Archive for the ‘Informal Economy in El Salvador’ Category

My last purchase from Margarita   2 comments

The Flor de Izote I bought from Margarita was my last purchase from her.  For almost two years now, I’ve bought veggies, cheese, cream, and all sorts of foods from her as she makes her rounds in our neighborhood, toting her goods in the guacal on her head.   I don’t always need what she sells me, but I’m happy to help keep her in business, and admire the courage it takes to walk from door to door selling the way she does.  And always with a smile, and a laugh, she was a bright spot in my week on the days she came by.  I will miss Margarita, so took these pictures of her to remember her.

The white flowers in this guacal (bucket) are what I bought from her that day, and cooked them.

 

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Escape from the flies   2 comments

A plague of flies has fallen upon us.  I wonder if it was like this for the Egyptians during Biblical times.  I blamed the food remains at the front of the house in the AM, but still they kept coming.  As clean as our back patio/kitchen area is kept, there had to be at least 30, 40, 50 flies.  Hanging out on the hammock, resting on the chair, dancing on the countertop, and tap dancing on the bathroom floor.  Arrrg!  DISGUSTING!

I did what I could:   alternate attacks with the flyswatter or the Baygon (like Raid), but my cockroach Baygon did nothing more than make the bastards dizzy for a few moments and off again they buzzed.  By late afternoon, flight was a better choice than fight, and I went where the car could take me – FAR away.

——-

I always make friends at the gas station in Amayo (pronounce “uh-mai-oh”).  Vendors approach me every time (gringa face), selling their wares.  I kick in a few coins or bucks if I can use what they sell, as their lives are a scrape-by existence relying on people like me more fortunate than them.

Today the hammock people and the boy with nuts were there.  The nut boy remembered me from last time.  He was there when the cookie ladies were, on my last visit; I’ve known them for a few months now.   They take Sundays off, I was glad to hear that.   They are a mother and daughter pair, with a huge age spread between them.  The mother is somewhere in her 50’s although she looks like 60+ from all the weathering her skin has gotten from walking everywhere in the sun.  Her daughter is 15, and her mother and I always joke about how you ‘have to keep an eye on them’ with the boys.  Of course, I helped her daughter be all the more devilish one day myself when I let her take a couple slugs off my Smirnoff ice.  It was in a can, and as her mother can’t read, we told her it was a power drink, like red bull.  We weren’t very convincing.  The mom asked me for $5 once for something urgent, which I gave her, but when she asked for $10 the next time I was at the station, I felt that was going too far.  But I will buy their cookies loyally each time I see them.

I’ve urged  the nut boy more than once never to quit going to school.  He is in “Quinto” or 5th grade.   This sounds about right for his age, so hopefully he keeps up without being held back or dropping out.   Many, many, many kids in rural areas drop out in grade school as early as the 5th grade.  A lot of kids make it to say, 7th grade, but if they’re held back once or twice they give up out of shame, not wanting to sit in class with kids 2 or 3 years younger.

I will remind you that today is Sunday, and the boy with nuts, 11 or 12 years old, is working.  I will buy nuts from him every time I see him.

Diary entry, April 25, 2010

One Nation, Two Economies – El Salvador’s Informal and Formal economies   Leave a comment

“One Nation, Two Economies” is a phrase that’s been tossed about prior to and during the recession (still going ON by the way, don’t let anyone fool you), and recently in a February 2011 article by Rainer Rupp on how the ‘recovery’ merely funneled up to gamblers on Wall Street.

While Americans enjoyed at least three decades of solid middle class prosperity during what many economists refer to as the Golden Age of Capitalism, and are getting accustomed to what may be a ‘new normal’, down here it has long been –

One Nation, Two Economies
Poverty in El Salvador has fortunately been declining; according to the U.S. department of State, ‘The economy has been growing at a steady and moderate pace since the signing of peace accords in 1992, and poverty was cut from 66% in 1991 to 37.8% in 2009.’   Improving, but still a ways from a thriving middle class.  If you live in El Salvador and pay any attention, you can see clear distinctions between the classes, and easily observe those who participate in the Informal sector.

