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CENTRAL AMERICA: Crisis Chews Women Up, Spits Them Out

SAN JOSE, Sep 11 2009 (IPS) - Vanessa Madrigal was working as a secretary for a private clinic in the Costa Rican capital, but only a month after returning from maternity leave she was fired, struck by one of the waves of layoffs that have swept across Central America in the wake of the global financial tsunami.

A maquila plant in Guatemala  Credit: CGTG/ IPS File

A maquila plant in Guatemala Credit: CGTG/ IPS File

“They gave me the pink slip claiming they were restructuring personnel. The news took me completely by surprise because I had tried hard not to let the fact that I was nursing interfere with my work. That was six months ago and I still haven’t found a job, because I have no one to leave my baby with. So my partner is the only one bringing in money,” she explained to IPS.

According to International Labour Organisation (ILO) projections, by the end of the year more than half a million people will have been left out of a job in Central America and the Dominican Republic.

The ILO puts the number of working age people in Central America at 37.6 million, 55.4 percent of whom form part of the labour force. Of these 20.8 million people, 1.27 million are currently unemployed and another half a million are expected to lose their jobs in the remaining months of 2009.

If these projections are met, the mean unemployment rate for the sub-region will stand at nine percent of the economically active population, an increase of three percentage points that will push employment back five years, with the ensuing social and economic consequences.

And the majority of the workers joining the ranks of the unemployed are women, a trend that is expected to continue, according to forecasts by international agencies like the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), as well as non-governmental organisations involved in the issue.

So far the global crisis has caused greater unemployment among women than among men, with the average female unemployment rate three to four percentage points higher than the rate for men, ECLAC executive secretary Alicia Barcena said in July.

While there are no official figures for female unemployment in Central America, there’s general agreement that the impact is even greater in this sub-region because women workers have less schooling and technical training and as a result are concentrated in economic sectors that are highly vulnerable to the crisis: the garment industry – with its maquila or export assembly plants -, the flower sector and retail.

Vulnerable jobs

“The economic crisis has a female face,” Sandra Ramos, executive director of the “María Elena Cuadra” Movement of Employed and Unemployed Women, told IPS in Nicaragua, as she reflected on the massive dismissal of women from companies operating in duty free zones.

According to Ramos, by late June the cutbacks in work hours and the closing down of maquila factories had left 4,364 women out of a job, nearly two thousand of whom are single mothers and heads of household.

The crisis had already been felt in the last quarter of 2008, when 27,000 women lost their jobs as maquila plants closed down in response to dwindling demand for their products in the United States.

Maquila or maquiladora plants, which import materials and equipment duty-free for assembly or manufacturing for re-export, enjoy tax exemptions and flexible labour conditions, offered by governments in poor countries to boost the generation of employment.

Maquilas have played a major role in raising female employment in Central America, although the working conditions and wages paid in the plants are for the most part poor.

In Nicaragua, almost 71 percent of all jobs generated by this sector are held by women; in El Salvador, 82 percent; in Guatemala, nearly 75 percent; and in Honduras, 70 percent. Fifty-one percent of the women employed in maquilas in these countries are between the ages of 18 and 24, according to the Centre for Women’s Development Studies (CEDEM), based in Santiago, Chile.

In Guatemala, 62 percent of all workers fired in the first half of the year were women, Rosario Escobedo of Sector de Mujeres, a group that forms part of the Coordinadora 8 de Marzo coalition of women’s organisations, said at a conference on “The Impact of the Economic Crisis on Women”.

In 2008, there were some 80,000 jobs in Guatemala’s maquila sector, but by the first quarter of 2009 that number had dropped to 60,000, as a result of a fall in exports.

The Guatemalan Exporters Association’s Garment and Textile Commission reported that in January-February 2009, textile exports were down 31 percent from the same period of 2008.

Briggitte Obrock, director of the association’s Ornamental Plants Commission, said that as of March production in her sector had fallen by at least 10 percent, with the ensuing reduction in employment.

This sector employs some 60,000 people, a third of them directly. Of the 20,000 direct workers, 80 percent are women.

Domino effect

In Honduras, analysts and the media reported this month that so far this year, 13,000 people have lost their jobs, including 8,000 in the maquila industry – on top of the loss of 120,000 jobs (28,000 in the maquila plants) in 2008.

Guillermo Matamoros, representative of the Honduran Association of Maquilas, pointed to a paradox: while the industry employs primarily women – 70 percent of employees – because they are considered reliable workers, women are the first to be laid off when the industry hits a rough patch.

“The impact is greater if you take into account that for each job lost in a maquila factory, four other indirect jobs are also lost. That means that if there are 9,000 women unemployed, there are some 68,000 people whose economic situation has been affected by the crisis,” Matamoros said.

The case of Costa Rica – which has significantly higher living standards than its neighbours – is different. Most maquilas pulled out of the country years ago because of the higher costs of social security and other labour rights.

The country opted to attract high-tech companies with the aim of generating better-paid jobs and fostering greater technical skills among the workforce.

Which is why the worst hit sectors in this country are hotels and the construction industry. But that doesn’t mean that Costa Rica has dodged the crisis.

According to deputy minister of labour Eugenio Solano, Costa Rica could close the year with seven percent unemployment, more than two percentage points up from late 2008. But he told IPS that this projection must be confirmed by a study currently under way.

Official figures placed women’s participation in the labour market at year’s end 2008 at almost 42 percent, while women represented more than 48 percent of the 101,905 people unemployed.

Adriana Ramírez was fired from her receptionist position in a services company in August, just when she and her husband began talking about starting a family.

“My boss told me it was because of changes he had to make in my post. But he just happened to fire me only a few days after I told some co-workers I was going to try to get pregnant. Now my husband and I will have to put off our plans, because we need two incomes to have a baby,” Ramírez told IPS.

Although they can’t prove it, Ramírez and Vanessa Madrigal are convinced that their dismissal was prompted by their recent or planned pregnancy. In Ramírez’ case, it’s what experts call “preventive dismissal,” which is aggravated in times of crisis, when companies resort to various stunts to avoid having employees on paid leave for three or four months.

“We’ve found that some employers ignore what is stipulated by law: that women who are pregnant or have recently given birth cannot be fired,” Erick Briones, head of the inspections department at the Labour Ministry, told IPS.

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