racial wealth gap today is legacy of vastly unequal wealth for Black and White Americans following Civil War
Racial wealth gap has been stagnant for last 40 years due to differences in Black and White households’ wealth portfolios
How the racial wealth gap has evolved—and why it persists
“He felt his poverty; without a cent, without a home, without land, tools, or savings, he had entered into competition with rich, landed, skilled neighbors. To be a poor man is hard, but to be a poor race in a land of dollars is the very bottom of hardships.”
—W. E. B. Du Bois, The Souls of Black Folk
The dawn of emancipation in the United States saw 4 million former slaves, 90 percent of the Black American population, gain their freedom. But they did so in poverty, as Du Bois describes: A few years prior, they had been counted as wealth, earning and owning nothing in their own name.
After emancipation, proposals to provide former slaves with land so they could survive economically were largely defeated. Thus in 1870, the wealth gap between Black and White Americans was a staggering 23 to 1. That's equivalent to just $4 of wealth for Black Americans for every $100 for White Americans.
“We wanted to see if there was something to be learned for policy: Do we see that certain periods were particularly good, particularly bad in terms of convergence? What conclusions can we draw from that?”
—MORITZ KUHN
Fast forward 150 years and that gap has narrowed to about 6 to 1—and yet, a significant gap remains: average per capita wealth of White Americans was $338,093 in 2019 but only $60,126 for Black Americans.
In the new Institute working paper “Wealth of Two Nations: The U.S. Racial Wealth Gap, 1860–2020,” former Institute visiting scholar Ellora Derenoncourt and colleagues Chi Hyun Kim, Moritz Kuhn, and Moritz Schularick study the evolution of the Black-White racial wealth gap to understand how it has changed and what forces drove those changes.
“We wanted to see if there was something to be learned for policy: Do we see that certain periods were particularly good, particularly bad in terms of convergence? What conclusions can we draw from that?” Kuhn said about one motivation the author team had for undertaking the research.
Drawing on numerous historical resources, the economists construct a new dataset that fills in around 100 years of missing wealth data, from the 1880s to the 1980s, when modern surveys of wealth began. They then use a model of wealth accumulation to investigate the sources of the wealth gap.
So where does wealth come from? Yesterday’s wealth, mostly. Unlike income, which can change quickly—lose a job, take a new job—wealth builds slowly from interest on previous wealth and new savings from income. For that reason, “it takes a lot of time to build wealth and to close an existing wealth gap, especially if the world around you is not stopping to accumulate wealth,” Kuhn said.
The economists’ analysis suggests that, more than 150 years after the end of slavery, today’s racial wealth gap is the legacy of very different wealth conditions after emancipation. While the White-Black income gap has narrowed over time, differences in Black and White Americans’ capital gains rates and savings rates throughout history have slowed the convergence (closing the gap) between Black and White wealth.
The result: An enduring wealth gap that shows no sign of resolving. “It was interesting for us to see how extremely persistent the racial wealth gap is. We saw a lot of things changing in the U.S. economy in the last 70 years, but the racial wealth gap seems to be pretty ignorant of all that,” Kuhn observed.
Evolution of the racial wealth gap
Tracing 150 years of the racial wealth gap1 reveals rapid early progress followed by frustrating stagnation (Figure 1).
Dawn of emancipation: 1870 to 1900
The thirty years following emancipation saw rapid narrowing of the racial wealth gap, falling from a ratio of 56 to 1 in 1860 on the eve of the Civil War to 23 to 1 in 1870 following emancipation and 11 to 1 in 1900. (In 2019 dollars, that comes to average wealth of $34,000 for a White American and $3,100 for a Black American.) White slaveholders’ loss of slaves as “wealth” explains about a quarter of this convergence. The rest was due to a higher wealth accumulation rate for Black Americans than White Americans.
This convergence, however, is more a matter of statistics than reflection of meaningful economic or political change. Because Black Americans’ wealth was so low in 1870, even small gains translated to big percent increases in wealth and thus large reductions in the wealth gap, even though the difference in the amount of average wealth held by Black Americans and White Americans remained large.
Unfortunately, an early period of rapid wealth convergence was relatively short lived. Proposals to redistribute property to former slaves ultimately failed, and early enforcement of Black Americans’ rights were similarly reversed.
Unfortunately, this period of rapid convergence was relatively short-lived. Proposals to redistribute property to former slaves, such as General William Sherman’s field order allowing freed slaves to establish 40-acre farms on federal land, ultimately failed to garner sufficient political support, and early enforcement of Black Americans’ rights were similarly reversed. By 1900, a racist economic and social order was largely restored. Racist resurgence: 1900 to 1930 Between 1900 and 1930, the racial wealth gap narrowed tepidly, at a rate around 0.3 percent a year. During this period, Black Americans’ share of national wealth stayed fairly constant, at 1 percent (Figure 2). “Barriers to Black economic progress were pervasive in the post-Reconstruction era,” the economists observe. For instance, Black Americans had limited access to financial institutions or credit; they had little opportunity to purchase land; they experienced the violent destruction of their property; they faced widespread discrimination in education and the labor market. In the South, the vast majority of Black farmers were renters or sharecroppers in an economic system that hindered Black workers’ economic progress because White landlords were able to capture their tenants’ improvements to the land simply by not renewing the lease.
Global upheaval: 1930 to 1960
Wealth convergence picked back up modestly during this period, and by 1960 the gap was 8 to 1. (In 2019 dollars, that translates to average wealth of $76,000 for White Americans and $9,000 for Black Americans.) A closer look at the timing reveals this does not appear to be the result of New Deal economic relief or new social insurance policies, which tended to exclude sectors with large representations of Black workers. Rather, labor market dynamics around the time of World War II led to Black workers moving into higher-paying occupations, notably related to war production and defense, which reduced the racial income gap and led to greater gains in Black Americans’ wealth. This movement was facilitated by President Franklin D. Roosevelt’s Executive Order 8802, which banned “discrimination in the employment of workers in defense industries or government because of race, creed, color, or national origin.”
Civil rights: 1960 to 1980
The civil rights movement was responsible for the fastest period of racial wealth convergence since 1900. Tireless efforts by Black activists to demand equal rights and protections led to the passage of numerous laws that reduced social, political, and economic discrimination, including the Civil Rights Act of 1964, the Voting Rights Act of 1965, the Fair Housing Act of 1968, and expansions to the Fair Labor Standards Act, which sets federal minimum wage policies.
These legislations helped narrow the racial income gap, which in turn narrowed the wealth gap; it fell from 8 to 1 in 1960 to 5 to 1 in 1980. Figure 2 shows that Black Americans’ share of national wealth started increasing more rapidly in 1960 even as the total U.S. population of Black Americans was also increasing.
Stagnation: 1980 to 2020
And then—convergence stopped. In the 40 years between 1980 and 2020, the racial wealth gap actually increased by the equivalent of 0.1 percent a year. The reasons for this stagnation are discussed in the section “A widening gap: The role of capital gains” below.
Unequal initial wealth, unequal wealth accumulation
The next step in the economists' research is to analyze the causes of the racial wealth gap. To do this, they engage in a thought experiment: What if Black and White Americans started with the radically different levels of wealth in 1870 that they did in real life, but their wealth accumulation rates were identical after that? The resulting wealth gap in 2020 would be about 3 to 1 ($100 dollars of White wealth for every $33 dollars of Black wealth). That’s about half of what the actual wealth gap is today, suggesting that unequal levels of wealth in 1870 are a major source of today’s racial wealth gap.
The fact that today’s racial wealth gap is larger than it would be under this optimistic scenario is due to unequal wealth accumulation rates, which of course haven’t been identical for White and Black Americans, as the brief history above of political and economic exclusion makes plain.
Wealth accumulation can be described as a fairly straightforward equation. It starts with yesterday’s wealth and the interest earned on that wealth (capital gains rate). Add to that new savings from income, which is the product of yesterday’s income level, how much income has changed (income growth rate), and how much of that income is saved (savings rate).
While historical data on these rates is difficult to come by, since at least 1950, White Americans have enjoyed a higher average savings rate and capital gains rate than Black Americans (see Table 1).
Table 1. White and Black Americans' savings and capital gains rates
Source: Derenoncourt, Kim, Kuhn, and Schularick, “Wealth of Two Nations: The U.S. Racial Wealth Gap, 1860-2020.”
