LABOUR-ARGENTINA: Reforms a Headache for New Government

By Marcela Valente Reprint | | Print |

Marcela Valente

BUENOS AIRES, Feb 25 2000 (IPS) - A bill to overhaul Agentina’s labour laws along the lines of recommendations from multilateral lending institutions has presented President Fernando de la Rúa with one of his first big challenges.

The bill, approved 138 to 88 by the lower house of parliament Thursday, won the support of part of the Confederacion General de Trabajo (CGT), this Southern Cone country’s largest trade union.

But around 20,000 truckers, construction workers, metalworkers, mechanics and others held the first major street protest Thursday since De la Rúa took office Dec 10.

While that protest raged outside the seat of government, a smaller demonstration by around 3,000 teachers, doctors and public employees was held outside Congress.

Critics of the labour reform bill protest that it will not bring down the high unemployment rate, but will merely cheapen the cost of hiring and firing workers.

They also argue that it will further undermine the collective bargaining power of trade unions by allowing labour agreements to be reached within individual companies or by branch of activity, while extending the probationary period of newly hired employees to a minimum of three months.

Pointing out that unemployment already stands at 13.8 percent of the economically active population, 40 percent of workers do not pay into the social security system, and those who do have jobs live in constant fear of losing them, the demonstrators protested that the bill would legitimate the precariousness of employment.

In the past 10 years, the number of labour agreements reached between individual companies and their employees rose from an annual average of 18 to 189, while collective bargaining agreements representing an entire branch of activity shrunk from 109 to 28.

“Workers are agreeing to anything to hold onto their jobs. When a flight attendant died after falling out of an airplane through a door that wasn’t working properly, the rest did not want to go on strike because they were more frightened of losing their jobs than their lives,” said Alicia Castro, with the flight attendants union.

But the government argues that the labour reforms, submitted by the Alliance comprised of De la Rúa’s centrist Radical Civic Union and the centre-left Front for a Country with Solidarity, will help create new sources of jobs and pull unemployment down.

Many employees already work overtime without pay or work seven days a week, a de facto situation given a legal framework by the new law, which is slated for passage by the upper house.

But not even business totally approves of the bill. Industrialists complain that it is merely one small step towards “modernising” labour relations, and maintain that it will not create jobs.

Small and medium businesses, meanwhile, say that not even by cutting wages will more jobs be created.

“We have problems with competitiveness, access to credit, extremely high rates of tolls, fuel, power and telephones…Not even with depressed wages can we continue to operate, if the rest of our problems are not addressed,” said the secretary-general of the Unión Industrial Argentina, Ignacio de Mendiguren.

The International Monetary Fund (IMF) and World Bank have been pressing Argentina for more than two years to make the laws on hiring and firing workers more flexible and to decentralise collective bargaining.

The bill is virtually identical to those recommendations. Hugo Moyano, the head of the truckers union and the leader of the sector of the CGT that took to the streets Thursday, clarified that he was not fighting the De la Rúa administration but the IMF and World Bank, which – he said – pressured the president to accept the reforms.

But the dissident sector of the CGT warned that if necessary, it would hold twice the number of work stoppages that took such a heavy toll on the government of Raúl Alfonsín (1983-89), which had to deal with 13 general strikes.

The protesters claimed that the sector of the CGT that reached agreement on the bill with the government and did not take part in the protests had “betrayed” the interests of workers “for a fistful of dollars” – a reference to the government’s guarantee that the union fees paid by companies and employees would continue to be obligatory.

A ruling coalition lawmaker opposed to the bill, Enrique Martínez, said “no one dares admit that this bill will not help generate jobs, but is only designed to create the conditions for legally lowering wages.”

The debate on the draft law in the lower house was one of the most heated since De la Rúa was handed the reins of power from Justice (Peronist) Party president Carlos Menem (1989-99).

According to analysts, the protest signalled the awakening of the CGT from its lethargy under Menem. The union’s inactivity during a period in which unemployment soared and labour gains were rolled back severely damaged the public image of trade union leaders.

Opinion polls indicate that seven out of 10 people in Argentina have no trust in labour leaders, who live in posh homes and drive shiny new cars while one-third of the country’s 35 million people are living in poverty.

In the past 15 years, labour affiliation has plunged from 70 to 35 percent of the economically active population, which in turn has reduced the bargaining power of trade unions.

The CGT, organised over half a century ago as the backbone of Peronism, kept a low profile while the Justice Party governed, say analysts, who point out that with the change in government, less conformist leaders are beginning to emerge.

“I will not sell myself, they cannot buy me with perks or promises, and I’m not going to accept the betrayal of the workers,” declared the leader of the truckers union Hugo Moyano, a candidate for secretary-general of the CGT and the leader of a labour movement current that could bring De la Rúa continued headaches.