Abstract
Based on data from Argentina’s Permanent Household Survey, the method of analysis used in this study permits the rate of precarious work in Argentina in 2017 and its trend in 2003–2017 to be determined more accurately than before. The figure in 2017 was 47 percent, and women, younger people, the less educated, and the foreign-born were more likely to have precarious jobs. A separate analysis of the categories that constitute precarious work provides unique insight on the interrelation among employment relations, economic growth, and labor-capital conflict. Lastly, the findings provide support for the existence of a range of productivity levels across firms instead of a sharp distinction between formal and informal sectors of the economy and a continuous inverse relationship with precarious employment.
En base a datos de la Encuesta Permanente de Hogares de Argentina, el método de análisis utilizado en este estudio permite determinar la tasa de trabajo precario en Argentina en 2017 y su tendencia en 2003–2017 con mayor precisión que antes. La cifra en 2017 fue del 47 por ciento, y las mujeres, los jóvenes, los menos educados y los nacidos en el extranjero tenían más probabilidades de tener trabajos precarios. Un análisis separado de las categorías que constituyen el trabajo precario proporciona una visión única de la interrelación entre las relaciones laborales, el crecimiento económico y el conflicto laboral-capital. Por último, los hallazgos respaldan la existencia de una gama de niveles de productividad de las empresas del mismo sector en lugar de una distinción clara entre los sectores formales e informales de la economía y una relación inversa continua con el empleo precario.
Employment relations have changed dramatically for a large section of the world’s population in the past four decades. The increasing prevalence of alternative employment arrangements has attracted the attention of academia and has led scholars to conceptualize precarious work in various ways (Cappelli and Keller, 2013; Kalleberg, 2009; Standing, 2011). The definition of “precarious work” is often a negative one: the lack of the employment conditions and benefits typical of the Fordist era. It is a kind of employment relation that is not stable or that does not provide the benefits required by law or usually associated with formal employment. Arne Kalleberg (2009: 2) defines precarious work as “employment that is uncertain, unpredictable, and risky from the point of view of the worker.” Although some social scientists have stressed the uniqueness of this kind of employment relation (see, for example, Standing, 2011), it can also be understood as a return of employment conditions to those prevailing before World War II (Cappelli and Keller, 2013; Cowie, 2016; Kalleberg, 2009). From this perspective, the rise of precarious working conditions can be interpreted as an expression of a shift in capital/labor relations in favor of capital.
Theoretical Background
There is broad consensus that the rise in precarious forms of employment began in the 1970s, when global capital was faced with the first crisis after 30 (“golden”) years of growth. The crises of profitability in the mid- and late 1970s pushed capital to seek additional sources of profit, which it achieved mainly through the reduction of labor costs (Brenner, 2006: 165–166; Charmes, 2012; Kalleberg, 2009; Neffa, 2015). Many companies relocated in search of lower labor costs, some began outsourcing to domestic third parties, and the overall condition of the working class in the central economies went on a downslope. One crucial aspect enabled companies to outsource some activities while keeping enough control over the process, its timing, and quality standards: advances in information and communication technologies (Kalleberg, 2009; Snyder, 2016; Weil, 2014).
Precarious work is defined in different ways, but it is generally considered to include informal employment, contingent (temporary) work, underemployment, and employees’ working as contractors (what I will call “dependent contractors”) (Cappelli and Keller, 2013; Kalleberg, 2009; Standing, 2011). Some writers also consider workers earning less than the minimum wage and interns precarious workers (Standing, 2011) In this paper, I use the terms “informal” and “unregistered” interchangeably.
Historical and Economic Background
In Argentina, the casualization of the labor force began with the military dictatorship in 1976, ending a period of import-substitution industrialization (Marticorena, 2014: 29; Monteforte, 2015). After the military coup, financial reform introduced economic changes that transformed the pattern of capitalist accumulation for the following 25 years. Free-market reforms, along with austerity and privatization of public services, were the tenets of the new economic model (Basualdo, 2009).
During the late 1960s and early 1970s, a strong labor movement with a decisive presence of left-wing activists (Peronists and members of revolutionary left organizations) conditioned national politics, constrained the government’s ability to attack workers’ gains, and became a threat to the capitalist order (Aguirre and Werner, 2010). It was only through the defeat of this labor uprising by means of violent repression (including the physical elimination of more than 30,000 people) and iron-fisted military rule that the government was able to push through a neoliberal economic program. The immediate result was a marked decline in labor’s share of national income, a trend that continued until at least the end of the century and intensified in the 1990s (Lindenboim, Kennedy, and Graña, 2010; Marticorena, 2014: 42). Cazón, Kennedy, and Lastra (2016), among others, have shown that the rate of unregistered work and underemployment has increased steadily since the beginning of the 1980s, matching a global trend toward increasing rates of precarious employment.