White Americans (%) Black Americans (%)
Average savings rate 5.0 3.9
Average capital gains rate 1.0 0.8
What drove wealth convergence, then? The income growth rate. The economists estimate that the average annual income growth rate for Black Americans was larger than that of White Americans from 1870 to about 1980. At that point, income convergence stalled; over the last 40 years, the annual income growth rates for Black and White Americans have been essentially the same.
A widening gap: The role of capital gains
Now that income convergence has stalled, the difference in the capital gains rate experienced by Black and White households is the main factor pushing their wealth apart.
The role of capital gains is particularly important here. The high rate of return to capital holdings over the last 40 years—economic parlance for “stocks have really gone up a lot”—is a leading cause of the wealth dispersion in the United States today. According to analysis by economist Emmanuel Saez and others, wealth has become significantly more concentrated during this period: In 1980, the richest 0.1 percent of Americans—about 160,000 households—owned 7.7 percent of national wealth. In 2020, they owned 18.5 percent.
“Given that there are so few Black households at the top of the wealth distribution,” Derenoncourt and co-authors write, “faster growth in wealth at the top will lead to further increases in racial wealth inequality.”
And that’s what’s happening now. On average between 1950 and 2010, Black households held about 7 percent of their wealth in stock equity; among White households, it was 18 percent (Table 2). The portfolios of White households are also more diversified than Black households, which are concentrated in housing wealth. Housing has appreciated since the 1950s, but stock equity has appreciated five times as much.
Table 2. White and Black households' wealth portfolio composition
Note: Equity refers to wealth in stocks and mutual funds. Liquid assets include cash, checking accounts, and savings accounts. Other nonfinancial assets include household items like cars or boats.
Source: Survey of Consumer Finances 2019 and calculations by Derenoncourt, Kim, Kuhn, and Schularick.
White households (%) Black households (%)
Housing 38 59
Business 24 13
Equity 18 7
Liquid assets 17 13
Other nonfinancial assets 3 8
“At a more general level,” Kuhn stated, “this research emphasizes how important portfolio choice and investment behavior is. It’s not only about putting money aside, but where you put it.”
An informal economy (informal sector or grey economy)[1][2] is the part of any economy( Wikipedia)
An informal economy (informal sector or grey economy)[1][2] is the part of any economy that is neither taxed nor monitored by any form of government. Although the informal sector makes up a significant portion of the economies in developing countries, it is sometimes stigmatized as troublesome and unmanageable. However, the informal sector provides critical economic opportunities for the poor[3][4] and has been expanding rapidly since the 1960s.[5] Integrating the informal economy into the formal sector is an important policy challenge.[3]
Black market sellers offer watches for sale to US soldiers in Baghdad in 2004.
Informal economy: Haircut on a sidewalk in Vietnam.
In many cases, unlike the formal economy, activities of the informal economy are not included in a country's gross national product (GNP) or gross domestic product (GDP).[3] However, Italy has included estimates of informal activity in their GDP calculations since 1987, which swells their GDP by an estimated 18%[6] and in 2014, a number of European countries formally changed their GDP calculations to include prostitution and narcotics sales in their official GDP statistics, in line with international accounting standards, prompting an increase between 3-7%.[7] The informal sector can be described as a grey market in labour. Other concepts that can be characterized as informal sector can include the black market (shadow economy, underground economy), agorism, and System D. Associated idioms include "under the table", "off the books", and "working for cash".
Definition Edit
Ice cream street vendor in Mexico.
Black market peddler on graffiti, Kharkiv The original use of the term 'informal sector' is attributed to the economic development model put forward in 1955 by W. Arthur Lewis, used to describe employment or livelihood generation primarily within the developing world. It was used to describe a type of employment that was viewed as falling outside of the modern industrial sector.[8] An alternative definition from 2007 uses job security as the measure of formality, defining participants in the informal economy as those "who do not have employment security, work security and social security".[9] While both of these definitions imply a lack of choice or agency in involvement with the informal economy, participation may also be driven by a wish to avoid regulation or taxation. This may manifest as unreported employment, hidden from the state for tax, social security or labour law purposes, but legal in all other aspects.[10] In 2016 Edgar L. Feige proposed a taxonomy for describing unobserved economies including the informal economy as being characterized by some form of "non-compliant behavior with an institutional set of rules".[11] He argues that circumvention of labor market regulations specifying minimum wages, working conditions, social security, unemployment and disability benefits gives rise to an informal economy, which deprives some workers of deserved benefits while conveying undeserved benefits to others.
The term is also useful in describing and accounting for forms of shelter or living arrangements that are similarly unlawful, unregulated, or not afforded protection of the state. 'Informal economy' is increasingly[when?] replacing 'informal sector' as the preferred descriptor for this activity.[3]
Informality, both in housing and livelihood generation has historically been seen as a social ill, and described either in terms of what participant's lack, or wish to avoid. In 2009, the Dutch sociologist Saskia Sassen viewed the new 'informal' sector as the product and driver of advanced capitalism and the site of the most entrepreneurial aspects of the urban economy, led by creative professionals such as artists, architects, designers and software developers.[12] While this manifestation of the informal sector remains largely a feature of developed countries, increasingly systems are emerging to facilitate similarly qualified people in developing countries to participate.[13]
History Edit
Governments have tried to regulate aspects of their economies for as long as surplus wealth has existed which is at least as early as Sumer. Yet no such regulation has ever been wholly enforceable.[citation needed]
Daily life of the informal economy in the streets of Bolivia. Archaeological and anthropological evidence strongly suggests that people of all societies regularly adjust their activity within economic systems in attempt to evade regulations.[citation needed] Therefore, if informal economic activity is that which goes unregulated in an otherwise regulated system then informal economies are as old as their formal counterparts, if not older.[citation needed] The term itself, however, is much more recent.[citation needed]
The optimism of the modernization theory school of development had led people in the 1950s and 1960s to believe that traditional forms of work and production would disappear as a result of economic progress in developing countries.[citation needed] As this optimism proved to be unfounded, scholars turned to study more closely what was then called the traditional sector and found that the sector had not only persisted, but in fact expanded to encompass new developments.[citation needed] In accepting that these forms of productions were there to stay, scholars and some international organizations quickly took up the term informal sector (later known as the informal economy or just informality). The term Informal income opportunities is credited to the British anthropologist Keith Hart in a 1971 study on Ghana published in 1973,[14] and was coined by the International Labour Organization in a widely read study on Kenya in 1972.[citation needed]
In his 1989 book The Underground Economies: Tax Evasion and Information Distortion, Edgar L. Feige examined the economic implications of a shift of economic activity from the observed to the non-observed sector of the economy. Such a shift not only reduces the government's ability to collect revenues, it can also bias the nation's information systems and therefore lead to misguided policy decisions. The book examines alternative means of estimating the size of various unobserved economies and examines their consequences in both socialist and market oriented economies.[15] Feige goes on to develop a taxonomic framework that clarifies the distinctions between informal, illegal, unreported and unrecorded economies, and identifies their conceptual and empirical linkages and the alternative means of measuring their size and trends.[16] Since then, the informal sector has become an increasingly popular subject of investigation in economics, sociology, anthropology and urban planning. With the turn towards so called post-fordist modes of production in the advanced developing countries, many workers were forced out of their formal sector work and into informal employment. In a 2005 collection of articles, The Informal Economy. Studies in Advanced and Less Developed Countries, the existence of an informal economy in all countries was demonstrated with case studies ranging from New York City and Madrid to Uruguay and Colombia.[17]
Black market in Shinbashi, Japan, 1946 An influential book on the informal economy is Hernando de Soto's El otro sendero (1986),[18] which was published in English in 1989 as The Other Path with a preface by Peruvian writer Mario Vargas Llosa.[19] De Soto and his team argued that excessive regulation in the Peruvian and other Latin American economies forced a large part of the economy into informality and thus prevented economic development. While accusing the ruling class of 20th century mercantilism, de Soto admired the entrepreneurial spirit of the informal economy. In a widely cited experiment, his team tried to legally register a small garment factory in Lima. This took more than 100 administrative steps and almost a year of full-time work. Feige's review of the Other Path places the work in the context of the informal economy literature.[20] Whereas de Soto's work is popular with policymakers and champions of free market policies like The Economist, some scholars of the informal economy have criticized it both for methodological flaws and normative bias.[21]
In the second half of the 1990s many scholars started to consciously use the term "informal economy" instead of "informal sector" to refer to a broader concept which includes enterprises as well as employment in developing, transition, and advanced industrialized economies.[citation needed]
