Laboring under Chávez

In contrast to cases such as Chile and Mexico, which have undergone substantial economic liberalization and labor flexibilization, labor reform under the Chávez regime’s twenty-first-century socialism promised greater protection for workers from market forces and the development of a strong, autonomous labor movement capable of advocating effectively for workers’ rights and interests. However, this chapter argues that such potential was not realized under Chávez and will not likely be realized under his chosen successor, Nicolás Maduro. Indeed, while in rhetoric the regime vehemently rejected neoliberalism, in practice it promoted de facto flexibilized labor relations through the creation of worker cooperatives, which serve as sources of subcontracted labor, particularly for state-owned industries. In addition to exploiting vulnerable workers in cooperatives, the Chávez regime’s “rentier populism” employed divisive institutional practices that encouraged the fragmentation and weakening of organized labor, impeded the labor movement’s autonomy, contravened essential labor rights such as free union elections, collective bargaining, and the right to strike and engaged in reprisals against unions and workers it perceived as threats. These key features of labor organization in contemporary Venezuela indicate a pronounced contradiction between the Chávez regime’s avowed commitment to socialist principles of worker solidarity and equality and its political economy in practice.

The Limits of Labor Legislation Reforms

The literature addressing market dynamics within neoliberalism typically assumes that reforming labor legislation has a direct impact on economic performance, the configuration of labor markets, and the strength of labor organizations. Within this literature one prevalent school of thought advocates increased flexibility of labor laws as the key to creating economic prosperity, enhancing labor productivity, increasing formal sector employment, and successfully fighting poverty and socioeconomic inequality. This chapter tests these assumptions by analyzing the case of Brazil between 1995 and 2010. The chapter’s findings suggest that legislation reforms seeking to flexibilize the Brazilian labor code do not significantly change the country’s labor market or economy. The author therefore proposes that transformations in international economic contexts as well as differing policy orientations of successive Brazilian federal governments may hold more explanatory power in accounting for labor market changes during this time period.

Introduction

This chapter situates Labor Politics in Latin America within the existing literature on labor markets and organization, presents its goals and methodology, justifies the selection of case studies, and outlines the analytical focus of subsequent chapters and their findings. The chapter offers a summary of the book’s principal findings and theoretical contributions to the study of labor market reform within Latin America. In this regard, the study’s comparative analysis provides little support for claims regarding the purported benefits of flexibilization, particularly with respect to its promise of employment generation and the reduction of inequality. Examination of the case studies also reveals that there exist multiple ways in which labor flexibilization can be imposed. Beyond de jure reforms of collective labor rights, the analysis reveals that flexibilization has often been achieved in ways other than legal reform of the labor code, for instance through negotiations of collective agreements at the plant level. Finally, the authors find that the imposition of flexibilization, whether de facto or de jure, has had a significant impact on labor organization and party-labor ties.

Uncertain Transitions

The government of the party historically representing labor in Argentina, the Peronist Party, moved with unprecedented zeal in the 1990s to justify changes in labor legislation that placed the burden of adjustment squarely on workers. Moreover, changes in the labor market, both de jure and de facto, took place in a country where labor’s political and organizational strength had secured it a privileged political position. The chapter takes a historical approach to assess the position of the General Confederation of Labor (CGT), both during the process of neoliberal restructuring and labor reform in the 1990s and later, during the Peronist administrations between 2003 and 2015 that were more receptive to labor’s demands. While the CGT and its offshoots like the Argentine Workers’ Central are still forces to be reckoned with, their power was considerably reduced during the 1990s, a development that speaks to the scope of the transformation neoliberalism imposed on the CGT and its legitimacy as representative of the working class and as a key actor within Peronism itself.

The Impact of Regime Change and Economic Restructuring on Mexico’s Labor Relations, 1988–2012

Despite Mexico’s economic restructuring to a market-based model and its transition to democracy, two processes that should have yielded changes in labor legislation and the practice of labor relations, neither significant flexibilization of the labor code nor democratization of labor relations occurred between 1988 and 2012. Analysis of Mexico during this period indicates that this high degree of continuity is mainly attributable to the specific configuration taken by the country’s neoliberal economic model. This configuration generated a structure of incentives for political and labor elites to favor the persistence of non-democratic patterns of labor relations and to leave the country’s labor legislation essentially untouched.

Historical Overview

To contextualize Labor Politics in Latin America’s country-specific discussions of Chile, Mexico, Brazil, Argentina, and Venezuela, this chapter provides the historical and comparative background essential to account for the particular ways in which global and regional transformations affected labor and labor legislation in Latin America during the critical 1990s and their aftermath in the new century. In the development of this background, the author also explores key concepts that are essential to understanding the book’s case studies. Starting with early experiments in working-class organization, the chapter revisits the contours of mass politics and labor movements in the region and their reconfiguration starting in the 1980s that so deeply transformed the conditions under which workers had struggled to advance and protect their rights.

Conclusion

The conclusion summarizes the case study findings from the book’s individual chapters while drawing more general lessons from comparative analysis of these case studies. In addition, the chapter proposes an agenda for future research. With regard to general trends observed on the basis of comparative analysis, the chapter identifies the pervasiveness of four negative, interrelated trends that cut across the book’s five case studies: (1) the adoption of labor flexibility practices, which increased the precariousness of labor; (2) the continued vulnerability of national economies to global competition and boom/bust cycles; (3) with the exception of Brazil, the significant weakening of party/union ties, leaving organized labor without strong, reliable political allies to help advance its interests; and (4) the internal fragmentation and attendant lack of efficacy of labor organizations in promoting positive reforms such as reducing flexibilization and increasing collective bargaining. Topics for future study include research to better understand intraregional migration, the relationship between economic growth and employment in Latin America, investigation into the conditions necessary to establish democratic unionism, and the role of politically targeted social welfare assistance in cultivating support among informal workers and thereby mitigating the need to build support from organized labor.

Labor Market Flexibility, Employment, and Inequality

Flexibility proponents assert that rigid Latin American labor markets impede economic expansion and job growth; they advocate reforming labor codes through increased flexibility. Critics argue that heightened labor flexibility exacerbates inequality without expanding employment. From this perspective, precarious employment and inequality are remedied by strengthening labor’s bargaining power. Chile’s maintenance of flexible labor reforms since the Pinochet dictatorship make it appropriate for evaluating these competing perspectives. Based on flexibility proponents’ predictions, we should expect increased formal sector employment over time, particularly among the least skilled Chilean workers, as well as reduced wage inequality. Yet the rate of unemployment among least-skilled workers in Chile remains essentially unchanged since the democratic transition, as does income inequality. These conditions persist despite a highly flexible labor market. Thus, Chile’s continued adherence to a flexibilized labor market should be understood not in terms of its capacity to reduce inequality or generate employment. Rather, it should be understood as the product of several interrelated factors: (1) the business sector’s ability to protect its interests; (2) the Concertación’s conscious limitation of threats to the business sector’s interests; and (3) the weakness of organized labor, resulting from the perpetuation of the Pinochet-era labor regime.