The Decline of the Steady Job in Latin America
Vilas, Carlos
Contrary to the predictions of orthodox economic theory, the high growth rates of the 1990s have not brought new jobs or higher wages, forcing Latin American workers to work longer hours just...
...GDP growth is the annual rate of change...
...1. 4. International Labor Organization (ILO), Anuario de estadisticas del trabajo (Geneva: ILO, various years...
...Labor-supply growth stems largely from the increased participation of women in the labor force, a trend which began in the previous decade...
...2 (June 1996), pp...
...87-129...
...177-195...
...This is due to long-term phenomena such as increased urbanization, higher levels of education and changes in people's understanding of sex-role norms and gender relations...
...Between the early 1980s and the middle of the 1990s, the percentage of working-age women in the labor force grew from 37% to 45%, while the male labor- force grew from 37% to 45%, while the male labor16 NACTA REPORT ON THE AMERICAS 0 z NACTIA REPORT ON THE AMERICAS 16REPORT ON LABOR force participation rate held steady at about 78...
...This situation brings to mind the oft-quoted praise free-market advocate Hernando de Soto has lavished on the informal sector...
...The process has heightened the competition for available jobs and diminished the capacity of workers to bargain with capital...
...The unbalanced opening of the economies, the overvaluation GDP -0.3 of the real rate of exchange, GRO.WTH implicit subsidies of imports as part of an anti-inflationary bal- URBAN 5.8 ance-of-payments strategy, and the UNEMPLOYMENT contraction of credit have all played a part...
...27-56...
...27 (October 1996...
...week in order to compensate for their low incomes...
...On the contrary, in countries with labor organizations having greater power and autonomy, like Brazil, capital's onslaught against protective labor legislation has encountered greater obstacles and less support from the state...
...The sentiment of solidarity with fellow workers is undermined by the competition of all against all for a decent job...
...The debate over working-class strategies in these new scenarios of increasingly internationalized accumulation must begin with a recognition of these changes...
...A. Marshall, "El empleo piblico en America Latina despues de las 'reformas del Estado,'" Revista Latinoamericana de Estudios del Trabajo, Vol...
...The service sector is very varied, combining highly skilled and productive financial activities, for example, with highly unstable, low-paying, low-productivity jobs in home shops...
...Not the working class nor capital nor the state at the close of the 1990s are what they were at the close of the 1960s...
...The growth of the service sector has been accompanied by a tendency toward self-employment and wage work in small businesses and microenterprises...
...5. ILO, Panorama laboral (Geneva: ILO, 1995), p. 2. 6. See H. Beyer, "Logros en pobreza: frustraci6n en la iguadad...
...This has not been brought about simply by the market's "invisible hand...
...9. Kevin Cowan and Jos6 de Gregorio, "Distribuci6n y pobreza en Chile: Estamos mal...
...Economia y Trabajo en Chile, No...
...In Argentina, for example, about 70% of poverty has been found to be the result of low wages...
...2, No...
...a member of NACLA's editorial board...
...9-28...
...The impoverishment of many Latin American workers thus derives from the incapacity of the labor market to provide enough adequately paid work...
...This combination of factors has allowed for severe blows against trade unions...
...Poverty is also the result of the very low wages many people with steady jobs are paid-wages that are insufficient to provide a minimal level of well-being to their households...
...Claudio Lozano, "Desempleo y pobreza en la Argentina," Realidad Econ6mica, No...
...But above all, the economic policies carried out in most countries since the mid1980s are to blame for the rapid decline in manufacturing employ- YEAR 1990 1 ment...
...Richard Hyman, "Los sindicatos y la desarticulaci6n de la clase obrera," Revista Latinoamericana de Estudios de Trabajo, Vol...
...145 (January/Febuary 1997), pp...
...Andres Bilbao, Obreros y ciudadanos: La desestructuraci6n de la clase obrera (Madrid: Trotta, 1993...
...As the number of new jobs has contracted precisely as the number of people seeking work has increased, Latin American labor markets continue to be characterized by high unemployment...
...See, for example, Pablo Pozzi, et...
...1 7 The dismantling of labor legislation and cuts within the public sector have been greater and have encountered fewer obstacles in countries emerging from prolonged military dictatorships which severely repressed the trade-union movement and promoted diverse styles of savage capitalism, as in Chile, Argentina and Uruguay...