In December 2001 an economic and political crisis shook the country and provoked the fall of the government amid social turmoil. With all branches of the state affected by a profound crisis of legitimacy, Néstor Kirchner took office in 2003 and implemented a host of progressive measures, including conditional cash transfers benefiting millions of poor people and measures aimed at fostering nationwide collective bargaining by industry that had been banned or discouraged by previous governments. The period after 2003 cannot be understood without taking into account the economic bonanza between 2003 and 2009. Several scholars have pointed out that, despite immediate economic improvements for the working class and the poor, the Kirchners’ 12-year-rule left many of the conditions and legal framework for labor informality untouched (Felder and Patroni, 2016; Marticorena, 2014; Mercatante, 2015; Salvia, Vera, and Poy, 2015). The 2008 global crisis had a limited impact on the Argentine economy thanks to China’s relentless demand for agricultural products. Since 2015, the regional economic downturn has restricted the policy options for the last stretch of the Kirchnerist government and for Mauricio Macri’s administration since he took office in December 2015.
Theories of Precarious Work in Argentina and Latin America
Marginal Mass or Industrial Reserve Army?
Latin American scholars have developed their own theories to explain the rise of precarious work. The thread of ideas goes back to Nun, Murmis, and Marín (1968) and Pinto (1976) and the theory of structural heterogeneity, which was taken up by the Programa Regional del Empleo para América Latina y el Caribe (Regional Employment Program for Latin America and the Caribbean—PREALC) 1 a few years later. This theory has been revived by several scholars in recent years (Graña, 2015; Monteforte, 2015; Nieto, Agú, and Boffi, 2015; Salvia and Gutiérrez-Ageitos, 2013). Heavily influenced by theories of monopoly capital (Baran and Sweezy, 1966) and the dual labor market (Doeringer and Piore, 1985), it proposes that in peripheral economies companies with stark differences in productivity coexist in the same market: leading industries operate in the formal sector of the economy, whereas those with lower productivity operate in the informal sector. The differences between them are qualitative, generating a segmentation of the labor market (Beccaria and Groisman, 2015; Graña, 2015; Salvia, Vera, and Poy, 2015). 2 A primary segment of the labor force—one that roughly overlaps with the more productive industries—receives relatively high wages and benefits, while the segment of the workforce employed in the informal market (firms with lower productivity) works under conditions that are unregulated and thus typically receives lower wages and no benefits (Salvia and Gutiérrez-Ageitos, 2013). Low-productivity firms can survive through lower spending on labor costs but cannot make enough profit to invest in new machinery and catch up in productivity. This dynamics perpetuates a sector with lower productivity and informal employment relations. As a consequence, according to this theory, precarious work is a permanent feature of peripheral economies, in which productive heterogeneity is a structural characteristic.
In the original iteration of the theory, expounded by Nun, Murmis, and Marín in 1968, the formal sector of the economy was directly linked to global monopoly capital. From this perspective, all the workers outside the orbit of monopolistic capital constituted a marginal mass. Therefore, the Marxian concept of the industrial reserve army lost relevance; it had dissolved with the full development of capitalism and had been replaced by the unemployed section of the marginal mass, while the employed section worked in the competitive economy. A major implication of this thesis was that workers in the formal segment of the labor market were immune to the pressures of the unemployed. However, this theory struggles when put to the test of recent history. As Clara Marticorena (2011) points out, the unemployment rate had a clear impact on the wages and working conditions of the whole working class (leading industries included) during the 1990s. At the same time, in face of the stunning rise in precarious work over the past four decades, the stagnant reserve army, far from losing meaning and explanatory power, has regained them (Marticorena, 2011).
Precarious Work by Size of Industry
As pointed out by proponents of the structural-heterogeneity thesis, smaller firms have a higher rate of precarious work. Empirical findings are consistent with this alleged relationship between firm size and precarity (Nieto, Agú, and Boffi, 2015; Salvia, Vera, and Poy, 2015). The contrast is apparent when we take the benchmark of five employees for classifying production units that was first proposed by Pinto (1976) and the PREALC as the cutting point between high- and low-productivity firms and thus between the formal and the informal sector of the economy (Beccaria and Groisman, 2015; Nieto, Agú, and Boffi, 2015). However, if instead of drawing the division at five workers we take a more nuanced perspective, we may find a gradual decrease in the rate of precarious work as production units get larger. Some studies seem to point in this direction. Marcelo Delfini (2016) shows that 40 percent of workers in firms with 40 or fewer workers were under precarious employment in 2013. Firms with 40 to 200 workers had 15 percent of their workforce precarious, and in large companies (more than 200 workers) this figure was only 10 percent. This is consistent with findings on precarity in the United States, where precarious work decreases with the size of the firm (Cappelli and Keller, 2013).