Among the surveys about the size and development of the shadow economy (mostly expressed in percent of official GDP) are those by Feige (1989), and Schneider and Enste (2000) with an intensive discussion about the various estimation procedures of the size of the shadow economy as well as a critical evaluation of the size of the shadow economy and the consequences of the shadow economy on the official one.[22][23] Feige´s most recent survey paper on the subject from 2016 reviewed the meaning and measurement of unobserved economies and is particularly critical of estimates of the size of the so-called shadow economy which employ Multiple Indicator multiple cause methods, which treat the shadow economy as a latent variable.[24]
Characteristics Edit
Waste picker in Indonesia
Street vendor in Colombia
Street vendor in India The informal sector is largely characterized by several qualities: skills gained outside of a formal education, easy entry (meaning anyone who wishes to join the sector can find some sort of work which will result in cash earnings), a lack of stable employer-employee relationships,[25] and a small scale of operations.[3] Workers who participate in the informal economy are typically classified as employed. The type of work that makes up the informal economy is diverse, particularly in terms of capital invested, technology used, and income generated.[3][25]
The spectrum ranges from self-employment or unpaid family labor[25] to street vendors, shoe shiners, and junk collectors.[3] On the higher end of the spectrum are upper-tier informal activities such as small-scale service or manufacturing businesses, which have more limited entry.[3][25] The upper-tier informal activities have higher set-up costs, which might include complicated licensing regulations, and irregular hours of operation.[25] However, most workers in the informal sector, even those are self-employed or wage workers, do not have access to secure work, benefits, welfare protection, or representation.[4] These features differ from businesses and employees in the formal sector which have regular hours of operation, a regular location and other structured benefits.[25]
According to a 2018 study on informality in Brazil, there are three views to explain the causes of informality. The first view argues that the informal sector is a reservoir of potentially productive entrepreneurs who are kept out of formality by high regulatory costs, most notably entry regulation. The second sees informal forms as "parasitic forms" which are productive enough to survive in the formal sector but choose to remain informal to earn higher profits from the cost advantages of not complying with taxes and regulations. The third argues that informality is a survival strategy for low-skill individuals, who are too unproductive to ever become formal. According to the study the first view corresponds to 9.3 percent of all informal forms, while the second corresponds to 41.9 percent. The remaining forms correspond to low-skill entrepreneurs who are too unproductive to ever become formal. The author suggests that informal forms are to a large extent "parasitic" and therefore eradicating them (e.g., through tighter enforcement) could produce positive effects on the economy. [26]
The most prevalent types of work in the informal economy are home-based workers and street vendors. Home-based workers are more numerous while street vendors are more visible. Combined, the two fields make up about 10–15% of the non-agricultural workforce in developing countries and over 5% of the workforce in developed countries.[4]
While participation in the informal sector can be stigmatized, many workers engage in informal ventures by choice, for either economic or non-economic reasons. Economic motivations include the ability to evade taxes, the freedom to circumvent regulations and licensing requirements, and the capacity to maintain certain government benefits.[27] A study of informal workers in Costa Rica illustrated other economic reasons for staying in the informal sector, as well as non-economic factors. First, they felt they would earn more money through their informal sector work than at a job in the formal economy. Second, even if workers made less money, working in the informal sector offered them more independence, the chance to select their own hours, the opportunity to work outside and near friends, etc. While jobs in the formal economy might bring more security and regularity, or even pay better, the combination of monetary and psychological rewards from working in the informal sector proves appealing for many workers.[28]
The informal sector was historically recognized as an opposition to formal economy, meaning it included all income earning activities beyond legally regulated enterprises. However, this understanding is too inclusive and vague, and certain activities that could be included by that definition are not considered part of the informal economy. As the International Labour Organization defined the informal sector in 2002, the informal sector does not include the criminal economy. While production or employment arrangements in the informal economy may not be strictly legal, the sector produces and distributes legal goods and services. The criminal economy produces illegal goods and services.[4] The informal economy also does not include the reproductive or care economy, which is made up of unpaid domestic work and care activities. The informal economy is part of the market economy, meaning it produces goods and services for sale and profit. Unpaid domestic work and care activities do not contribute to that, and as a result, are not a part of the informal economy.[4]
Statistics Edit
See also: List of countries by share of informal employment in total employment
The Narantuul Market in Ulaanbaatar, Mongolia, colloquially also called Khar Zakh (Black Market) The informal economy under any governing system is diverse and includes small-scaled, occasional members (often street vendors and garbage recyclers) as well as larger, regular enterprises (including transit systems such as that of La Paz, Bolivia). Informal economies include garment workers working from their homes, as well as informally employed personnel of formal enterprises. Employees working in the informal sector can be classified as wage workers, non-wage workers, or a combination of both.[5]
Statistics on the informal economy are unreliable by virtue of the subject, yet they can provide a tentative picture of its relevance. For example, informal employment makes up 58.7% of non-agricultural employment in Middle East – North Africa, 64.6% in Latin America, 79.4% in Asia, and 80.4% in sub-Saharan Africa.[29] If agricultural employment is included, the percentages rise, in some countries like India and many sub-Saharan African countries beyond 90%. Estimates for developed countries are around 15%.[4] In recent surveys, the informal economy in many regions has declined over the past 20 years to 2014. In Africa, the share of the informal economy has decreased to an estimate of around 40% of the economy.[30]
In developing countries, the largest part of informal work, around 70%, is self-employed. Wage employment predominates. The majority of informal economy workers are women. Policies and developments affecting the informal economy have thus a distinctly gendered effect.
Estimated size of countries' informal economy Edit
To estimate the size and development of any underground or shadow economy is quite a challenging task since participants in such economies attempt to hide their behaviors. One must also be very careful to distinguish whether one is attempting to measure the unreported economy, normally associated with tax evasion,[31] or the unrecorded or non-observed economy,[32] associated with the amount of income that is readily excluded from national income and produce accounts due to the difficulty of measurement. There are numerous estimates of tax noncompliance as measured by tax gaps produced by audit methods or by "top down" methods[33] Friedrich Schneider and several co-authors[34] claim to have estimated the size and trend of what they call the "shadow economy" worldwide by a currency demand /MIMIC model approach that treats the "shadow economy" as a latent variable. Trevor S. Breusch has critiqued the work and warned the profession that the literature applying this model to the underground economy abounds with alarming Procrustean tendencies. Various kinds of sliding and scaling of the results are carried out in the name of "benchmarking", although these operations are not always clearly documented. The data are typically transformed in ways that are not only undeclared but have the unfortunate effect of making the results of the study sensitive to the units in which the variables are measured.
The complexity of the estimation procedure, together with its deficient documentation, leave the reader unaware of how these results have been shorted to fit the bed of prior belief. There are many other results in circulation for various countries, for which the data cannot be identified and which are given no more documentation than "own calculations by the MIMIC method". Readers are advised to adjust their valuation of these estimates accordingly.[35]
Edgar L. Feige[36] finds that Schneider's shadow economy "estimates suffer from conceptual flaws, apparent manipulation of results and insufficient documentation for replication, questioning their place in the academic, policy and popular literature".
Comparison of shadow economies in EU countries Edit
German shadow economy 1975–2015, Friedrich Schneider University Linz[37] As of 2013, the total EU shadow economy had been growing to about 1.9 trillion € in preparation of the EURO[38] driven by the motor of the European shadow economy, Germany, which had been generating approx. 350 bn € per year[37] since the establishment of the Single Market in Maastricht 1993, (see diagram on the right). Hence, the EU financial economy had developed an efficient tax haven bank system to protect and manage its growing shadow economy. As per the Financial Secrecy Index (FSI 2013)[39] Germany and some neighbouring countries, ranked among the world's top tax haven countries.
The diagram below shows that national informal economies per capita vary only moderately in most EU countries. This is because market sectors with a high proportion of informal economy (above 45%)[40] like the construction sector or agriculture are rather homogeneously distributed across countries, whereas sectors with a low proportion of informal economy (below 30%)[40] like the finance and business sector (e.g. in Switzerland, Luxembourg), the public service and personal Service Sector (as in Scandinavian countries) as well as the retail industry, wholesale and repair sector are dominant in countries with extremely high GDP per capita i.e. industrially highly developed countries. The diagram also shows that in absolute numbers the shadow economy per capita is related to the wealth of a society (GDP). Generally spoken, the higher the GDP the higher the shadow economy, albeit non-proportional.
