Development & Aid, Economy & Trade, Headlines, Labour, Latin America & the Caribbean


Marcela Valente

BUENOS AIRES, Mar 30 2004 (IPS) - As the Argentine economy gradually pulls out of several years of recession and crisis, employers are complaining about a shortage of skilled labour, while millions of people find themselves stuck in the category of ”unemployable”.

”In the labour market, it’s as if there were two countries,” Ernesto Kritz, who specialises in labour economics, told IPS.

On one hand, companies are increasingly seeking skilled workers for well-paid, stable jobs with social benefits and labour protections. In that world, the unemployment rate is low, said the economist, as the economy gets back on its feet after the late 2001-early 2002 debt default and crash.

But on the ”periphery” of the labour market, millions of people in Latin America’s number three economy can only aspire to precarious employment, with neither stability nor social protection, and only the chance of seasonal or intermittent jobs, or work in the informal sector of the economy.

In that sector, unemployment is three times higher than in the first category, said the expert.

Economic growth for 2003 stood at 8.7 percent, but ”even if the growth is maintained in the medium-term, this second sector will be unable to take advantage of the opportunities, and if it is able to do so, that would only be in low-quality jobs,” said Kritz, director of the Society for Labour Studies and a consultant to various United Nations agencies.

This seems to be, in varying degrees depending on a country’s level of development, the most alarming symptom of today’s economic globalisation.

According to a report produced by the World Commission on the Social Dimension of Globalisation, which was established by the International Labour Organisation (ILO) in February 2002, the call for ”decent work…is a major political demand in all countries”, and especially in Latin America, where unemployment grew from 6.9 to 9.9 percent between 1990 and 2002.

In February, the commission, made up of personalities from the fields of politics, business and civil society from around the globe, presented the report ‘A Fair Globalisation – Creating Opportunities for All’.

”Seen through the eyes of the vast majority of men and women, globalisation has not met their simple and legitimate aspirations for decent jobs and a better future for their children”, says the report.

”For many, globalisation is not fulfilling its promises to create decent employment”, states the report, which says some groups of workers, especially unskilled workers, have been hurt by the liberalisation of trade.

In Argentina, unemployment officially stands at 14.5 percent, and under-employment at 17.6 percent – an improvement on 2002 levels.

However, in estimating the unemployment rate, the authorities now leave out the jobless male and female heads of household who are given a monthly stipend equivalent to less than 40 dollars.

If they were counted among the unemployed, the rate would rise to 21.4 percent.

In recent months, textile, footwear, plastics, construction and metallurgical companies have complained that they are having a hard time finding skilled workers to fill new positions. But this phenomenon of ”unsatisfied demand” coexists alongside ”an incredible surplus of labour power,” said Kritz.

In addition, more than 60 percent of wage-earners are working without legal contracts, and thus without the social and labour benefits to which they are entitled under Argentine law.

During the crisis, more than half of the population of this once-rich nation slipped below the poverty line.

The government is confident that growth will drastically curb unemployment. However, experts and social activists say the problem is more complex, because the economy will be hard-pressed to absorb millions of people who have fallen outside the labour market.

The deterioration of the labour market began in the 1990s with the opening of the economy prescribed by the multilateral financial institutions.

The country sold off, or granted in concession, the majority of the companies, resources and services administered by the state, under a privatisation programme aimed at reducing the burden of Argentina’s huge foreign debt.

Nevertheless, the debt continued to mount, to more than 140 billion dollars today, and the country defaulted on its public and private foreign debt in December 2001.

At the same time, the revenues brought in through the privatisation process and the inflow of foreign investment did not go towards broadening or strengthening the country’s productive apparatus. Instead, priority was put on the financial and speculative sector.

This led to a gradual contraction of industry and agriculture, aggravated by the opening of the economy to more competitive imports.

That was when ”unemployment soared, and the big losers were those who held the most precarious jobs, or the employees of small companies that were driven under, unable to compete with cheaper imported products,” said Kritz.

In December 2001 and January 2002, when the economy collapsed and the peso crashed, the number of people living in dire poverty climbed as people lost their sources of income or saw the value of their incomes shrink to the point that they could no longer cover basic dietary needs.

The destitute, who made up six percent of the population in the 1990s, grew to 25 percent of the population.

Despite the economic recovery, that proportion has only dropped to 20.5 percent of the country’s 37 million people this year.

Millions of people who already had only intermittent and informal sector jobs fell into chronic unemployment, finding perhaps a few hours of work each month, with no social security or labour rights.

”Many of them are young people with the same stunted education as their parents, so the extreme poverty reproduces itself,” said Kritz.

Thousands of ”unemployables” can be seen on the streets of Buenos Aires and other cities, pulling or driving carts, sorting through garbage and collecting cardboard and other waste products to sell.

Others, organised in groups of the unemployed, hold frequent protests in which they block roads, demanding work and more assistance from the state.

Since 2002, the state has earmarked one percent of GDP to the programme that distributes monthly stipends to jobless heads of households. But Kritz believes another one percent should go towards education and training plans targeting the children of the unemployed who have dropped out of school.

Of the 2.3 million people who receive the stipends, 60 percent have only a primary school education, and another 20 percent attended secondary school for a year or more, but without graduating.

A high school diploma is the minimum requirement for obtaining a stable job offering social protection in the market for unskilled labour, such as stocking shelves in a supermarket.

But 67 percent of Argentines over the age of 15 dropped out of high school before graduating, according to the Education Ministry.

”You see young people who neither work nor study, and all that exists for them is ‘today’, what they can do to survive this day,” high school math teacher Pablo Moseinco, who until a few months ago worked in a school in a very poor neighbourhood in Talar de Pacheco, 20 kms from the centre of Buenos Aires, told IPS.

Many of the teenagers are unable to relate what happened the day before with what is going on today, he said.

”An opportunity might crop up for a job as an assistant gardener, delivery person, or in cleaning, but they don’t even show up, because they don’t see it as something that’s going to last,” said Moseinco.

”There are no known tools” for reaching that sector of ”unemployable” people who have dropped out of school early and have no job experience, whose parents were unemployed or only had precarious jobs, who have lost the hope of finding work and who cannot even imagine a better future, said Kritz.

Government proposals for combating illegal or precarious employment do not focus on this sector, which is virtually absent from the world of labour. Work inspectors do not seek out intermittent workers or the ”unemployables.” Nor are there abusive employers who can be fined.

And ”economic policy, in the best of cases, can benefit this marginalised sector through a trickling down of growth or through the direct transfer of money, through stipends and other assistance,” said Kritz.

But sooner or later, ”it will be necessary to think about investing in education or training, to bring them back into the system,” he concluded.

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