Back to the Sweatshop or Ahead to Informal Sector.

The concept of the informal sector first introduced in the early 1970s in studies of Africa, has recently gained currency as a tool for understanding the changes under way in the advanced industrial societies. Originally, the concept was used to describe the variety of third world business enterprises characterized by their small scale, ease of entry, labor intensiveness and the evasion of government regulation. The first waves of studies identified the informal sector as a leftover from precapitalist modes of production, subsequent work portrayed the informal sector as an increasingly integral aspect of industrializing third world economies. But the most recent evidence suggests that the informal sector is a first world phenomenon as well. Increasingly, social scientists draw attention to the growing proportion of persons working on their own account, the shift toward smaller firm size, the expanding scope of economic activities whose existence is concealed from the state, the revival of homework and the burgeoning of sweatshops. They conclude from this disparate set of phenomena that the informal sector is alive, well and growing in the postindustrial West. The paper takes a skeptical look at this new version of the informal sector idea by examining a case that is critical for the informal sector claims, the sweatshop phenomenon in New York's garment industry.