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Paper short abstract

This paper challenges the notion that expanding informal economies are surplus to the needs of capital by tracing the alternative ways in which informal economies are being incorporated into global circuits of accumulation, turning perpetual precarity into a feature, not a bug.

Paper long abstract

In the context of globalization, technological change, and market reforms, the burgeoning informal economies of the Global South suggest that the prospects for absorption into the formal economy are increasingly dim. In the face of jobless growth and rising unemployment, many scholars view expanding informality as evidence of the ‘structural irrelevance’ of the informal masses to contemporary processes of development. This paper examines the blindspots of the conventional Transition narrative, promising informal workers a path out of proverty, as well as the limitations of its mirror image, the Stalled Transition narrative, which highlights the failure of the promised transition to materialize, highlighting instead an alternative labour transition taking place under the radar of prevailing Development thinking. The paper argues that, far from being surplus to the needs of capital, informal economies are being incorporated into global circuits of accumulation in new ways, operating at the level of production and social reproduction. It explores how the intertwining of precarious work and financialized social protection are creating new dynamics of accumulation and labour discipline which transform perpetual precarity into a feature, not a bug. Examining the interface between formal economic exclusion and financial inclusion, this paper shows how new labour transitions underway turn informal economic inclusion from a path out of informality into a development regime of profiting from perpetual precarity, raising new questions about the role of social protection in the transformation of informal economies.