ABSTRACT
For orthodox economists, easing or ‘flexibilizing’ the rules and regulations that governed Global South labor markets reflected their theoretical faith that rational agents—capitalists and workers— who confronted ‘true’ market prices would assure a more efficient allocation of labor and deliver more optimal outcomes. Undocumented immigration which had always been a possible ‘choice’ became an increasingly ‘attractive’ and probable option for millions of workers as their possibilities for good jobs at home diminished. Informal activity was not a ‘last resort’ for those who ‘lacked other job options’ but, rather, it proved ‘attractive’ because it was welfare neutral, if not welfare enhancing. The function of creation non-market or non-wage jobs was understood by the Inter-American Development Bank and orthodox economists to resolve the market failure and produce at a minimum a welfare-generating equivalent to wage employment. The rhetorical orthodox argument based on ‘flexibility,’ ‘attractiveness,’ and voluntarism gave way to an objective basis for increased informality based on reduced opportunities and increased compulsion.