There is a direct relationship between high self-employment of a country to its above average shadow economy.[41] In highly industrialized countries where shadow economy (per capita) is high and the huge private sector is shared by an extremely small elite of entrepreneurs a considerable part of tax evasion is practised by a much smaller number of (elite) people. As an example German shadow economy in 2013 was 4.400 € per capita, which was the 9th highest place in EU, whereas according to OECD only 11.2% of employed people were self-employed (place 18).[42] On the other hand, Greece's shadow economy was only 3.900 € p.c (place 13) but self-employment was 36.9% (place 1).
An extreme example of shadow economy camouflaged by the financial market is Luxembourg where the relative annual shadow economy is only 8% of the GDP which is the second lowest percentage (2013) of all EU countries whereas its absolute size (6.800 € per capita) is the highest.
Map of the national shadow economies per capita in EU countries. The red scale represents the numbers displayed by the red bars of the diagram on the left. The total national GDP of EU countries, and its formal and informal (shadow economy) component per capita[38][43]
Social and political implications and issues Edit
Share of employed in informal employment by gender According to development and transition theories, workers in the informal sector typically earn less income, have unstable income, and do not have access to basic protections and services.[44][45] The informal economy is also much larger than most people realize, with women playing a huge role. The working poor, particularly women, are concentrated in the informal economy, and most low-income households rely on the sector to provide for them.[4] However, informal businesses can also lack the potential for growth, trapping employees in menial jobs indefinitely. On the other hand, the informal sector can allow a large proportion of the population to escape extreme poverty and earn an income that is satisfactory for survival.[46] Also, in developed countries, some people who are formally employed may choose to perform part of their work outside of the formal economy, exactly because it delivers them more advantages. This is called 'moonlighting'. They derive social protection, pension and child benefits and the like, from their formal employment, and at the same time have tax and other advantages from working on the side.
From the viewpoint of governments, the informal sector can create a vicious cycle. Being unable to collect taxes from the informal sector, the government may be hindered in financing public services, which in turn makes the sector more attractive. Conversely, some governments view informality as a benefit, enabling excess labor to be absorbed, and mitigating unemployment issues.[46] Recognizing that the informal economy can produce significant goods and services, create necessary jobs, and contribute to imports and exports is critical for governments.[4]
As the work in informal sector is not monitored or registered with the state, its workers are not entitled to social security, nor can they form trade unions. Informal economy workers are more likely to work long hours than workers in the formal economy who are protected by employment laws and regulations. A landmark study conducted by the World Health Organization and the International Labour Organization found that exposure to long working hours caused an estimated 745,000 fatalities from ischemic heart disease and stroke events in 2016.[47] A systematic review and meta-analysis of health services use and health outcomes among informal economy workers, when compared with formal economy workers, found that these workers are less likely to use health services and more likely to have depression, highlighting their substantial health disadvantage.[48]
Gender Edit
A group of Indian women making bamboo products they intend to sell in Dumka, Jharkhand
A girl selling plastic containers for carrying Ganges water, Haridwar, India In developing countries, most of the female non-agricultural labor force is in the informal sector.[49] Female representation in the informal sector is attributed to a variety of factors. One such factor is that employment in the informal sector is the source of employment that is most readily available to women.[50] A 2011 study of poverty in Bangladesh noted that cultural norms, religious seclusion, and illiteracy among women in many developing countries, along with a greater commitment to family responsibilities, prevent women from entering the formal sector.[51]
Major occupations in the informal sector include home-based workers (such as dependent subcontract workers, independent own account producers, and unpaid workers in family businesses) and street vendors, which both are classified in the informal sector.[50] Women tend to make up the greatest portion of the informal sector, often ending up in the most erratic and corrupt segments of the sector.[44] In India, women working in the informal sector often work as ragpickers, domestic workers, coolies, vendors, beauticians, construction laborers, and garment workers.
According to a 2002 study commissioned by the ILO, the connection between employment in the informal economy and being poor is stronger for women than men.[5] While men tend to be over-represented in the top segment of the informal sector, women overpopulate the bottom segment.[5][44] Men are more likely to have larger-scale operations and deal in non-perishable items while few women are employers who hire others.[5] Instead, women are more likely to be involved in smaller-scale operations and trade food items.[5] Women are under-represented in higher-income employment positions in the informal economy and over-represented in lower-income statuses.[5] As a result, the gender gap in terms of wage is higher in the informal sector than the formal sector.[5] Labor markets, household decisions, and states all propagate this gender inequality.[44]
Political power of agents Edit Workers in the informal economy lack a significant voice in government policy.[27] Not only is the political power of informal workers limited, but the existence of the informal economy creates challenges for other politically influential actors. For example, the trade unions struggle to organize the informal economy and often formal workers organized in unions have no immediate interest in improving the status of informal workers due to fears of status loss. Yet the informal economy negatively affects membership and investment in the trade unions. Laborers who might be formally employed and join a union for protection may choose to branch out on their own instead. While this hostile attitude is not always the case, the nature of informal employment - low and irregular income that is not enough to pay union dues, fast-changing decentralized work locations and a self-perception of informal workers as self-employed pose barriers to informal economy trade union organizing.[52] As a result, trade unions are inclined to oppose the informal sector, highlighting the costs and disadvantages of the system. Producers in the formal sector can similarly feel threatened by the informal economy. The flexibility of production, low labor and production costs, and bureaucratic freedom of the informal economy can be seen as consequential competition for formal producers, leading them to challenge and object to that sector. Last, the nature of the informal economy is largely anti-regulation and free of standard taxes, which diminishes the material and political power of government agents. Whatever the significance of these concerns are, the informal sector can shift political power and energies.[27]
Poverty Edit
Informal vendors in Uttar Pradesh The relationship between the informal sectors and poverty certainly is not simple nor does a clear, causal relationship exist. An inverse relationship between an increased informal sector and slower economic growth has been observed though.[44] Average incomes are substantially lower in the informal economy and there is a higher preponderance of impoverished employees working in the informal sector.[53] In addition, workers in the informal economy are less likely to benefit from employment benefits and social protection programs.[4] For instance, a survey in Europe shows that the respondents who have difficulties to pay their household bills have worked informally more often in the past year than those that do not (10% versus 3% of the respondents).[54]
Children and child labour Edit Learn more This section possibly contains original research. (April 2018)
A girl weaving a rug in Egypt Children work in the informal economy in many parts of the world. They often work as scavengers (collecting recyclables from the streets and dump sites), day laborers, cleaners, construction workers, vendors, in seasonal activities, domestic workers, and in small workshops; and often work under hazardous and exploitative conditions. [55][56] It is common for children to work as domestic servants in parts of Latin America and parts of Asia. Such children are very vulnerable to exploitation: often they are not allowed to take breaks or are required to work long hours; many suffer from a lack of access to education, which can contribute to social isolation and a lack of future opportunity. UNICEF considers domestic work to be among the lowest status, and reports that most child domestic workers are live-in workers and are under the round-the-clock control of their employers.[57] Some estimates suggest that among girls, domestic work is the most common form of employment.[58]
During times of economic crisis many families experience unemployment and job loss, thus compelling adolescents to supplement their parents’ income by selling goods or services to contribute to the family economy. At the core, youth must compromise their social activities with other youth, and instead prioritize their participation in the informal economy, thus manufacturing a labor class of adolescents who must take on an adult role within the family. Although it revolves around a negative stigma of deviance, for a majority of individuals, mostly people of color, the informal economy is not an ideal choice but a necessity for survival. Participating in the informal economy is becoming normalized due to the lack of resources available in low-income and marginalized communities, and no matter how hard they have to work, will not advance in the economic hierarchy. When a parent is either unemployed or their job is on low demand, they are compelled to find other methods to provide for themselves but most importantly their children. Yet, due to all the limitations and the lack of jobs, children eventually cooperate with their parent/s and also work for their family's economic well-being. By having to assist in providing for the family, children miss out on their childhood because instead of engaging in activities other youth their age participate in, they are obligated to take on an adult role, put the family first and contribute to the family's well-being.