...Latin American workers find themselves having g with to work longer than the legal work a job...
...131148...
...15-33...
...The deterioration in the quality of employment is linked to the deterioration of the quality--in terms of health, education and inter-generational transference of poverty--of the labor force, due largely to the reduction of state spending in these areas...
...This is a relation that grew in Latin America within the framework of the model of development that held sway until the 1970s...
...2 0 The changes in the labor market and in the relationships among the state, employers and workers are also introducing deep changes in what we might call "the culture of work": the combination of attitudes, behaviors, ideas and symbolic understandings of the population in general, and of workers in particular, about the nature of work...
...49-76...
...The progressive deskilling of jobs in certain branches of As in all significant transformations within capitalism, the state has intervened to shape a new definition of winners and losers...
...43, No...
...Venezuela and Panama appear to be the countries within which the legal work week continues most strongly in effect, while Bolivia and Paraguay are the countries in which the norm is most often exceeded...
...The vision of the union as the instrument of the defense of rights and access to benefits is likewise losing ground...
...1 6 In the framework of the so-called neoliberal "reform of the state," privatizations and reductions in public spending have redimensioned the public sector, severely reducing public employment...
...And as the labor-force participation of the indigent poor increased, the gap between the best-paid and the worst-paid Brazilian workers increased from seven-toone to 8.5-to-one...
...al., "Cambio social y cultura laboral en Argentina (1983-1993)," Taller, Vol...
...Contrary to the predictions of orthodox economic theory, the high growth rates of the 1990s have not brought new jobs or higher wages, forcing Latin American workers to work longer hours just to make ends meet...
...Private firms have deliberately reinforced this weakening of unions...
...These costs, argue neoliberal reformers, reduce international competitiveness and profitability, discourage more productive investment, and block the growth of employment...
...8. Paulo Eduardo de Andrade Baltar, et...
...3 Until now, however, a demoralizing impoverishment rather than unfettered creative energy has been the hallmarnl nf thpep rpformv mation of some firms and sectors into maquiladoras and the effect this transformation has had on other firms and sectors has had a negative impact on employment...
...This is reinforced by state policies and also by the mass media which have eliminated collective referents-the term "working class," for example--in the formation of workers' identities as a way of reducing the symbolic dimension of social conflicts and antagonisms.22 The capital-labor contradiction remains in effect, but its physiognomy, the terms of its development, and the identity of the actors involved have changed dramatically...
...This is the point of view that has been adopted by the multilateral financial organizations in their designs of neoliberal labormarket reforms...
...For the Argentine case, see Congreso de Trabajadores Argentinos, Carlos Menem (1989-1993): La demolici6n del derecho de trabajo (Buenos Aires: IDEP/ATC, 1993...
...al., eds., Labor Markets in an Era of Adjustment (Washington: World Bank, 1994), especially Vol...
...2 The state has played a strategic role in the reconfiguration of the labor market...
...In addition, deep economic and political reforms in South Korea, Taiwan and Japan favored the cheapening of wage goods and the modernization of infrastructure...
...Economic theory notwithstanding, there appears to be no automatic connection between low wages and rising employment...
...1 0 The central problem, in other words, is not the lack of employment but the precariousness of employment and the meager income it generates...
...Argentina has also played a role in this decline...
...8 In that same period, the percentage of workers from poor families who ended up in jobs that paid at the official poverty level or below more than tripled...
...Once the regulatory entanglements are eliminated, small firms can be stimulated by competition, directing their savings from low labor costs to technological improvements and productive investments...
...These trends suggest that the restructuring of capitalist accumulation in the past decade is progressively erasing the boundaries between formal and informal activity...
...12 (December 1992...
...4 (1996...
...Latin American governments have enacted regressive labor-law reforms, substituted commercial law for labor law, shown permissiveness in the face of company violations of labor laws and eased labor regulations in order to allow companies to hire, alter working conditions, and fire personnel virtually at will...
...While in some cases the shrinking of the bureaucracy has had no significant impact on the carrying out of state functions, in many cases it has deprived the state of its most skilled and efficient public servants...
...Rhys O. Jenkins, "La experiencia del Corea del Sur y Taiwan: Ejemplo para America Latina?," Comercio Exterior, Vol...
...See, for example, World Bank, El mundo del trabajo en una economia integrada: Informe sobre el desarrollo mundial 1995...
