ECONOMY-ARGENTINA: Govt Labour Policies Exacerbate Poverty

By Marcela Valente Reprint | | Print |

Marcela Valente

BUENOS AIRES, Jun 24 1998 (IPS) - The Argentine government, while trumpeting statistics showing economic growth and a decline in unemployment figures, is overlooking an increase in general poverty – attributed to official labour policies, analysts say.

“There is a new kind of public employee in Argentina these days – the temporary worker who holds a ‘precarious’ position,” says sociologist Artemio Lopez. ”

“These workers survive on an average salary of 176 dollars a month from the government – as opposed to the official minimum wage of 500 dollrs – and their work often seems more a form of diversion than a real job.”

Other economic and labour analysts agree and say the current situation is similar to that in the 1980s when the government sustained an enormous mass of employees in public administration and state companies – which have since been privatized. Now the government is designing plans for public employment with funds from international credit agencies.

For example, in order to meet the needs of 9,000 unemployed in the province of La Rioja – President Carlos Menem’s home town – the government created some 5,100 temporary jobs that paid 200 dollars a month, while in the capital city only 303 jobs were available to some 170,000 unemployed workers.

With this form of public employment – expanded during 1997 through four new projects – the government managed to bring down the unemployment rate from 17.3 to 13.7 percent for the year, and the figure is expected to descend to 12 percent once the numbers for May are processed.

One of the government’s employment plans states that its objective is to “provide transitory employment to workers that are poor or socially vulnerable, to reduce the impact of the decline in the level of household income due to loss of jobs, and to improve the employability of these workers.”

The decline in the official rate of unemployment, however, coincides with high rates of growth in the gross domestic product, anaylysts are quick to explain. In 1997, the Argentine economy grew eight percent and the upward trend continued in the first quarter of 1998, thanks to the development of some sectors that did not demand large numbers of workers.

Latest figures from the National Institute of Statistics and Census indicate that, in the last few monthys, there has been an increase in poverty and deprivation among families with incomes of under 280 dollars a month who paradoxically coexist with the fall of unemployment rates.

Lopez believes that poverty is becoming more entrenched among sectors that traditionally have few resources, a phenomenon that could be directly related with “precarious” employment. The paradox is that without these employment plans, unemployment would be much greater, but while the government’s labour plans decrease unemployment they do not decrease poverty.

Last year, using funds from the World Bank and the Inter American Development Bank, the government launched a series of plans to carry out “community projects” over periods of two to six months, while not providing workers with social security or health benefits.

According to a report written by Lopez, out of the total number of jobs created in 1997, 41.5 percent correspond to the government’s four work plans. Another 30 percent were contract positions – partly-subsidised temporary jobs in the private sector without the social benefits that go with traditional employment.

Of the total number of new jobs, only 28.5 percent correspond to genuine jobs in the productive sector.

For this year, the government is preparing a new plan “Pro- Jobs” designed for the private sector and aimed at combating the core of the unemployed labour pool: heads of households aged 38 years or more.

The program consists of a government bonus of 100 dollars above the monthly salary paid by a private firm and, at the same time, exempts the employer from social security costs. This will mean the figures for unemployment will continue to decline at a significant rate, say analysts.

Mercedes Marco del Pont, an economist and director of the FIDE consulting firm, also points to the fact that there has been an increase in poverty and hardship despite the reasonable rate of growth in the economy.

“One plausible interpretation for this phenomenon is the fact that behind the economic growth is a process of deterioration of the conditions of the labor market,” says Marco del Pont, who describes the new jobs as of “low quality.”

While in 1993 the increase of poverty was related to unemployment, the current “precarization” of labor conditions is a determining factor in exacerbating social inequality, she says.

For both Lopez and Marco del Pont, the official euphoria about the decline of unemployment is unjustified.

“If it weren’t for the government’s intervention, the Argentine economy at this end of the century would be incapable of generating genuine jobs, even to satisfy the growth of the active population,” Lopez says.