What are the “Formal” versus “Informal” economies in El Salvador?
Formal economy/sector:  jobs which are part of the ‘system’ where tax collection takes place, public or private health insurance comes with it, and maybe other benefits like holiday or vacation pay.  For instance, a person who works in an office, large restaurant or hotel, hospital, factory, school, clinic, government agency, etc.   And the owners of such businesses.

Benefits of working in the formal economy include being part of the ISSS health insurance system (or private, if you’re lucky enough to be middle class or higher), and building up years of work experience in ‘the system’. If you look through employment ads in the major newspapers, many employers require would-be employees to have things like a social health insurance card or other requirements one won’t have if they haven’t built up time in the official system.  Paying into the ISSS health system means you have access to clinics and hospitals that service this population.  I thought everyone could go to ISSS facilities, but I learned differently.  Apparently, there is a “lowest rung of the health system” set of clinics and hospitals for the poor.  If you don’t have a health card, you will be turned away from the ISSS hospital, and sent to the hospital for the ‘poorest of the poor’.  That’s where most of my in-laws go.

Courtesy of ElSalvadorAhora.net - click for link and story

The Informal Economy:   A LOT OF PEOPLE.  According to the International Labor Organization, nearly a million Salvadorans in 2009 were employed in the informal sector, totally over 53% of non-agricultural employment.  Most of these people make their “own” economy using the resources at their disposal.   It consists of all types of vendors and small businesses, from people with roadside fruit and veggie stands, vendors at the markets, selling door to door or at traffic intersections, and owners of small restaurants and hot foot stands.  The boy who sells peanuts and cashews at the gas station, or the hammock and blanket vendors.   Maria’s Pupusas.  Joes Juice and Liquados. The  ‘muchacha’ who tends to house and children for the more well off.

Why?  If they work in a Maquila (textile mill), or retail position at the mall, they are likely to come home with a little over $5 in their pocket after working 10-12 hours and paying bus fare.   A girl I met at the mall in 2010 made $6 to work an 11 hour day.  My husband worked as a baker for over 10 years when he was a young man.   In the late 90s and early millennium, he made $15 a day working 12+ hours in a bakery.  He interviewed at a bakery in San Salvador last year.  If he took the  job, it would be Monday-Saturday 9+ hours (however many to bake 7 sacs – a lot – of flour), and ‘a few hours on Sunday’.  Based on his monthly salary, we calculated it at $8 a day.

People in the Informal economy are their own boss, they set their own hours, fulfill their own inventories, and often come home with better than the average laborer’s 6 to 8 bucks a day.  Fed up with serf wages, people have taken to the streets, and vendors abound in El Salvador; they are anywhere and everywhere.   As I stroll along the main street in Los Planes de Renderos, several women sell fruits and vegetables, while others sell pupusas.   Cross the street from WalMart in Soyapango to the Plaza Mundo mall in Soyapango, and you ‘walk the vendor gauntlet’, ambushed by dozens of people selling clothing, small electric items, batteries, toothbrushes, you name it.

Mercado Central:  Shopping mall for the poor.  One of the best examples of the Informal economy in El Salvador.  Located in downtown San Salvador, the main, or “central market” is literally a grocery store and shopping mall for the poorest people in this region.   It’s a sea of people taking up several city blocks; at the height of the day, literally hundreds, if not a few thousand customers and marketeers flow in waves, buying and selling to one other.  There is at least one official building set up for market vendors, but the majority of vendors are spread out in various ways throughout these blocks.   Sometimes as small shops in buildings, but more often stands set up along the streets on top of sidewalks, or vendors who sell produce from wheelbarrows to those who carry items strapped to their waistline, hanging from their shoulders, or propped on their head.

