Dear Dr. Sabelotodo,
Why on earth were there so many vendors in the park during October?
Thanks – Curious in Cantel
Great to hear from you, Curious. The vendors were in the park because of the Catholic holiday of El Día de La Virgen del Rosario — a celebration of the appearance of the holy spirit’s baby momma to St. Dominic. She gave him the rosary and taught him how to use it as a weapon against bad dudes. It’s celebrated in October to commemorate the most awesome display of the rosary’s power to date. As every school child knows, this was on October 7, 1571, when the Holy League used the potent talisman to defeat the Ottoman scourge in the Battle of Lepanto.
But you probably already knew all that, so let’s dive deeper. All those street vendors you saw represent something even more unsettling than pagan Ottomans — Guatemala’s massive informal economy.
The informal economy consists of those jobs that are outside of government regulation and taxation. In Guatemala, it accounts for a staggering 75% of the workforce. All of your favorite pupusa peddlers, blanket barons, and succulent slingers are members of this four and a half million strong army of unregistered workers. While some people might complain that these workers are just naughty, tax-dodging, rule-breakers, the real problem is that they enjoy neither real government protections nor services: they have no minimum wage, no social security, and no health insurance.
Xela is doing it’s best to at least organize the city’s informal street vendors. Since 2014, the city hasn’t issued any new vendor permits. According to them, there’s simply no more space. Thus the current arrangement of vendors has been in place for at least three years. These vendors pay Q5 to Q20 per day to the city, depending on the size of the spot, which serves to partially offset the loss in tax revenue. But this solution excludes any new vendors that might want to enter the market, and the police remove an average of three such vendors by force every week. A longer term solution is obviously needed.
Why are there so many Guatemalans toiling away in the informal economy? Is it because 2% of the Guatemalan population owns 70% of the productive land, thus giving the poor little leverage to take out loans and few opportunities for stable jobs? Yes. Is it because to register any business with la SAT you need to have both the paperwork skills of an origami grandmaster and the bribery skills of Jabba the Hutt, thus leaving many people with no option other than to work illegally? Also yes. Is it because the global economy has spent centuries taking advantage of Guatemala’s labor and natural resources at the expense of the Guatemalan people? As always, yes.
The size of the informal economy is a complex problem, and unfortunately this is a problem that won’t be solved with a magic necklace. It’s going to take real, difficult political action the details of which are beyond the scope of this light-hearted magazine column. In the meantime, support your local unregistered worker and go buy some tacos.