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NICARAGUA: Women Bear the Brunt of the Crisis

José Adán Silva

MANAGUA, Jun 21 2009 (IPS) - “Don’t worry, your job will be here when you come back,” Lorena Castillo’s supervisor reassured her when she asked to take a day off for a gynaecologist appointment. She had been working at the textile factory for the past six months and it was the first time she asked for a day off. It turned out to be her last.

One of the thousands of women laid off, outside a maquila. Credit: Óscar Sánchez/IPS

One of the thousands of women laid off, outside a maquila. Credit: Óscar Sánchez/IPS

The next day, Castillo was fired. The security guards at Las Mercedes industrial park – a tax-free zone for export-oriented assembly plants known as maquilas or maquiladoras established in the Nicaraguan capital – stopped her at the gate and handed her the pink slip.

She waited outside for hours for her supervisor to come out at the end of the workday – the same supervisor who had assured her that her fabric washing, ironing and dyeing job would be there for her when she returned.

“There was nothing I could do,” her supervisor explained nervously when she finally came out. “They even fired 12 other girls because they thought they were pregnant.”

That was in December 2008. A few months later, in March 2009, the company closed its doors and left another 900 textile machinery operators on the street, more than 85 percent of whom were women.

None of them received the severance pay and back wages they were entitled to by law. So they formed a committee to appeal to the leftist government of Sandinista leader Daniel Ortega to force the maquila to fulfil its labour obligations. To achieve this, the laid-off women are seeking the intermediation of the pro-government Sandinista Confederation of Workers.

Castillo, a 32-year-old mother of two, is one of the 27,000 workers who have been fired in the last three years by companies operating in Zona Franca de Nicaragua, the country’s tax-free industrial zone – a figure that is expected to climb to at least 30,000 by the end of 2009, Sandra Ramos, executive director of the non-governmental “María Elena Cuadra” Movement of Working and Unemployed Women, told IPS.

In April, a study conducted by the organisation, titled “Employment Trends in Tax-Free Zone Textile and Garment Companies in the Face of the Economic Crisis, and the Impact on Women’s Lives”, found that women workers in Nicaragua were hardest hit by the global financial meltdown.

Between late 2006 and early 2009, 29 maquilas closed down completely or suspended part of their activities, with more than 25,000 jobs lost in the sector since 2008 alone.

Of that total, 85 percent of layoffs affected women, Ramos explained. More significantly, 38 percent of the women who lost their jobs were single mothers and nearly 70 percent were heads of household.

Also in 85 percent of the cases, the laid-off women did not receive any of the back pay or benefits due to them, and even though their labour rights were violated, they have been unable to obtain compensation through the proceedings established by law for such cases, nor have labour authorities forced their employers to live up to their obligations.

The importance of maquilas

In this Central American nation, the textile industry generates around 90,000 direct jobs and 10,000 indirect jobs, accounting for 30 percent of employment in the formal economy, according to the Labour Ministry and Corporación de Zonas Francas, a private association that represents corporate interests in the country’s tax-free zones.

These areas known as ‘free zones’ are industrial parks where manufacturing plants enjoy special tax exemptions and breaks, and which poor countries like Nicaragua have promoted with the aim of drawing foreign investment.

The companies established under free-zone schemes are typically from Asia or the United States and tend to employ workers under unfavourable working conditions characterised by low wages, exhausting hours, and violations of national labour rights.

In Nicaragua, the maquilas are the largest generators of jobs in the private sector, but they have also been the leading source of complaints of violations of labour rights and obligations since they set up shop in large numbers in this country in 1991.

According to Ramos, 100,000 complaints have been filed over the last five years. The abuse, she said, extends to human rights in general, and is not limited to labour rights violations. Companies are now using the crisis as an excuse to get rid of pregnant women and workers suffering from any health problems.

