Economic growth fails to close the gaps in the Dominican labor market, according to report

The proportion of workers employed in the informal sector fell to 54.1% in 2025, but it still accounts for more than half of the labor market. (Infobae illustrative image)The Dominican Republic continues to show high levels of informality, insufficient wages, and dependence on non-labor income, according to the report "Growth That Excludes: Critical Data on Work and Income in the Dominican Republic (2025)." The study, prepared by the Juan Bosch Foundation, notes that the country has one of the highest economic expansion rates in Latin America and the Caribbean, although that performance is not evenly reflected in living conditions. Informality, income disparities, multiple job holding, and mismatches between education and employment limit the labor market's ability to translate growth into well-being. Between 2016 and 2025, the proportion of people employed in informal activities fell from 57.7% to 54.1%. Despite that reduction, more than half of workers remained outside formal employment. The employment rate of young people under 36, meanwhile, rose from 51.9% in 2020 to 61.5% in 2025. The data on remuneration show that the average monthly salary of formal employees increased from RD$25,997.90 (USD 454.35) in 2021 to RD$36,431.12 (USD 592.18) in 2025. The national basic basket, meanwhile, rose from RD$38,565.86 (USD 673.99) to RD$47,208.07 (USD 767.36) during those years. Although the accumulated salary increase outpaced the rise in the basket, the average formal income was still not enough to cover a household's basic needs. The gap between the salary and the basket was RD$10,776.95 (USD 175.18) in 2025. The average formal salary of RD$36,431.12 was not enough to cover the cost of the national basic basket set at RD$47,208.07 in 2025. (Infobae illustrative image)The gaps also varied according to company size. In companies with one to 10 employees, men earned an average of RD$22,724 (USD 369.38) and women RD$21,386 (USD 347.63). In companies with 151 or more employees, remuneration amounted to RD$40,448 (USD 657.48) for men and RD$41,159 (USD 669.03) for women. Education was associated with higher incomes, although it also did not guarantee sufficient pay relative to the cost of living. University-educated workers received a monthly average of RD$45,803 (USD 744.52), compared to RD$27,571 (USD 448.16) for those with secondary education, RD$23,019 (USD 374.17) for those who completed primary school, and RD$19,757 (USD 321.15) for people with no formal schooling. Likewise, the report indicates that non-labor income plays a decisive role in lower-income households. In the first income quintile, it accounted for 48.4% of total per capita income, compared to 51.6% from paid work. Non-labor income accounted for 48.4% of total per capita income in households in the poorest quintile. (Infobae illustrative image)Government transfers amounted to 22.7% of the non-labor income of households in the poorest quintile. If monetary non-labor income were removed, overall poverty would have risen from 17.3% to 24.3% and extreme poverty from 2.2% to 5.3%, according to the simulation included in the study. The document states that public transfers reduce inequality by 4.6%, although it warns that lasting improvements depend on quality jobs, sufficient labor income, and a more equitable distribution of growth.