It’s a fantastic solution to resist the symptoms of poverty, because they CUT OUT the middle man.  On the seller’s end, there is no boss or distributor taking the large cut and paying them a salary or commission; as direct sellers of their products they are able to offer a good discount and thus, sell a lot.   From the buyer’s perspective, a person of poor means is delighted to buy a product with a better price tag than the mall or local super can offer.   Fruits and vegetables in the cheapest grocery chain, Super Selectos, can be double what they cost at the market.  One can outfit their home with most produce and food goods, home products, grooming items, clothes, shoes, and electronics.  I’ve even encountered a  “hair salon alley” – hair salons along both sides of the first floor of two buildings along an alley connecting two main streets of the market.

 

Downsides to the Informal Economy:

a) Streets are chaotic and disorderly.   People are so accustomed to vendors selling on the sidewalk that most pedestrians don’t bother using sidewalks the way we do back home.   Main streets in large towns and cities are nuts to drive through, and one feels as if they are driving through a human anthill recently crushed by a giant foot.  Two-lane streets are reduced to 1.5 lanes, or sometimes 1, as pedestrians and cars share the road in transit.

Both the federal government and the municipality of San Salvador have taken their own (separate) measures to ‘re-order’ the city and historic districts.  Resulting in continued protests (manifestaciones) by the vendors.

>> An entire blog post is needed to discuss the ongoing eviction of street vendors throughout the downtown area of San Salvador, and in particular from Calle Arce (Arce Street) and Calle Ruben Dario. <<

b) Taxes?  Who needs ’em?   A fair source of tax revenue must be lost by those who employ themselves in the informal economy.   The improved income they experience is not translated into tax dollars.  Three of my close family members have been selling pupusas and tortillas for years.  They can make up to ten bucks on a good day, and have never paid taxes in their life.  The government is not going to ‘hunt them down’ for that income.  But it might be a case of 6 of one, 1/2 dozen of the other.  The money which informal economy participants pocket tax free is used to buy goods and services in both formal and informal sectors.   If they were making 20-25% less at a job in the formal sector, and paying taxes from those lesser wages, that sharp loss of income would see them buying less things; meanwhile the maquila owner looks for every way possible to dodge tax payments.  So instead of the ‘government’ getting that money as taxes and spending it however un/wisely they wish, it goes back into the economy directly.

Carlos Slim / Askmen.com

Can El Salvador integrate informal vendors into the “Formal” economy?   Obviously, not without participation of serious capital investment, along with a willingness to pay a wage that encourages people to cross over from informal to formal.   One of the biggest complaints heard on the group talk-news programs is the ‘abandonment’ of capital investment in El Salvador.  That people with large sums of capital take their money and run, preferring foreign investments instead.    Hmmmm, sounds FAMILIAR.

There is hope, however.   Carlos Slim (gotta love that name), a gentleman from Mexico and as of 2011 the richest man on earth, is planning on investing over $300 million over the next three years in Telecommunications here in El Salvador.   Now that’s a start.

We bring it to YOU (walking vendors in El Salvador)   7 comments

Living in a developing country, in the middle of nowhere?  Not to worry, you needn’t leave your house, most of the necessities in life come to you.

Various vendors, marketers, and peddlers wind their way through roads and passageways throughout El Salvador every day.  This entry takes you through encounters with vendors selling their wares on country roads in rural Chalatenango to others walking door-to-door in a tourist area just south of San Salvador.

Bakers peddle on bikes through caserios (country neighborhoods) and colonias (urban and suburban neighborhoods), offering rolls, bread, and pastries; signaling their arrival with a horn (comically, it’s a clown’s horn), attached to their bicycle.

