- Across the economy, important in the production of wage goods.
- Often referred to as the “informal” sector. Employs the majority of population and extremely heterogeneous (spans agriculture, industry and serviced in both urban and rural areas)
- Expands and contracts passively in response to the general economy.
- Characterized by high turnover of employees and considerable labor mobility. Constituted pool of reserve labor that keeps downward pressure on wage rates in all sectors.
- Unregulated and unmonitored.
Note: The low-wage, low-productivity of the competitive and agricultural sectors contrasted with the higher-wage, high-productivity urban sector, generated increasing wealth and economic growth at one end of the social pole and poverty and stagnation at the other.