The participation of adolescents in the informal economy, is a contentious issue due to the restrictions and laws in place for youth have to work. One of the main dilemmas that arise when children engage in this type of work, is that privileged adults, denounce children participation as forced labor. Due to the participant being young, the adults are viewed as “bad” parents because first they cannot provide for their children, second they are stripping the child from a “normal” childhood, and third, child labor is frowned upon. Furthermore, certain people believe that children should not be working because children do not know the risks and the pressure of working and having so much responsibility, but the reality is that for most families, the children are not being forced to work, rather they choose to help sustain their family’s income. The youth become forced by their circumstances, meaning that because of their conditions, they do not have much of a choice. Youth have the capability to acknowledge their family’s financial limitations and many feel that it is their moral obligation to contribute to the family income. Thus, they end up working without asking for an allowance or wage, because kids recognize that their parents cannot bring home enough income alone, thus their contribution is necessary and their involvement becomes instrumental for their family's economic survival.[59]
Emir Estrada and Pierrette Hondagneu-Sotelo have gone to predominantly Latino communities of Los Angeles, CA. to observe the daily actions of street vendors. They analyze why adults participate in the informal economy. Although it revolves around a negative stigma of deviance, for a majority of individuals, the informal economy is not an ideal choice but an action necessary for survival. While witnessing the constant struggle of Latino individuals to make ends meet and trying to earn money to put food on the table, they witnessed how the participation of children either benefits the family or even hurt it. Through field notes derived from their participation, Estrada states, “children are not the ‘baggage’ that adult immigrants simply bring along. In the case of street vendors, we see that they are also contributors to family processes”.[60] Estrada's findings demonstrate that children are working in order to help contribute to their household income, but most importantly, they play a vital role when it comes to language barriers. The kids are not simply workers, they achieve an understanding of how to manage a business and commerce.
Expansion and growth Edit
The division of the economy into formal and informal sectors has a long heritage. Arthur Lewis in his seminal work Economic Development with Unlimited Supply of Labour, published in the 1950s, was the celebrated paradigm of development for the newly independent countries in the 1950s and 1960s. The model assumed that the unorganized sector with the surplus labour will gradually disappear as the surplus labour gets absorbed in the organised sector. The Lewis model is drawn from the experience of capitalist countries in which the share of agriculture and unorganized sector showed a spectacular decline, but it didn't prove to be true in many developing countries, including India. On the other hand, probabilistic migration models developed by Harris and Todaro in the 1970s envisaged the phenomenon of the informal sector as a transitional phase through which migrants move to the urban centers before shifting to formal sector employment. Hence it is not a surprise to see policy invisibility in the informal sector. Curiously, the informal sector does not find a permanent place in the Marxian theory since they anticipate the destruction of the pre-capitalist structure as a result of the aggressive growth of capitalism. To them, in the course of development, 'the small fish is being eaten by the big fish'. Therefore, neither in the Marxian theory nor in the classical economic theory, the unorganized sector holds a permanent place in the economic literature.[61]
The informal sector has been expanding as more economies have started to liberalize.[44] This pattern of expansion began in the 1960s when a lot of developing countries didn't create enough formal jobs in their economic development plans, which led to the formation of an informal sector that didn't solely include marginal work and actually contained profitable opportunities.[5] In the 1980s, the sector grew alongside formal industrial sectors. In the 1990s, an increase in global communication and competition led to a restructuring of production and distribution, often relying more heavily on the informal sector.[5]
Over the past decade, the informal economy is said to account for more than half of the newly created jobs in Latin America. In Africa it accounts for around eighty percent.[5] Many explanations exist as to why the informal sector has been expanding in the developing world throughout the past few decades. It is possible that the kind of development that has been occurring has failed to support the increased labor force in a formal manner. Expansion can also be explained by the increased subcontracting due to globalization and economic liberalization. Finally, employers could be turning toward the informal sector to lower costs and cope with increased competition.
Such extreme competition between industrial countries occurred after the expansion of the EC to markets of the then new member countries Greece, Spain and Portugal, and particularly after the establishment of the Single European Market (1993, Treaty of Maastricht). Mainly for French and German corporations it led to systematic increase of their informal sectors under liberalized tax laws, thus fostering their mutual competitiveness and against small local competitors. The continuous systematic increase of the German informal sector was stopped only after the establishment of the EURO and the execution of the Summer Olympic Games 2004,[37] which has been the first and (up to now) only in the Single Market. Since then the German informal sector stabilized on the achieved 350 bn € level which signifies an extremely high tax evasion for a country with 90% salary-employment. According to the Swedish International Development Cooperation Agency (SIDA), the key drivers for the growth of the informal economy in the twenty-first century include:[3] limited absorption of labour, particularly in countries with high rates of population or urbanisation excessive cost and regulatory barriers of entry into the formal economy, often motivated by corruption weak institutions, limiting education and training opportunities as well as infrastructure development increasing demand for low-cost goods and services migration motivated by economic hardship and poverty difficulties faced by women in gaining formal employment Historically, development theories have asserted that as economies mature and develop, economic activity will shift from the informal to the formal sphere. In fact, much of the economic development discourse is centered around the notion that formalization indicates how developed a country's economy is; for more on this discussion see the page on fiscal capacity.[62] However, evidence suggests that the progression from informal to formal sectors is not universally applicable. While the characteristics of a formalized economy – full employment and an extensive welfare system – have served as effective methods of organizing work and welfare for some nations, such a structure is not necessarily inevitable or ideal. Indeed, development appears to be heterogeneous in different localities, regions, and nations, as well as the type of work practiced.[3][62] For example, at one end of the spectrum of the type of work practiced in the informal economy are small-scale businesses and manufacturing; on the other "street vendors, shoe shiners, junk collectors and domestic servants."[3] Regardless of how the informal economy develops, its continued growth that it cannot be considered a temporary phenomenon.[3]
Black market sellers offer watches for sale to US soldiers in Baghdad in 2004.
Informal economy: Haircut on a sidewalk in Vietnam.
In many cases, unlike the formal economy, activities of the informal economy are not included in a country's gross national product (GNP) or gross domestic product (GDP).[3] However, Italy has included estimates of informal activity in their GDP calculations since 1987, which swells their GDP by an estimated 18%[6] and in 2014, a number of European countries formally changed their GDP calculations to include prostitution and narcotics sales in their official GDP statistics, in line with international accounting standards, prompting an increase between 3-7%.[7] The informal sector can be described as a grey market in labour. Other concepts that can be characterized as informal sector can include the black market (shadow economy, underground economy), agorism, and System D. Associated idioms include "under the table", "off the books", and "working for cash".
Definition Edit
Ice cream street vendor in Mexico.
Black market peddler on graffiti, Kharkiv The original use of the term 'informal sector' is attributed to the economic development model put forward in 1955 by W. Arthur Lewis, used to describe employment or livelihood generation primarily within the developing world. It was used to describe a type of employment that was viewed as falling outside of the modern industrial sector.[8] An alternative definition from 2007 uses job security as the measure of formality, defining participants in the informal economy as those "who do not have employment security, work security and social security".[9] While both of these definitions imply a lack of choice or agency in involvement with the informal economy, participation may also be driven by a wish to avoid regulation or taxation. This may manifest as unreported employment, hidden from the state for tax, social security or labour law purposes, but legal in all other aspects.[10] In 2016 Edgar L. Feige proposed a taxonomy for describing unobserved economies including the informal economy as being characterized by some form of "non-compliant behavior with an institutional set of rules".[11] He argues that circumvention of labor market regulations specifying minimum wages, working conditions, social security, unemployment and disability benefits gives rise to an informal economy, which deprives some workers of deserved benefits while conveying undeserved benefits to others.