...42, No...
...Figures are from the entire uba...
...4 (August 1997), pp...
...The real wage grew modestly between 1992 and 1994, but among the employed workers in the bottom 10% of income distribution, the percentage of those who earned less than the minimum wage grew from 48% to 67%.9 The shortage of full-time jobs is therefore not the only labor-market source of poverty...
...Pablo Pozzi and Alejandro Schneider, Combatiendo el capital: Crisis y recomposici6n de la clase obrera argentina, 1985-1993 (Buenos Aires: El Bloque Editorial, 1994...
...In Chile, with little more than half of those employed complying with the legal working day, the trend seems to be toward the greater observation of the norm...
...U NACLA REPORT ON THE AMERICAS The Decline of the Steady Job 1. Economic Commission on Latin America and the Caribbean (ECLAC), Estudio econbmico de America Latina y el Caribe, 1995-96 (Santiago: ECLAC, 1997), Table VII-2...
...60 (1995), pp...
...H. Henriquez and P. Roman, "Cambia el tiempo de trabajo en Chile...
...6 (1996), pp...
...Source: UN Economic Commission on Latin America, de la economfa de Amrica Latina y el Caribe (Santiago: unemployment...
...At the same time, the growth of poverty and the high rates of unemployment, combined with the increasing transformation of complex productive processes into simple operations, has reduced the returns on investments in training and education...
...In addition, the manufacturing sector has been battered by the financial crises which have arisen over the past few years, first in Mexico and now in Asia...
...Although the assembly sector is the major generator of new jobs in manufacturing, the transfortrasts with the experience of the service sector which, since the early 1980s, has accounted for almost all the region's net growth in employment...
...2, No...
...2 (1996), pp...
...The privatization of social security, cutbacks in public spending on education, health and recreation, and the privatization of these services, all have heightened the vulnerability of the working class...
...2 To leave underdevelopment behind, runs de Soto's influential argument, it is necessary to overcome the legal and administrative barriers which block the access of the poor to activities which can liberate their "entrepreneurial energies...
...These reforms have permitted these economies to VOL XXXII, No 4 JAN/FEB 1999 19REPORT ON LABOR t-.Ul - I UW Vlllnllla wages with high purchasing power, generating a highly skilled work force and allowing for the introduction of new productive and organizational techniques and a sustained elevation of quality.' 8 Nothing like this is taking place in Latin America and the r, ;; TUt IN, 1r_ use o0 ile lnSLtLULIon of apprenticeship, permitting the short-term contracting of young workers in "training" programs which exclude any type of legal benefit, the right to join a union or to enjoy the benefits of collective bargaining...
...1 4 In political terms, the new policies reflect changes in the relations between capital and labor as well as greater fragmentation of the working class, changes which would not have come about were it only for the actions of companies and private investors...
...Daniel Cieza, "Hiperdesocupaci6n, precarizacibn y riesgos en la Argentina: El caso del Gran Buenos Aires," paper pesented at the II Inter-American Conference on Labor Law and Social Security, Havana, July 1996...
...Carlos M. Vilas, "La reforma del estado como cuesti6n polltica," Taller, Vol...
...2, No...
...261-335...
...212 (April-June 1995), pp...
...Marta Novick, "El Destino de los sindicatos," Encrucijadas, Vol...
...Pierre-Richard Ag6nor, "The Labor Market and Economic Adjustment," IMF Staff Papers, Vol...
...It is also the case in countries with state-linked corporate or clientistic labor movements like Argentina and Mexico...
...2 1 Deep down, we are witnessing one of the most conventional modalities of the functioning of the capitalist state: fragmenting and destructuring those "below" to guarantee the rule of those "above...
...In Colombia, Costa Rica and Venezuela, the growth of total employment which is linked to growing self-employment and employment in microenterprises has been much stronger than its growth in medium and large firms...
...The idea of belonging to a group of fellow-workers--a class-is brought into question by fragmentation...
...Since few jobs are available in the formal sector, these new worried members of the labor force enter the informal sector, the personal-services sector, or they seek seasonal and casual work...
...On the one hand, we see wages and working conditions typical of the informal sector penetrating ever more deeply into the institutions of formal employment...
...Between 1988 and 1992, for example, the Mexican manufacturing sector lost 1.3 million jobs, and between 1990 and 1994, the percentage of jobs in the nonagricultural formal sector fell from 47.9% to 44.3% in the region as a whole...