Labor Reproduction at Risk?
Monteforte (2015), Arakaki (2015), and Graña (2015), among others, adopt a labor-reproduction approach to understanding precarious employment. In this framework, the bundle of economic remuneration and accompanying benefits (health insurance, retirement plan, and other things) is equal to the cost of reproduction of the labor force—the worker and his or her progeny. Companies that are on the lower end in productivity face high competition (and, as a result, low or negative marginal profits) and are forced to resort to extraordinary compensation to keep their businesses afloat. Graña explains that there are three sources of such compensation for capital owners: land rent (when natural conditions cannot be reproduced elsewhere), loans from foreign sources through the state (foreign debt), and paying for labor-power at a price (or wage) that is below the reproduction costs of labor. The only mechanism that employers can control is the latter (Graña, 2015). Consequently, less competitive firms—which would perish if exposed to the same conditions as leading industries—resort to this mechanism to maintain profits. This should not be allowed to obscure the fact that leading firms may also informalize part of their workforce by outsourcing tasks that are outside of their “core competencies” (Weil, 2014).
This framework contributes to an understanding of precarious work from a political economy perspective. However, the assertion that capital is paying below labor reproduction costs is far from proven. Furthermore, it is not clear how we are to measure those costs. Why not argue instead that the labor reproduction costs for this sector of the workforce are actually lower? After all, lower education requirements mean lower costs, and, as we have seen, workers in the informal economy have on average a lower level of education. At the same time, a wage below labor reproduction costs sustained over time will inevitably cause a scarcity of labor unless the labor supply is maintained through mass immigration. It would be unreasonable to argue that such a mechanism could explain the global upward trend in precarious work of the past few decades.
An Alternative Framework
The yawning gap in productivity between Argentina (or Latin America) and the United States (or other industrialized countries) is at the center of the interpretation of the precarious work in the structural-heterogeneity framework. However, if this is true, how can we explain the continuous rise of precarious employment in the core countries? My hypothesis is that instead of a clear-cut division between a primary and a secondary sector of the economy, there is a spectrum of productivity levels among firms and thus a spectrum of employment compensation and benefits in the labor market. The work of the Marxist economist Howard Botwinick provides a solid framework for grappling with the rising phenomenon of alternative employment relations. In Persistent Inequalities (Botwinick, 1993) he convincingly argues that capitalist competition itself generates productivity and profit rate differentials among firms within and between industries. This is how it happens: The introduction of new technology and the investment in new capital does not take place simultaneously in all firms, much less across industries. This means that at any given time there is a wide variety of capital stock and productivity rates among firms within a certain industry—for example, profit rates will differ substantially between a firm that has just acquired state-of-the-art machinery and one that renewed its capital stock two or three years ago. The need to recover investment costs forces companies to hang onto older stock even when they are producing below the rate of regulating capital. 3
The existence of a permanent unemployed and underemployed population works as downward pressure on wages at the lower end of the productivity spectrum. Workers in the reserve army of labor are constantly driven to seek employment at substandard wages in order to survive. Additional wage variability is introduced by the uneven efforts of organized labor to win wage increases, although confined within the limits imposed by differential productivity and the constant downward pressure of the reserve army (Botwinick, 1993: Chapter 1). In this framework, there is no need to differentiate monopoly and competitive industries or a formal and an informal sector. Botwinick’s is a solid framework for explaining wage variations and the persistence of a precarious sector in the labor market.
Measuring Precarious Work in Argentina
Research on precarious work in Argentina is handicapped by the lack of appropriate data. The vagueness of the term further complicates the task of measuring it. Precarious employment takes many forms in Argentina, as it does in other countries: temporary work, unregistered employment, full-time work for pay below the minimum wage, and employment with no pension contributions or other benefits required either by the law (vacations, health insurance) or by the terms of the applicable collective bargaining agreement. The Permanent Survey of Households is the main source of available data on unregistered work. It includes the question, for those who identify themselves as waged workers, whether the employer contributes to their retirement funds (a requirement for all employment contracts under the labor law). It is assumed that those who are wage earners but do not receive pension contributions are unregistered.