The term is also useful in describing and accounting for forms of shelter or living arrangements that are similarly unlawful, unregulated, or not afforded protection of the state. 'Informal economy' is increasingly[when?] replacing 'informal sector' as the preferred descriptor for this activity.[3]
Informality, both in housing and livelihood generation has historically been seen as a social ill, and described either in terms of what participant's lack, or wish to avoid. In 2009, the Dutch sociologist Saskia Sassen viewed the new 'informal' sector as the product and driver of advanced capitalism and the site of the most entrepreneurial aspects of the urban economy, led by creative professionals such as artists, architects, designers and software developers.[12] While this manifestation of the informal sector remains largely a feature of developed countries, increasingly systems are emerging to facilitate similarly qualified people in developing countries to participate.[13]
History Edit
Governments have tried to regulate aspects of their economies for as long as surplus wealth has existed which is at least as early as Sumer. Yet no such regulation has ever been wholly enforceable.[citation needed]
Daily life of the informal economy in the streets of Bolivia. Archaeological and anthropological evidence strongly suggests that people of all societies regularly adjust their activity within economic systems in attempt to evade regulations.[citation needed] Therefore, if informal economic activity is that which goes unregulated in an otherwise regulated system then informal economies are as old as their formal counterparts, if not older.[citation needed] The term itself, however, is much more recent.[citation needed]
The optimism of the modernization theory school of development had led people in the 1950s and 1960s to believe that traditional forms of work and production would disappear as a result of economic progress in developing countries.[citation needed] As this optimism proved to be unfounded, scholars turned to study more closely what was then called the traditional sector and found that the sector had not only persisted, but in fact expanded to encompass new developments.[citation needed] In accepting that these forms of productions were there to stay, scholars and some international organizations quickly took up the term informal sector (later known as the informal economy or just informality). The term Informal income opportunities is credited to the British anthropologist Keith Hart in a 1971 study on Ghana published in 1973,[14] and was coined by the International Labour Organization in a widely read study on Kenya in 1972.[citation needed]
In his 1989 book The Underground Economies: Tax Evasion and Information Distortion, Edgar L. Feige examined the economic implications of a shift of economic activity from the observed to the non-observed sector of the economy. Such a shift not only reduces the government's ability to collect revenues, it can also bias the nation's information systems and therefore lead to misguided policy decisions. The book examines alternative means of estimating the size of various unobserved economies and examines their consequences in both socialist and market oriented economies.[15] Feige goes on to develop a taxonomic framework that clarifies the distinctions between informal, illegal, unreported and unrecorded economies, and identifies their conceptual and empirical linkages and the alternative means of measuring their size and trends.[16] Since then, the informal sector has become an increasingly popular subject of investigation in economics, sociology, anthropology and urban planning. With the turn towards so called post-fordist modes of production in the advanced developing countries, many workers were forced out of their formal sector work and into informal employment. In a 2005 collection of articles, The Informal Economy. Studies in Advanced and Less Developed Countries, the existence of an informal economy in all countries was demonstrated with case studies ranging from New York City and Madrid to Uruguay and Colombia.[17]
Black market in Shinbashi, Japan, 1946 An influential book on the informal economy is Hernando de Soto's El otro sendero (1986),[18] which was published in English in 1989 as The Other Path with a preface by Peruvian writer Mario Vargas Llosa.[19] De Soto and his team argued that excessive regulation in the Peruvian and other Latin American economies forced a large part of the economy into informality and thus prevented economic development. While accusing the ruling class of 20th century mercantilism, de Soto admired the entrepreneurial spirit of the informal economy. In a widely cited experiment, his team tried to legally register a small garment factory in Lima. This took more than 100 administrative steps and almost a year of full-time work. Feige's review of the Other Path places the work in the context of the informal economy literature.[20] Whereas de Soto's work is popular with policymakers and champions of free market policies like The Economist, some scholars of the informal economy have criticized it both for methodological flaws and normative bias.[21]
In the second half of the 1990s many scholars started to consciously use the term "informal economy" instead of "informal sector" to refer to a broader concept which includes enterprises as well as employment in developing, transition, and advanced industrialized economies.[citation needed]
Among the surveys about the size and development of the shadow economy (mostly expressed in percent of official GDP) are those by Feige (1989), and Schneider and Enste (2000) with an intensive discussion about the various estimation procedures of the size of the shadow economy as well as a critical evaluation of the size of the shadow economy and the consequences of the shadow economy on the official one.[22][23] Feige´s most recent survey paper on the subject from 2016 reviewed the meaning and measurement of unobserved economies and is particularly critical of estimates of the size of the so-called shadow economy which employ Multiple Indicator multiple cause methods, which treat the shadow economy as a latent variable.[24]
Characteristics Edit
Waste picker in Indonesia
Street vendor in Colombia
Street vendor in India The informal sector is largely characterized by several qualities: skills gained outside of a formal education, easy entry (meaning anyone who wishes to join the sector can find some sort of work which will result in cash earnings), a lack of stable employer-employee relationships,[25] and a small scale of operations.[3] Workers who participate in the informal economy are typically classified as employed. The type of work that makes up the informal economy is diverse, particularly in terms of capital invested, technology used, and income generated.[3][25]
The spectrum ranges from self-employment or unpaid family labor[25] to street vendors, shoe shiners, and junk collectors.[3] On the higher end of the spectrum are upper-tier informal activities such as small-scale service or manufacturing businesses, which have more limited entry.[3][25] The upper-tier informal activities have higher set-up costs, which might include complicated licensing regulations, and irregular hours of operation.[25] However, most workers in the informal sector, even those are self-employed or wage workers, do not have access to secure work, benefits, welfare protection, or representation.[4] These features differ from businesses and employees in the formal sector which have regular hours of operation, a regular location and other structured benefits.[25]
According to a 2018 study on informality in Brazil, there are three views to explain the causes of informality. The first view argues that the informal sector is a reservoir of potentially productive entrepreneurs who are kept out of formality by high regulatory costs, most notably entry regulation. The second sees informal forms as "parasitic forms" which are productive enough to survive in the formal sector but choose to remain informal to earn higher profits from the cost advantages of not complying with taxes and regulations. The third argues that informality is a survival strategy for low-skill individuals, who are too unproductive to ever become formal. According to the study the first view corresponds to 9.3 percent of all informal forms, while the second corresponds to 41.9 percent. The remaining forms correspond to low-skill entrepreneurs who are too unproductive to ever become formal. The author suggests that informal forms are to a large extent "parasitic" and therefore eradicating them (e.g., through tighter enforcement) could produce positive effects on the economy. [26]
The most prevalent types of work in the informal economy are home-based workers and street vendors. Home-based workers are more numerous while street vendors are more visible. Combined, the two fields make up about 10–15% of the non-agricultural workforce in developing countries and over 5% of the workforce in developed countries.[4]
While participation in the informal sector can be stigmatized, many workers engage in informal ventures by choice, for either economic or non-economic reasons. Economic motivations include the ability to evade taxes, the freedom to circumvent regulations and licensing requirements, and the capacity to maintain certain government benefits.[27] A study of informal workers in Costa Rica illustrated other economic reasons for staying in the informal sector, as well as non-economic factors. First, they felt they would earn more money through their informal sector work than at a job in the formal economy. Second, even if workers made less money, working in the informal sector offered them more independence, the chance to select their own hours, the opportunity to work outside and near friends, etc. While jobs in the formal economy might bring more security and regularity, or even pay better, the combination of monetary and psychological rewards from working in the informal sector proves appealing for many workers.[28]
The informal sector was historically recognized as an opposition to formal economy, meaning it included all income earning activities beyond legally regulated enterprises. However, this understanding is too inclusive and vague, and certain activities that could be included by that definition are not considered part of the informal economy. As the International Labour Organization defined the informal sector in 2002, the informal sector does not include the criminal economy. While production or employment arrangements in the informal economy may not be strictly legal, the sector produces and distributes legal goods and services. The criminal economy produces illegal goods and services.[4] The informal economy also does not include the reproductive or care economy, which is made up of unpaid domestic work and care activities. The informal economy is part of the market economy, meaning it produces goods and services for sale and profit. Unpaid domestic work and care activities do not contribute to that, and as a result, are not a part of the informal economy.[4]
Statistics Edit
See also: List of countries by share of informal employment in total employment
The Narantuul Market in Ulaanbaatar, Mongolia, colloquially also called Khar Zakh (Black Market) The informal economy under any governing system is diverse and includes small-scaled, occasional members (often street vendors and garbage recyclers) as well as larger, regular enterprises (including transit systems such as that of La Paz, Bolivia). Informal economies include garment workers working from their homes, as well as informally employed personnel of formal enterprises. Employees working in the informal sector can be classified as wage workers, non-wage workers, or a combination of both.[5]
Statistics on the informal economy are unreliable by virtue of the subject, yet they can provide a tentative picture of its relevance. For example, informal employment makes up 58.7% of non-agricultural employment in Middle East – North Africa, 64.6% in Latin America, 79.4% in Asia, and 80.4% in sub-Saharan Africa.[29] If agricultural employment is included, the percentages rise, in some countries like India and many sub-Saharan African countries beyond 90%. Estimates for developed countries are around 15%.[4] In recent surveys, the informal economy in many regions has declined over the past 20 years to 2014. In Africa, the share of the informal economy has decreased to an estimate of around 40% of the economy.[30]
In developing countries, the largest part of informal work, around 70%, is self-employed. Wage employment predominates. The majority of informal economy workers are women. Policies and developments affecting the informal economy have thus a distinctly gendered effect.