The global economic crisis has hit maquila production hard. Exports from free zones represent 37 percent of the country’s total sales abroad. During the first four months of the year, free zones exported for a value of 243 million dollars, 15 percent less than the same period in 2008.

Trade unionist Roberto González with the Sandinista Confederation of Workers explained to IPS why the global crisis has had such a harsh impact on the sector. “These companies manufacture garments for major trademarks sold in the U.S. market, and clothing demand in that country has dropped 40 percent due to the plunge in consumer spending,” she explained.

And the crisis is not easing. Four more maquilas are threatening to suspend their activities before the end of the year, leaving another 8,500 workers out of a job.

According to government estimates, around 29,000 formal and informal jobs will be lost in 2009, and the International Monetary Fund puts the country’s total number of unemployed by year’s end at 52,600.

For its part, the private Nicaraguan Foundation for Economic and Social Development forecasts that somewhere between 33,000 and 64,000 people will drop below the poverty line this year, in a country where 47 percent of the population lives on less than two dollars a day, according to the United Nations.

In this country of 5.7 million, the economically active population is 3.7 million. Women account for 39 percent of all workers employed in the formal economy and 45 percent of those in the informal sector, according to Central Bank figures.

The official unemployment rate is nine percent, but other estimates put it at 14 percent or higher. And these figures do not take into account the large number of underemployed or informal sector workers.

Labour Minister Janet Chávez, however, takes an upbeat view of employment in the maquilas, countering what analysts and studies say. She claims that only 15,000 jobs were lost since early 2008, and says that while many maquila factories have closed, new ones are opening up.

Eight companies were set up during that period and three more will be opened in late 2009, creating a total of 8,500 new jobs, Chávez said.

Women without labour protections

But Evelyn Flores of the non-governmental Fundación Puntos de Encuentro – a not-for-profit organisation formed in 1991 to raise awareness about and promote women’s issues in the media – accuses the government of failing to protect the rights of women and ensure proper working conditions for them in maquilas, at a time in which these companies are playing a major role in the prevailing trend of layoffs.

“The government has no employment policies for women, and many women are forced to take on precarious jobs due to lack of options or because they are the chief breadwinner in their families. As a result they end up with jobs that have no social security coverage, are forced to work long hours, and suffer discrimination because of their gender,” Flores said.

A clear example of the government’s unwillingness to address this situation, Flores noted, is that it is doing nothing to enforce the Equal Rights and Opportunities Act, which in theory requires that the state guarantee equal working conditions for men and women in every sector of activity, including maquilas.

The secretary general of the Confederation of Free Zone Workers, Pedro Ortega, agreed that there is a “significant lack of protection” for the rights of women workers in maquilas, but said that they are “fighting to change that.”

Ortega recalled that, thanks to efforts by trade unions, in March 2009 the Labour Ministry signed an economic and labour emergency agreement with the maquilas, backed by the governmental National Free Zone Commission, aimed at preserving employment and labour stability.

The agreement set a minimum wage increase in the maquilas of eight percent for this year and 12 percent for 2010. In addition, it stipulated measures to improve working conditions and ensure greater respect for workers’ rights.

The minimum wage in the sector stands at around 118 dollars a month, the lowest in all of Central America, where it ranges from 164 dollars in El Salvador and Guatemala, to 416 dollars in Costa Rica.

The impact on Central America

The rise in female unemployment is expected to spread throughout Central America, according to a study by the International Labour Organisation, which predicts that unemployment this year will affect half a million people in the sub-region and the Dominican Republic combined.

Women represent 40 percent of the labour force, but they’ll bear the brunt of unemployment due to the historical discrimination they suffer, the study reports.

As a result, the female unemployment rate in the sub-region will climb to 14 percent, while the general unemployment rate will be significantly lower, at nine percent.

According to figures from the Central American Network of Women in Solidarity with Maquila Workers, an estimated 411,502 people in Central America work in free zones, and almost 52,000 women have been fired from maquilas since early 2008 in Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua.

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