The Politics of Labor Reform in Latin America: Between Flexibility and Rights

Abstract

The progress of economic reform and of democratization has been patchy in Latin America. Some aspects of economic reform such as trade liberalization and, in some countries, privatization and financial sector liberalization have been implemented reasonably well, but others have not, including the important issue of labor reform. Some democratic reforms such as the holding of free and competitive elections are also working well, but social and economic rights remain problematical. Labor reform, which is crucial to economic modernization and to safeguarding the rights of ordinary working men and women, has been characterized by uncertainty, slow progress, and lack of consensus, and its history is littered with government proposals that scarcely move from the drawing board. Decades ago the trade union movement was the focus of much social science research, but in recent years the emphasis has shifted to social movements. Social protest has replaced union strikes as the main arena of confrontation between the people and the government. Yet labor issues are as important now as they were decades ago.Maria Lorena Cook offers the first comprehensive and comparative discussion of the politics of labor reform in a thorough and well-documented, if at times overly detailed, account of attempts at reform in six countries organized into pairs — Argentina and Brazil, Chile and Peru, and Mexico and Bolivia. The logic of the pairing is that labor reform (or lack of it) has been shaped by the context of state corporatism in the first pair, of radical reform in the second pair, and of revolution in the third pair. Her discussion revolves around a number of questions: How can we explain the diversity of processes of reforms and of outcomes? Do international factors have an effect on the process? Will the current emphasis on labor flexibility, which makes employment dependent on market conditions and grants almost unlimited powers to employers to hire and dismiss workers, shift to a new emphasis on the rights of labor?Cook is critical of the way the reform process has unfolded. She argues that where reforms were imposed they were unsustainable: Argentina reversed its flexibility laws in 1998; those in Brazil remained marginal and ineffective; those in Chile did not incorporate respect for rights nor contribute to developing human capital; and those in Peru destroyed labor rights (p. 199). The author makes it admirably clear how labor reform is a highly politicized issue in which vested interests — sometimes of labor but invariably of employers — militate against any consensus on reforms that would benefit the economy and at the same time protect the rights of workers.If the author’s account of various reform projects is at times formidably detailed, this is compensated by an admirable clarity of exposition. She points to the difference between the collective rights of unions — principally to engage in collective bargaining, to defend the closed shop and preserve sector-wide unions — and those of the individual worker, principally the right of compensation in cases of dismissal, of clear and enforceable employment contracts, and the right to decent working conditions. In practice, of course, the two sets of rights may well overlap, but the core of any progressive labor reform must incorporate both sets of rights. But how can this be done while at the same time respecting the rights of society to the abolition of unfair impediments to economic reform? After all, most poor people are not in unions, and in some countries most are not even employed in the formal sector. As the author points out, the degree of informal employment is so high in many countries that there are few enforceable rights of workers, whatever the formal provisions of the law.Some additional contextual material would have been valuable — for example, more attention to the way that the structure of employment has changed over the past two decades, and more attention to the character of the unions (such as how democratic their structure is and how leaders are elected) in the countries under discussion. Readers would be interested in how the author might resolve the initial conundrum of combining respect for the rights of both the unions and the individual workers with the removal of impediments to economic growth resulting from anachronistic labor codes. It may be asking too much, but are there comparative examples outside Latin America where these various elements are held in the right kind of balance? These speculations, however, rest upon the achievement of the author in providing the indispensable guide to the politics of labor reform in recent years.