Estimated size of countries' informal economy Edit
To estimate the size and development of any underground or shadow economy is quite a challenging task since participants in such economies attempt to hide their behaviors. One must also be very careful to distinguish whether one is attempting to measure the unreported economy, normally associated with tax evasion,[31] or the unrecorded or non-observed economy,[32] associated with the amount of income that is readily excluded from national income and produce accounts due to the difficulty of measurement. There are numerous estimates of tax noncompliance as measured by tax gaps produced by audit methods or by "top down" methods[33] Friedrich Schneider and several co-authors[34] claim to have estimated the size and trend of what they call the "shadow economy" worldwide by a currency demand /MIMIC model approach that treats the "shadow economy" as a latent variable. Trevor S. Breusch has critiqued the work and warned the profession that the literature applying this model to the underground economy abounds with alarming Procrustean tendencies. Various kinds of sliding and scaling of the results are carried out in the name of "benchmarking", although these operations are not always clearly documented. The data are typically transformed in ways that are not only undeclared but have the unfortunate effect of making the results of the study sensitive to the units in which the variables are measured.
The complexity of the estimation procedure, together with its deficient documentation, leave the reader unaware of how these results have been shorted to fit the bed of prior belief. There are many other results in circulation for various countries, for which the data cannot be identified and which are given no more documentation than "own calculations by the MIMIC method". Readers are advised to adjust their valuation of these estimates accordingly.[35]
Edgar L. Feige[36] finds that Schneider's shadow economy "estimates suffer from conceptual flaws, apparent manipulation of results and insufficient documentation for replication, questioning their place in the academic, policy and popular literature".
Comparison of shadow economies in EU countries Edit
German shadow economy 1975–2015, Friedrich Schneider University Linz[37] As of 2013, the total EU shadow economy had been growing to about 1.9 trillion € in preparation of the EURO[38] driven by the motor of the European shadow economy, Germany, which had been generating approx. 350 bn € per year[37] since the establishment of the Single Market in Maastricht 1993, (see diagram on the right). Hence, the EU financial economy had developed an efficient tax haven bank system to protect and manage its growing shadow economy. As per the Financial Secrecy Index (FSI 2013)[39] Germany and some neighbouring countries, ranked among the world's top tax haven countries.
The diagram below shows that national informal economies per capita vary only moderately in most EU countries. This is because market sectors with a high proportion of informal economy (above 45%)[40] like the construction sector or agriculture are rather homogeneously distributed across countries, whereas sectors with a low proportion of informal economy (below 30%)[40] like the finance and business sector (e.g. in Switzerland, Luxembourg), the public service and personal Service Sector (as in Scandinavian countries) as well as the retail industry, wholesale and repair sector are dominant in countries with extremely high GDP per capita i.e. industrially highly developed countries. The diagram also shows that in absolute numbers the shadow economy per capita is related to the wealth of a society (GDP). Generally spoken, the higher the GDP the higher the shadow economy, albeit non-proportional.
There is a direct relationship between high self-employment of a country to its above average shadow economy.[41] In highly industrialized countries where shadow economy (per capita) is high and the huge private sector is shared by an extremely small elite of entrepreneurs a considerable part of tax evasion is practised by a much smaller number of (elite) people. As an example German shadow economy in 2013 was 4.400 € per capita, which was the 9th highest place in EU, whereas according to OECD only 11.2% of employed people were self-employed (place 18).[42] On the other hand, Greece's shadow economy was only 3.900 € p.c (place 13) but self-employment was 36.9% (place 1).
An extreme example of shadow economy camouflaged by the financial market is Luxembourg where the relative annual shadow economy is only 8% of the GDP which is the second lowest percentage (2013) of all EU countries whereas its absolute size (6.800 € per capita) is the highest.
Map of the national shadow economies per capita in EU countries. The red scale represents the numbers displayed by the red bars of the diagram on the left. The total national GDP of EU countries, and its formal and informal (shadow economy) component per capita[38][43]
Social and political implications and issues Edit
Share of employed in informal employment by gender According to development and transition theories, workers in the informal sector typically earn less income, have unstable income, and do not have access to basic protections and services.[44][45] The informal economy is also much larger than most people realize, with women playing a huge role. The working poor, particularly women, are concentrated in the informal economy, and most low-income households rely on the sector to provide for them.[4] However, informal businesses can also lack the potential for growth, trapping employees in menial jobs indefinitely. On the other hand, the informal sector can allow a large proportion of the population to escape extreme poverty and earn an income that is satisfactory for survival.[46] Also, in developed countries, some people who are formally employed may choose to perform part of their work outside of the formal economy, exactly because it delivers them more advantages. This is called 'moonlighting'. They derive social protection, pension and child benefits and the like, from their formal employment, and at the same time have tax and other advantages from working on the side.
From the viewpoint of governments, the informal sector can create a vicious cycle. Being unable to collect taxes from the informal sector, the government may be hindered in financing public services, which in turn makes the sector more attractive. Conversely, some governments view informality as a benefit, enabling excess labor to be absorbed, and mitigating unemployment issues.[46] Recognizing that the informal economy can produce significant goods and services, create necessary jobs, and contribute to imports and exports is critical for governments.[4]
As the work in informal sector is not monitored or registered with the state, its workers are not entitled to social security, nor can they form trade unions. Informal economy workers are more likely to work long hours than workers in the formal economy who are protected by employment laws and regulations. A landmark study conducted by the World Health Organization and the International Labour Organization found that exposure to long working hours caused an estimated 745,000 fatalities from ischemic heart disease and stroke events in 2016.[47] A systematic review and meta-analysis of health services use and health outcomes among informal economy workers, when compared with formal economy workers, found that these workers are less likely to use health services and more likely to have depression, highlighting their substantial health disadvantage.[48]
Gender Edit
A group of Indian women making bamboo products they intend to sell in Dumka, Jharkhand
A girl selling plastic containers for carrying Ganges water, Haridwar, India In developing countries, most of the female non-agricultural labor force is in the informal sector.[49] Female representation in the informal sector is attributed to a variety of factors. One such factor is that employment in the informal sector is the source of employment that is most readily available to women.[50] A 2011 study of poverty in Bangladesh noted that cultural norms, religious seclusion, and illiteracy among women in many developing countries, along with a greater commitment to family responsibilities, prevent women from entering the formal sector.[51]
Major occupations in the informal sector include home-based workers (such as dependent subcontract workers, independent own account producers, and unpaid workers in family businesses) and street vendors, which both are classified in the informal sector.[50] Women tend to make up the greatest portion of the informal sector, often ending up in the most erratic and corrupt segments of the sector.[44] In India, women working in the informal sector often work as ragpickers, domestic workers, coolies, vendors, beauticians, construction laborers, and garment workers.
