The formal sector consists of the businesses, enterprises and economic activities that are monitored, protected and taxed by the government, whereas the informal sector is comprised of the workers and enterprises that are not under government regulation. British anthropologist Keith Hart coined the term "informal sector" in 1973 as part of a study on Ghana. There are many conflicting theories as to the role and benefits of the informal sector.Know More
In contrast to the formal sector, the laborers, businesses and activities that make up the informal sector are not registered with or taxed by the government. For this reason, scholars sometimes refer to the informal sector as the black market, shadow economy or underground economy. Originally, the term referred to self-employed small enterprises like street vending, sewing, artisanry and small farming. It now also includes wage-earning jobs like crop-harvesting, cleaning and any other unprotected occupation.
Academics and policy-makers view the informal sector with conflicting views. Some believe the informal sector fuels entrepreneurialism and provides a cushion during economic crises. Others argue that the informal sector undermines taxation and regulation and thereby weakens the overall economy.
Globally, the informal sector is steadily growing. It constitutes the majority of the economy in both Latin America and Africa. This pattern is the result of governments' failure to plan for sufficient formal jobs in the face of expanding global communication and competition.Learn more about Taxes
Formal communication is communication that takes place in a company in a vertical manner from management to employees or from employees to management, or it may be in a horizontal manner with workers at the same level. Informal communication occurs, when employees communicate with each other outside of the formal organizational communication structure put into place.Full Answer >
The difference between modern neoliberalism and liberalism is that neoliberalism advocates an idealized "hands-off" free-market system while modern economic liberalism calls for government regulation to control the excesses of free-market capitalism. Modern liberalism, or the "Keynesian school" of economics, named for its main proponent John Maynard Keynes and differing from classical liberalism, developed in the aftermath of the 1930s failure of the free-market system known as the Great Depression. Neoliberalism, sometimes referred to as the "Chicago school" of economics and named after the University of Chicago, rose to prominence in response to the breakdown of the international money system and the fiscal contradictions viewed as inherent in the welfare system.Full Answer >
EIN verification is a process through which businesses can verify the validity of a company's employee identification number. The EIN is an IRS requirement for tax-exempt entities as well as a majority of businesses. As of 2014, the IRS only keeps records of EINs belonging to charities.Full Answer >
A federal employer identification number is a nine-digit tax identification number assigned to businesses by the Internal Revenue Service. FEINs are required for corporations, partnerships, non-profits and anyone with employees.Full Answer >