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Question Description
Answer with atleast 3 paragraphs----------- What threats does the informal economy present to firms operating in the formal economy? Use examples from your personal experience with the informal economy.
Also on a seperate word doc respond to this post below explaining your thoughts and view points:
A threat to formal business is informal business may have a cost advantage when competing against formal economy business firm's because they do not pay taxes. I think the bigger threat will be the impact of fines and penalties, which could lead to tighter regulation and taxes on businesses in the formal economy.
My personal experience with the informal economy is that informal economy has Inefficient use of resources, disregard for workers' rights and interests, lack of supervision over product quality, low production efficiency, and asymmetric competition with legitimate enterprises. The most important of these is a disregard for workers' rights. Informal workers generally face unstable employment, low incomes, and most of them are not covered by the social security system. For example，the coal mine in China, the workers working with dangerous working conditions, but the manager do not improve the safety conditions and buy the insurance for workers either. Indeed,even though the informal economy has some advantages such as cost advantage, however, it based on Disregard for workers' rights and violation of social justice.
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