...28 (May-August), 1995...
...Increases in GDP now do very little to counter high unemployment [See table, p. 16...
...al., "Mercado de Trabalho e Exclusao Social no Brasil," Revista Latinoamericana de Estudios del Trabajo, No...
...In the metropolitan area of Sao Paulo, for example, the percentage of families in extreme poverty grew from 37% to 47% in the first half of this decade...
...1 5 The enormous political influence in the region of the major international financial institutions--the World Bank, the International Monetary Fund (IMF) and the Inter-American Development Bank (IDB)-since the outbreak of the crisis of the past decade has led to a radical dismantling of labor legislation...
...The small and micro business sectors include technology-intensive firms as well as firms that rely on craft production, with enormous variations in labor productivity and working conditions...
...The growth in labor supply--the number of people seeking employment-has also contributed to rising 991 1992 1993 1994 1995 1996 1997 3.4 2.7 3.8 5.3 0.3 3.4 5.3 5.8 6.3 6.3 6.4 7.3 7.7 7.5 entages...
...2 (1996), pp...
...Nor, counter to the predictions of orthodox economic theory, do low wages allow employers to put a greater percentage of the labor force to work...
...7 rio t American may no associate a livin holding n all the countries of the region, rising unemployment is correlated with falling incomes...
...Latin American capitalism has changed, and popular and working class strategies that cannot recognize these changes are condemned to failure and to the reproduction of an unjust social order...
...The percentage of imported inputs has grown significantly in certain branches of production, such as the automobile industry, and this has reduced the production of intermediate goods within the region...
...The reorganization of the work process and the growing emphasis on L A zl . the dismantling of labor legislation and savings in the cost of labor power have not translated into increased labor productivity or increasing quality of workmanship.19 The reduction in labor costs has not typically been directed toward productive investment, and savings have not generated new employment...
...The older model, called import-substitution industrialization, was concerned with creating the purchasing power necessary to sustain the region's internal markets and with generating a much more integrative dynamic of development...
...In order to with create the conditions within which this liberation rkeHis can proceed, say de Soto's neoliberal followers, rket, He is it is necessary to dismantle the apparatus of prothe tectionism and regulation which marginalizes the informals and generates privileges and abuses of VOL X)(XII, No 4 JAN/FEB 1999 15 VoL XXXlI, No 4 JAN/FEB 1999 15REPORT ON LABOR power...
...This is particularly the case in Argentina, Colombia and Mexico...
...A common household strategy to make up for abrupt falls in income during such periods of economic downturn has been to send additional family members into the The Wor labor force...
...Ha habido progreso...
...As in all significant transformations within capitalism, state intervention has been necessary to shape a new scenario and new definitions of winners and losers...
...1 (July 1996...
...Carlos M. Vilas, "Despues del ajuste: la politica social entre el estado y el mercado," in C. M. Vilas, ed., Estadoypoliticas sociales despubs delajuste (Caracas: Nueva Sociedad, 1995), pp...
...In fact, workers the concept of the "legal working longer week," one of the first achievements of Latin American labor movements, earning has nearly disappeared...
...7. ECLAC, Panorama social de Ambrica Latina y el Caribe, 1996 (Santiago: ECLAC, 1997...
...2. Hernando de Soto, El otro sendero: La revoluci6n informal (Lima: Oveja Negra, 1986...
...5 The downward trend in indlletrinl mnl nvmnt ranIndustrial employment has declined sharply in large and medium firms in Latin America, particularly in Mexico, Peru, Uruguay and Venezuela...
...Unemployment has remained high and has even grown in countries which have done the most to deregulate labor relations, dismantle worker protections, and cut wages...
...Translated from Spanish by NACLA...
...fall in real wages...
...Through the first half of the 1990s the combined Latin American economies grew by about 15% with decreasing inflation...
...In light of this phenomenon, the World Bank has warned that the region may be facing a break in the relation between income and work...
...Growth and price stability have returned to Latin America, but at a staggering social cost...
...Carlos M. Vilas, "Estado, actores y desarrollo: los intercambios entre political y economia," Investigaci6n Econdmica, No...
...Hemos Retrocido?," Estudios POblicos, No...
...Estudios POLblicos,No...
