The International Labour Organization's 2018 estimate — that approximately 2 billion workers, or 61% of the global labor force, work informally — remains the most consequential single number in labor policy and the least operationalized. The figure breaks down to roughly 85% of African workers, 68% of Asia-Pacific workers, 53% of Latin American workers, and even 18% of workers in the developed economies once gig and platform work are included. The standard policy frame treats informality as a transitional category that economies will outgrow with development. The empirical record refutes this. India's informal share has been roughly flat for two decades despite rapid GDP growth. Brazil's formalization gains under Bolsa Família and the 2008 Microempreendedor Individual reform were real but plateaued. Most of the gig-economy expansion in OECD countries is a re-informalization, not the reverse.
The argument here is that the dominant advocacy framing — "bring informal workers into formal employment" — is the wrong unit of analysis. The right unit is portability: benefits, identity, training credit, and bargaining structure that travel with the worker regardless of which employer or platform she is attached to in any given month. Collective action is the lever that achieves portability; formal employment is one possible output but not the only valuable one.
What the data actually shows about informal work
The most rigorous descriptive work on global informal labor comes from WIEGO (Women in Informal Employment: Globalizing and Organizing) and the ILO. Three findings from the body of work are worth holding onto.
First, informality is overwhelmingly female and disproportionately concentrated in care work, domestic work, street vending, waste picking, and home-based production. The WIEGO Network's research, including work led by Marty Chen and Françoise Carré, consistently shows that women's informal-employment rates exceed men's in nearly every region.
Second, the income penalty from informality is real but smaller than commonly assumed. World Bank labor-market research has shown that controlled-for-skill informal-formal wage gaps are often in the 10–25% range, not the order-of-magnitude differences sometimes implied. The bigger penalty is in benefits, social-insurance coverage, and exposure to income volatility — not headline wages.
Third, informal workers' biggest single demand, in surveys conducted across continents, is not formalization per se. It is recognition: being legally permitted to work where they work (street vendors, waste pickers, home-based workers), being able to access banking and social-protection systems, and being protected from confiscation and harassment by local enforcement.
What's worked: the SEWA-to-Convention-189 pipeline
The most replicable success story in informal-worker collective action is the Self-Employed Women's Association in India, founded by Ela Bhatt in 1972. SEWA now has roughly 2.5 million members. Its operating model — combining union-style collective representation, a cooperative bank, a cooperative health insurance scheme, and political advocacy — has been studied and partially replicated across South Asia and East Africa. What SEWA demonstrated is that collective action for informal workers does not have to wait for state recognition; it can produce parallel benefit infrastructure that, once large enough, becomes politically un-ignorable.
The international policy fruit of decades of organizing along these lines was ILO Convention 189 on Decent Work for Domestic Workers, adopted in 2011. As of 2024, the convention has been ratified by 36 countries. The U.S. has not ratified it, but California, Massachusetts, New York, and several other states have enacted Domestic Workers' Bills of Rights that parallel its provisions. The National Domestic Workers Alliance, founded in 2007 under Ai-jen Poo's leadership, has been the central U.S. organizing vehicle and has roughly 350,000 members and affiliates.
Waste-picker formalization, often cited as a separate success, has followed a similar pattern. Brazil's recognition of catadores under the 2010 National Solid Waste Policy, Colombia's Constitutional Court ruling in 2011 requiring Bogotá to integrate waste pickers into the municipal recycling system, and the Indian state of Maharashtra's KKPKP cooperative in Pune are well-documented cases. The Inclusive Recycling literature, including work by Sonia Dias and others affiliated with WIEGO, has built a credible playbook.
The portable-benefits frontier
For the U.S. and other developed economies, the most actionable informal-worker policy lever is portable benefits — social insurance and benefit structures that attach to the worker rather than the employer.
The U.S. policy landscape now has three meaningful precedents. Washington State's 2023 portable-benefits law for gig workers, brokered between Uber, Lyft, DoorDash, Instacart, and the SEIU, requires platforms to contribute to a worker-level benefits fund. New York's Black Car Fund has operated since 1999 as a per-trip-surcharge-funded benefits pool for for-hire vehicle drivers. The Affordable Care Act, by decoupling health insurance from employment for a large share of the workforce, was the largest portable-benefits reform in U.S. history even though it is rarely framed that way.
The EU's Platform Work Directive, adopted in 2024 with transposition due in late 2026, takes a different approach — establishing a rebuttable presumption of employment for platform workers — and the two models will be the natural experiments to watch over the next five years.
For the full treatment of how the U.S. is settling its platform-work classification question, see our flagship The Gig Economy Settlement →.
Where collective action is going next
Three organizing innovations are worth watching specifically.
Platform-mediated organizing
The Rideshare Drivers United group in California, the United Workers Union approach to gig workers in Australia, and the App Drivers and Couriers Union in the UK (which won the 2021 Supreme Court Aslam v. Uber case) have demonstrated that algorithmic transparency demands and pay-floor demands can be organized around even where formal collective bargaining rights are absent or contested.
Co-op platform models
Worker-owned platform cooperatives — Up & Go in New York (a domestic-worker-owned cleaning platform), Stocksy United (a photographer cooperative), and the German taxi-driver cooperative network — are small in aggregate but have served as the proof-of-concept that platform technology can be deployed under worker ownership rather than venture-capital ownership. The literature, including work by Trebor Scholz at The New School, makes a credible case that these models could scale with public-procurement preferences.
Digital identity infrastructure for informal workers
India's Aadhaar-linked PM-SVANidhi program, which gives street vendors a digital identity and access to small working-capital loans, has enrolled more than 5 million vendors since 2020. Mexico's CURP-linked formalization efforts and Kenya's M-PESA-linked credit history infrastructure are analogous experiments. The lesson is that digital-identity infrastructure changes what informal workers can access, even before formal-employment classification changes.
What a working agenda looks like
The collective-action agenda that actually empowers informal workers, in 2026 and beyond, has four pieces. Portable benefit funds financed by per-transaction surcharges on platforms or by employer pooled contributions. Digital identity and credit-history infrastructure so informal workers can access banking, credit, and social-protection systems. Sectoral codes of conduct — like Convention 189 for domestic workers — that establish baseline labor standards regardless of employment classification. And legal recognition of worker organizations, including non-traditional formats like cooperatives and platform unions, with state-procurement-preference incentives that give such organizations leverage.
Formalization isn't the goal. Portability is — benefits, identity, and bargaining structure that travel with the worker. The state of California has been re-litigating this question since AB 5. The Self-Employed Women's Association solved it in 1972.
Informal work is not going away. It is the form most of the world's labor takes, and the share is growing in rich countries as platform work expands. The policy choice is whether the next twenty years of informal-worker organizing produces SEWA-style parallel infrastructure with state recognition layered on top, or whether it remains a fragmented patchwork of state-by-state experiments. The evidence base for what works exists. The political infrastructure to scale it remains the open question.
Updated May 21, 2026. This piece was substantively rewritten as part of NWLB's 2026 editorial refresh.