According to a 2002 study commissioned by the ILO, the connection between employment in the informal economy and being poor is stronger for women than men.[5] While men tend to be over-represented in the top segment of the informal sector, women overpopulate the bottom segment.[5][44] Men are more likely to have larger-scale operations and deal in non-perishable items while few women are employers who hire others.[5] Instead, women are more likely to be involved in smaller-scale operations and trade food items.[5] Women are under-represented in higher-income employment positions in the informal economy and over-represented in lower-income statuses.[5] As a result, the gender gap in terms of wage is higher in the informal sector than the formal sector.[5] Labor markets, household decisions, and states all propagate this gender inequality.[44]
Political power of agents Edit Workers in the informal economy lack a significant voice in government policy.[27] Not only is the political power of informal workers limited, but the existence of the informal economy creates challenges for other politically influential actors. For example, the trade unions struggle to organize the informal economy and often formal workers organized in unions have no immediate interest in improving the status of informal workers due to fears of status loss. Yet the informal economy negatively affects membership and investment in the trade unions. Laborers who might be formally employed and join a union for protection may choose to branch out on their own instead. While this hostile attitude is not always the case, the nature of informal employment - low and irregular income that is not enough to pay union dues, fast-changing decentralized work locations and a self-perception of informal workers as self-employed pose barriers to informal economy trade union organizing.[52] As a result, trade unions are inclined to oppose the informal sector, highlighting the costs and disadvantages of the system. Producers in the formal sector can similarly feel threatened by the informal economy. The flexibility of production, low labor and production costs, and bureaucratic freedom of the informal economy can be seen as consequential competition for formal producers, leading them to challenge and object to that sector. Last, the nature of the informal economy is largely anti-regulation and free of standard taxes, which diminishes the material and political power of government agents. Whatever the significance of these concerns are, the informal sector can shift political power and energies.[27]
Poverty Edit
Informal vendors in Uttar Pradesh The relationship between the informal sectors and poverty certainly is not simple nor does a clear, causal relationship exist. An inverse relationship between an increased informal sector and slower economic growth has been observed though.[44] Average incomes are substantially lower in the informal economy and there is a higher preponderance of impoverished employees working in the informal sector.[53] In addition, workers in the informal economy are less likely to benefit from employment benefits and social protection programs.[4] For instance, a survey in Europe shows that the respondents who have difficulties to pay their household bills have worked informally more often in the past year than those that do not (10% versus 3% of the respondents).[54]
Children and child labour Edit Learn more This section possibly contains original research. (April 2018)
A girl weaving a rug in Egypt Children work in the informal economy in many parts of the world. They often work as scavengers (collecting recyclables from the streets and dump sites), day laborers, cleaners, construction workers, vendors, in seasonal activities, domestic workers, and in small workshops; and often work under hazardous and exploitative conditions. [55][56] It is common for children to work as domestic servants in parts of Latin America and parts of Asia. Such children are very vulnerable to exploitation: often they are not allowed to take breaks or are required to work long hours; many suffer from a lack of access to education, which can contribute to social isolation and a lack of future opportunity. UNICEF considers domestic work to be among the lowest status, and reports that most child domestic workers are live-in workers and are under the round-the-clock control of their employers.[57] Some estimates suggest that among girls, domestic work is the most common form of employment.[58]
During times of economic crisis many families experience unemployment and job loss, thus compelling adolescents to supplement their parents’ income by selling goods or services to contribute to the family economy. At the core, youth must compromise their social activities with other youth, and instead prioritize their participation in the informal economy, thus manufacturing a labor class of adolescents who must take on an adult role within the family. Although it revolves around a negative stigma of deviance, for a majority of individuals, mostly people of color, the informal economy is not an ideal choice but a necessity for survival. Participating in the informal economy is becoming normalized due to the lack of resources available in low-income and marginalized communities, and no matter how hard they have to work, will not advance in the economic hierarchy. When a parent is either unemployed or their job is on low demand, they are compelled to find other methods to provide for themselves but most importantly their children. Yet, due to all the limitations and the lack of jobs, children eventually cooperate with their parent/s and also work for their family's economic well-being. By having to assist in providing for the family, children miss out on their childhood because instead of engaging in activities other youth their age participate in, they are obligated to take on an adult role, put the family first and contribute to the family's well-being.
The participation of adolescents in the informal economy, is a contentious issue due to the restrictions and laws in place for youth have to work. One of the main dilemmas that arise when children engage in this type of work, is that privileged adults, denounce children participation as forced labor. Due to the participant being young, the adults are viewed as “bad” parents because first they cannot provide for their children, second they are stripping the child from a “normal” childhood, and third, child labor is frowned upon. Furthermore, certain people believe that children should not be working because children do not know the risks and the pressure of working and having so much responsibility, but the reality is that for most families, the children are not being forced to work, rather they choose to help sustain their family’s income. The youth become forced by their circumstances, meaning that because of their conditions, they do not have much of a choice. Youth have the capability to acknowledge their family’s financial limitations and many feel that it is their moral obligation to contribute to the family income. Thus, they end up working without asking for an allowance or wage, because kids recognize that their parents cannot bring home enough income alone, thus their contribution is necessary and their involvement becomes instrumental for their family's economic survival.[59]
Emir Estrada and Pierrette Hondagneu-Sotelo have gone to predominantly Latino communities of Los Angeles, CA. to observe the daily actions of street vendors. They analyze why adults participate in the informal economy. Although it revolves around a negative stigma of deviance, for a majority of individuals, the informal economy is not an ideal choice but an action necessary for survival. While witnessing the constant struggle of Latino individuals to make ends meet and trying to earn money to put food on the table, they witnessed how the participation of children either benefits the family or even hurt it. Through field notes derived from their participation, Estrada states, “children are not the ‘baggage’ that adult immigrants simply bring along. In the case of street vendors, we see that they are also contributors to family processes”.[60] Estrada's findings demonstrate that children are working in order to help contribute to their household income, but most importantly, they play a vital role when it comes to language barriers. The kids are not simply workers, they achieve an understanding of how to manage a business and commerce.
Expansion and growth Edit
The division of the economy into formal and informal sectors has a long heritage. Arthur Lewis in his seminal work Economic Development with Unlimited Supply of Labour, published in the 1950s, was the celebrated paradigm of development for the newly independent countries in the 1950s and 1960s. The model assumed that the unorganized sector with the surplus labour will gradually disappear as the surplus labour gets absorbed in the organised sector. The Lewis model is drawn from the experience of capitalist countries in which the share of agriculture and unorganized sector showed a spectacular decline, but it didn't prove to be true in many developing countries, including India. On the other hand, probabilistic migration models developed by Harris and Todaro in the 1970s envisaged the phenomenon of the informal sector as a transitional phase through which migrants move to the urban centers before shifting to formal sector employment. Hence it is not a surprise to see policy invisibility in the informal sector. Curiously, the informal sector does not find a permanent place in the Marxian theory since they anticipate the destruction of the pre-capitalist structure as a result of the aggressive growth of capitalism. To them, in the course of development, 'the small fish is being eaten by the big fish'. Therefore, neither in the Marxian theory nor in the classical economic theory, the unorganized sector holds a permanent place in the economic literature.[61]
The informal sector has been expanding as more economies have started to liberalize.[44] This pattern of expansion began in the 1960s when a lot of developing countries didn't create enough formal jobs in their economic development plans, which led to the formation of an informal sector that didn't solely include marginal work and actually contained profitable opportunities.[5] In the 1980s, the sector grew alongside formal industrial sectors. In the 1990s, an increase in global communication and competition led to a restructuring of production and distribution, often relying more heavily on the informal sector.[5]
Over the past decade, the informal economy is said to account for more than half of the newly created jobs in Latin America. In Africa it accounts for around eighty percent.[5] Many explanations exist as to why the informal sector has been expanding in the developing world throughout the past few decades. It is possible that the kind of development that has been occurring has failed to support the increased labor force in a formal manner. Expansion can also be explained by the increased subcontracting due to globalization and economic liberalization. Finally, employers could be turning toward the informal sector to lower costs and cope with increased competition.
Such extreme competition between industrial countries occurred after the expansion of the EC to markets of the then new member countries Greece, Spain and Portugal, and particularly after the establishment of the Single European Market (1993, Treaty of Maastricht). Mainly for French and German corporations it led to systematic increase of their informal sectors under liberalized tax laws, thus fostering their mutual competitiveness and against small local competitors. The continuous systematic increase of the German informal sector was stopped only after the establishment of the EURO and the execution of the Summer Olympic Games 2004,[37] which has been the first and (up to now) only in the Single Market. Since then the German informal sector stabilized on the achieved 350 bn € level which signifies an extremely high tax evasion for a country with 90% salary-employment. According to the Swedish International Development Cooperation Agency (SIDA), the key drivers for the growth of the informal economy in the twenty-first century include:[3] limited absorption of labour, particularly in countries with high rates of population or urbanisation excessive cost and regulatory barriers of entry into the formal economy, often motivated by corruption weak institutions, limiting education and training opportunities as well as infrastructure development increasing demand for low-cost goods and services migration motivated by economic hardship and poverty difficulties faced by women in gaining formal employment Historically, development theories have asserted that as economies mature and develop, economic activity will shift from the informal to the formal sphere. In fact, much of the economic development discourse is centered around the notion that formalization indicates how developed a country's economy is; for more on this discussion see the page on fiscal capacity.[62] However, evidence suggests that the progression from informal to formal sectors is not universally applicable. While the characteristics of a formalized economy – full employment and an extensive welfare system – have served as effective methods of organizing work and welfare for some nations, such a structure is not necessarily inevitable or ideal. Indeed, development appears to be heterogeneous in different localities, regions, and nations, as well as the type of work practiced.[3][62] For example, at one end of the spectrum of the type of work practiced in the informal economy are small-scale businesses and manufacturing; on the other "street vendors, shoe shiners, junk collectors and domestic servants."[3] Regardless of how the informal economy develops, its continued growth that it cannot be considered a temporary phenomenon.[3]
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