...The idea of employment as the means which permits a living to be earned-an institution which permits one to attain minimal levels of wellbeing and a sense of efficacy and dignity-is now diluted by the evidence that having a job does not necessarily permit one to live better...
...World Bank, El mundo de trabajo en una economia integrada: Informe sobre el desarrollo mundial, 1995 (Washington: World Bank, 1996), p. 12...
...When firms "streamline" their operations by eliminating certain job categories, they are typically eliminating the jobs of unionized workers...
...64 (1996), pp...
...The fragmentation of the labor market, the growing instability of work and the growth of unemployment all reduce the ability of unions to recruit new members and to successfully bargain for wages, hours and working conditions...
...1, No...
...industry and commerce has operated to generate an abundance of continually cheapening labor power...
...Firms are increasingly making s or-llerl pro UUctL Vty have generated new challenges that the unions are still trying to deal with...
...Urban the average annual rate...
...When they hire new workers, they prefer the unorganized...
...Privatization in general has contributed significantly to an increase in unemployment...
...Carlos M. Vilas, "Actores, sujetos, movimientos: Donde quedaron las clases?," Socioldgica, No...
...Without this "overtime," many people could not reach minimal levels of well being...
...Daniel Cieza, Crisis del estado de bienestar y desarrollo social (Buenos Aires: "IBAP, 1994...
...4 (1996...
...Nine out of every ten new jobs created in the 1990s is in the informal sector-an acceleration of a trend that began in the second half of the previous decade when 80% of all new jobs were informal...
...It is argued that these policies are justified by the excessive costs of producVoL XXXII, No 4 JAN/FEB 1999 17REPORT ON LABOR tion created by labor stability, legal protections, employer contributions to social security, the high costs of layoffs and similar forms of state regulation of labor markets...
...3. See, for example, Inter-American Development Bank (IDB), Progreso econ6mico en America Latina, Informe 1996 (Washington: IDB, 1996), especially chapters 6 and 7. Also see S. Horton et...
...9-28...
...The meagerness of income has led d Bank is large portions of the work force to put in longer hours than the 40- to hat Latin 49-hour work week considered normal within Latin America...
...figures are perc "unemployment is The progressive "maquilization" region excluding C of the manufacturing industry in Balance preliminar countries such as Mexico and ECLA, 1997, 1998...
...This growth has been accompanied by high rates of unemployment and a Carlos Vilas is an Argentine political economist currently affiliated the National Institute for Public Administration in Buenos Aires...
...3343...
...Sergio lbaiez and Patricio Hurtado, "Los jovenes urbanopopulares y el trabajo," Proposiciones, No...
...most recent book is Between Earthquakes and Volcanoes: Ma State and Revolutions in Central America (Monthly Review, 1995...
...For the case of Costa Rica, see Consejo Nacional de Rectores/PNUD/Defensoria de los habitantes, Estado de la nacidn en el desarrollo humano sostenible (San Jose: CONARE, 1995...
...6 Conjunctural factors, like recessions and economic crises, have also led more women to seek employment...
...Cheap labor has simply maintained or increased the levels of poverty and has further depressed internal demand...
...Employment is now concentrated in low-productivity activities and is increasingly unstable.' The unemployment rate has grown despite the fact that gross domestic product (GDP) growth rates have been higher than the growth rates of the 1980s...
...2, No...
...Gustavo M~rquez, ed., Reforming the Labor Market in a Liberalized Economy (Washington: IDB, 1995...
...The privatization of the railroads and the energy sector (gas, oil and electricity) in Argentina, for example, is principally responsible for job losses in those sectors.13 Social legislation that had its origins in the principle of the compensation of workers for their vulnerability vis-A-vis capital has been replaced by a principle of abstract equality which legitimates and reinforces the supremacy of capital over labor...
...As a result, the poor are getting poorer...
...4 This decline in the number and quality of manufacturing jobs is the result of a number of factors, including changes in industrial organization, the work process and techniques of production...
...A similar phenomenon can be observed in Chile...
...On the other hand, it is clear that a high percentage of workers in the formal sector combine income from their informal work with their formalsector earnings...
...Among medium and large firms, only the maquiladora sector has shown a net increase in employment...
...This is a marked contrast with the situation in southeast Asia-the once-exalted model of the neoliberal reformers-where public investment in education and health is quite high and well directed...
Vol. 32 • January 1999 • No. 4