Rural Chalatenango:  A vegetable vendor we prefer comes into the caserio every week on selling tomatoes, cabbage, cucumber, onions, avocado, etc. off his small commercial truck.  Unlike the grocery store, there may be only 1 variety of orange that day, or red onions but not white, but he usually produces most of your vegetable needs.  He packs a big plastic bin of “gelatins,” small bite-sized capfuls of a jello-like candy to give out to kids on his stops.  Every Thursday between 7 and 8am we hear the long hand press on his horn, announcing his approach.  Since my mother in-law buys large amounts of tomatoes and cabbage to run her ‘pupuseria’ he stops right in front of the house for her.  My husband and I stock up on veggies for 5-9 dollars a week.  Avocados went up from 3 for a $1 to 40 cents apiece*, still not bad considering they were 2 for $1.50 at best when I left the U.S.  Food selection is limited in rural El Salvador, but bless it for cheap fruits and vegetables!  Another veggie vendor made rounds here, but thankfully he stopped.  He had a megaphone strapped to his truck, broadcasting his products in a loud, not so good auctioneer style  (aspiring auctioneer perhaps?); we heard him blocks away but couldn’t understand his garble.

Chulto City is a major salt vendor and use the megaphone well.  All they sell is salt, and boy are they proud of it.  “Get your best salt here, Chuuulto City, bright white white [Chelita Chelita Chelita…], iodized salt, don’t live without it…” is chanted on wheels in Spanish.  “Helados ‘Candy’” dances ’round the neighborhood in their ice cream truck a few times a week.

The final but not forgotten of the megaphone crew are the “Chatarra” guys.  In any neighborhood in El Salvador at least once a week they come by not selling, but buying “Chatarra Chatarra Chatarra lamina, compramos refridge, tele (TV), latta…”   They pick up discarded items with scrap metal, tin or aluminum.  Auctioneer style as well.

Got room for a few more bottles? Spotted in Puerto de la Libertad October of 2010

Recycling hasn’t hit prime time in El Salvador, but there are recycling centers, and ambitious people with trucks will travel:

courtesy of Daniel at ocasaz.wordpress.com

The helado (ice cream) guys ring a small bell to humbly announce offerings from their cart.

It breaks your heart to see them pushing along in the beating sun.  And almost always an older gentleman, so one is compelled to buy a couple cones.

A sweet older woman came by last fall, selling canastas (baskets).  I got a deal buying a small hamper-sized basket for 5 bucks.

[I interrupt this story to note that as I typed this, along came someone ringing a bell in the street in our new neighborhood, Los Planes de Renderos.  Sure enough – a sorbet man!   Just as I was saying, an older gentleman, selling 25 cent child-size cones in your choice of vanilla, strawberry, or chocolate.  “I’ll take four!” I said, and treated my husband and the two masons working at the house we’re renting.  The ice cream vendor carried everything in a large cardboard box with a strap, on his shoulder.  Pictures of fancy ice cream bars adorned its top.  Inside were cones, cups, his scooping spoon, and a smaller cardboard box containing 3 flavors of ice cream.  No plastic containers, no ‘cooler’, just a simple cardboard getup, human powered with hands legs and feet!   He had travelled from San Marcos, a town nearby to sell his cones in the well-off neighborhoods of our tourist town with Mountain Vistas.]

Meanwhile, back in Chalatenango….not long after Chulto City belted out their salt-selling sermon, a guy selling blankets came by our rural house.  One had a Whinnie-the-Pooh and friends design in blues and whites, colors inverted on the opposite side.  I bought the blanket and my husbande teased me, but we did use it a few nights when it got “fresco” (brisk) on December nights last year.  Sundry food items also pass through the ‘hood’, such as frozen chicken, which comes by regularly.  When in season, an old woman with very few teeth and her mentally challenged son come by with fish, which my husband likes to buy.  The tamale girls, as I call them, come by selling freshly made hot tamales which they carry in “guacales” (shallow plastic buckets) on their heads.  They live in the neighborhood and make their rounds occasionally.  I’m usually game as it’s warm and fresh.

