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The formal GDP per capita is $3800. You have to be loony toons to believe that comes anywhere near the entire value of what happens inside the country, both fo

The formal GDP per capita is $3800. You have to be loony toons to believe that comes anywhere near the entire value of what happens inside the country, both for activity that simply isn't recorded and taxed and for activity that is explicitly illegal such as drug and gang activity. El Salvador is mostly an informal economy.

moralestapia 5y ago
Lol, sure, everyone's secretly a millionaire because of drug dealing. You vastly over-estimate the extent and value of illegal activities in a country. It may be huge for an individual but it is always a small fraction of (what you call) "formal" GDP.
- notch656a 5y ago
  You made the assumption I'm implying they're all drug dealers. Try to be more creative. I'm not making that assertion at all. Most of the economy is informal, it's estimated to exceed 60% of their economy. That includes things like sewing a blanket and selling it on the street unrecorded -- likely illegal (tax evasion), definitely 'informal', but not drug dealing. 60+% is not a 'small fraction'. You're factually incorrect.
  - peoplefromibiza 5y ago
    it only means that really rich people are hiding their wealth and all the others are slightly less poor than they declare. remember that GDP per capita is an average, meaning that a good amount of people in the country earn much less than that. People in Salvador are actually quite poor, regardless of how much "informal" economy is going on in the country. edit: I woould actually argue that an high volume of unofficial economy is a strong indicator that the country has a very weak economy in general. You can find the same conditions in all the poorer countries in the world, except maybe dictatorships such as North Korea ( we actually can't tell, because we don't have access to their economic indicators)
    - notch656a 4y ago
      I don't think anyone argued there aren't poor people in El Salvador. I'm sure remittances and guest working out of country make up for some of the things not included in GDP, and average 'income' can definitely exceed average GDP if you add in remittances (for which El Salvador is known), but you're right that there are poor people in El Salvador. Has anyone ever disputed that? Bringing up GDP as it pertains to the $30 wasn't even introduced by me, it was introduced by the person I responded to. I think you're replying to the wrong person if you have some issue with the GDP as it pertains to this topic. In fact I was on your side, explaining the issues with going off of the official GDP.
  - moralestapia 4y ago
    >Most of the economy is informal, it's estimated to exceed 60% of their economy. Highly doubt it, would like to see a source for that. Edit: Found it, 40% [1], I'm honestly surprised, that's waaaay higher than I thought it'd be. 1:https://www.worldeconomics.com/Informal-Economy/El%20Salvador.aspx https://www.worldeconomics.com/Informal-Economy/El%20Salvado...
    - notch656a 4y ago
      Yes it exceeds 60% of the labor force [0] but you're right, it may not reach 60% of GDP. It can be difficult to measure informal economy. [0] https://www.statista.com/statistics/1039952/informal-employment-share-el-salvador/#:~:text=The%20share%20of%20employment%20informality,highest%20levels%20of%20informal%20employment https://www.statista.com/statistics/1039952/informal-employm....

moralestapia 5y ago

Lol, sure, everyone's secretly a millionaire because of drug dealing. You vastly over-estimate the extent and value of illegal activities in a country. It may be huge for an individual but it is always a small fraction of (what you call) "formal" GDP.

notch656a 5y ago
You made the assumption I'm implying they're all drug dealers. Try to be more creative. I'm not making that assertion at all. Most of the economy is informal, it's estimated to exceed 60% of their economy. That includes things like sewing a blanket and selling it on the street unrecorded -- likely illegal (tax evasion), definitely 'informal', but not drug dealing. 60+% is not a 'small fraction'. You're factually incorrect.
- peoplefromibiza 5y ago
  it only means that really rich people are hiding their wealth and all the others are slightly less poor than they declare. remember that GDP per capita is an average, meaning that a good amount of people in the country earn much less than that. People in Salvador are actually quite poor, regardless of how much "informal" economy is going on in the country. edit: I woould actually argue that an high volume of unofficial economy is a strong indicator that the country has a very weak economy in general. You can find the same conditions in all the poorer countries in the world, except maybe dictatorships such as North Korea ( we actually can't tell, because we don't have access to their economic indicators)
  - notch656a 4y ago
    I don't think anyone argued there aren't poor people in El Salvador. I'm sure remittances and guest working out of country make up for some of the things not included in GDP, and average 'income' can definitely exceed average GDP if you add in remittances (for which El Salvador is known), but you're right that there are poor people in El Salvador. Has anyone ever disputed that? Bringing up GDP as it pertains to the $30 wasn't even introduced by me, it was introduced by the person I responded to. I think you're replying to the wrong person if you have some issue with the GDP as it pertains to this topic. In fact I was on your side, explaining the issues with going off of the official GDP.
- moralestapia 4y ago
  >Most of the economy is informal, it's estimated to exceed 60% of their economy. Highly doubt it, would like to see a source for that. Edit: Found it, 40% [1], I'm honestly surprised, that's waaaay higher than I thought it'd be. 1:https://www.worldeconomics.com/Informal-Economy/El%20Salvador.aspx https://www.worldeconomics.com/Informal-Economy/El%20Salvado...
  - notch656a 4y ago
    Yes it exceeds 60% of the labor force [0] but you're right, it may not reach 60% of GDP. It can be difficult to measure informal economy. [0] https://www.statista.com/statistics/1039952/informal-employment-share-el-salvador/#:~:text=The%20share%20of%20employment%20informality,highest%20levels%20of%20informal%20employment https://www.statista.com/statistics/1039952/informal-employm....