The oddest thing I’ve seen sold by mobile salespeople in El Salvador would be Mattresses.  Sold by men and women who walk them around.  Obviously not Sealy Posturepedic (try hauling that down the road!), but a thinned-down version one can fold and carry on the shoulder with a strap.  I feel for these vendors when I see them carrying such large and cumbersome items. I’d often like to give them a ride, but my husband reminds me their success comes from entering every neighborhood, and walking by every home, like door-to-door salesmen your grandparents knew.  So no point in offering a ride unless I want to be the salesman’s side-kick.

My husband and I made a furniture purchase from mobile vendors once – a pair of men selling folding wooden tables in Chalatenango.  Seeing how easy they carried them helped make the sale!

“Ah La La Pizzaaaaaaaah!’.   This guy is one of my favorites.   The pizza man has a unique songlike chant, it’s rather inviting.  We hear him streets away, buzzing around on his motorbike, pizza and soda on tow.  A buck a slice with a cup of soda, a deal by American standards, but pricey for Salvadorans (daily wage for a laborer in the country = $7-10 day), so more likely indulged by families getting remittances.  The remittance club can also afford to buy from the motorbike carrying Pollo Campero, or as I like to call them, Pollo Robero ** (see ‘robo‘).  It is good stuff, but be ready to empty your wallet – costs almost as much as the states.

Let’s take a gander back to the mountaintop venue again in Los Planes de Renderos.  The vendors have been selling and walking along, all this time.  There are two ladies I know well by face, and a 3rd who has made herself familiar of late.   All three sell chocolate discs, which are used to make Latino style hot chocolate with, and other small items.    I can go to the “Mercado Central” (main market in the city) and buy everything they offer for a better price, but they are such dears and make their living this way, so I buy when they stroll by.   They are from nearby towns, and we often remark about the big difference in climate just 15 minutes down the hill, often 10 degrees warmer than here.  Thus, the ever-present chocolate discs and sweater they carry with them.

A salesman of house wares came by just a week ago and left an impression.  A mountain of goods, he pulled out item after item from his collection-in-tow, trying his darndest to sell one of a dozen aluminum pots, curtains, and blankets.  Insistence often pays, so he kept on after my first warnings, offering one thing, then another.  He piled it all back after my final ‘I’m sorry, I have all those things’.  Eventually, everything was on his shoulders again.  I couldn’t believe he could carry it all – a dozen or more aluminum pots up high on his back, and several blankets and curtains held on his sides from a strap.  A human mule, hoping to dump some cargo in exchange for a few bucks.

Clothing, shoes, and hammocks lend themselves well to sales walkers and we’ve seen all kinds.  Hammock sales have a comical barter process.  The vendor starts at, say $15-18.  ‘No, I already have hammocks’, you say.  “But this is a great hammock.  I’ll bring it down to twelve.”  ‘No, really, I have that kind already’.  “You can always use another.  How about $10?”  ‘No, really, I don’t need anymore hammocks’.  “OK, OK…$8.  But I can’t sell it for any less….”  At local gas stations down the road hammock vendors approach to take you through this interchange; after the 4th ‘no’ the price has dropped in half.

Another time here on the mountain a couple of young girls (tweens?) came by selling “Atol de Piña,” a hot drink made of ground corn meal and pineapple.   I’d always eaten pineapples in cold dishes, so this was an exotic treat.

The best purchase I remember in our mountaintop locale was from a husband and wife duo selling popsicles.  I bought an arrayan flavored frozen fruit treat, generous sized and shaped like an umbrella. Best popsicle I’ve had in years, and was only 35 cents.

* Avacados, at the 3/2010 price; they’re now up to .50 apiece (vendor/market price) or more a year later.

** Went to a Pollo Campero.  Got a bucket of chicken, and….hmmm…I don’t see the drinks on the menu.  Ah well, let’s get 4 big drinks for the gang, we’re dying of thirst in 90+ degree heat.  Along comes the receipt.  Drinks are $1.25 for a small fountain soda (in El Salvador, no less) and we ordered all LARGE!   Slick job not listing drinks on the menu, Pollo Robero.

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