Most scholars of the Argentine case use the category “unregistered work” as a proxy for precarious employment (Arakaki, 2015; Di Capua, 2015; Felder and Patroni, 2016). Using this method, the rate of precarious work was 25 percent in 2017, showing a more or less steady decline since 2004, when it had reached 32 percent (Beccaria and Maurizio, 2017). However, this measure grossly underestimates the rate of precarious work by leaving out workers registered but still working under precarious conditions such as temporary contracts or pay below the minimum wage. Furthermore, it leaves out a considerable swath of workers who are hired as independent contractors and treated by the surveys as self-employed.
The Observatorio de la Deuda Social Argentina performs an independent survey to assess parameters of poverty, quality of life, and working conditions in urban areas. Although its research sheds light on the structure of the labor market beyond the sheer split between registered and unregistered, some flaws in the handling of the data make it difficult to interpret. For example, among the unregistered there are not only employees but also employers and self-employed who do not make contributions to their own retirement funds. The same applies to other categories: curiously enough, employers and employees who do not have retirement plans are all considered “precarious workers” (Observatorio de la Deuda Social Argentina, 2016: 20). All the studies of Agustin Salvia and colleagues suffer from the same shortcoming (Salvia and Gutiérrez-Ageitos, 2013; Salvia, Vera, and Poy, 2015).
Rameri, Raffo, and Lozano (2008) of the research institute of the Argentine Workers’ Central propose a definition of precarious work that includes not only unregistered work but also unpaid work in family businesses and all work paid less than the minimum wage (by workers and the self-employed). Their estimate of precarious work in Argentina in 2007 was 58.7 percent, substantially higher than the official rate of unregistered work for that year (30 percent) (Beccaria and Maurizio, 2017). Although this method addresses some issues of underestimation bias in the traditional measure, it also blurs the boundaries between workers and other social classes. Although some workers may be misclassified as self-employed (a covert employment relation), the typical self-employed are small business-owners, professionals, or independent contractors with some specialized training (such as electricians or plumbers) (Calero, 2012). Their economic activity cannot be defined as capitalist exploitation and the extraction of surplus value. Therefore, by lumping together working-class individuals with members of the petty bourgeoisie or middle class, this method’s accuracy is considerably undermined.
In sum, whereas the rate of unregistered work is a clear underestimation of the prevalence of precarious employment, the alternative measurements suffer from severe flaws that obscure their interpretation and undermine their capacity to provide an accurate characterization of the state of labor in Argentina. It is important to anchor the empirical research in a solid class analysis. Erik Olin Wright (1989) provides a framework that categorizes workers as those who have no ownership of the means of production and no control over the labor process. Although this classification is by no means applicable to every individual, it is valid for the vast majority of cases. The research in this paper uses Wright’s approach in the classification of individuals as workers to the extent possible using the information at our disposal.
The rate of precarious work is not homogeneous across industries. Research on employment conditions by Delfini (2016) and Vergara (2015) shows great variability across sections of the economy, with construction and domestic work showing the highest figures. The incidence of precarious employment is higher among women and among younger workers (ILO, 2018; Standing, 2011: 59). In the following pages, I provide an account of the incidence and distribution of precarious work in the Argentine economy using the most recent data available (for 2017) and a glimpse of its trend in the past 15 years.
Methods
The data used for this study come from the Permanent Survey of Households conducted by the National Institute of Census and Statistics. The household survey has been conducted quarterly since 2003 4 in 31 urban conglomerates of more than 100,000 inhabitants. Since 87 percent of the Argentine population is urban, the survey represents close to 62 percent of the total population. Every wave of the survey samples 25,000 households, totaling 100,000 households yearly. The data are available at the household level and at the individual level. The figures on precarious work for 2017 are based on data from all four waves performed that year. The 2003–2017 trends were constructed with data from one wave per year. Although the economically active population is usually considered to be in the age- brackets from 18 to 65, work among teenagers and people over 65 is not uncommon in Argentina or in any other Latin American country. For this reason, I decided to include all cases between 15 and 80 years of age.
In this paper I propose a method for measuring precarious work that includes not only unregistered workers but also those who work temporary jobs (registered or not), those who work part-time jobs and are willing to work full-time (the underemployed), and those who do not enjoy all benefits required by the law (paid vacations, paid sick leave, health insurance). In addition, I try to account for those workers who are misclassified as self-employed, whom I will call “dependent contractors” 5 for lack of a better term. Since there is no easy way to identify this subsector of workers, I reclassify as precarious workers only those self-employed that I can safely identify as workers: domestic workers and the “self-employed” who always report to work for the same “client” (or boss). This method most likely underestimates the number of dependent contractors, but I prefer to err on the conservative side. Others have chosen to consider precarious all of the nonprofessional self-employed or all of the self-employed who make less than a minimum wage, but, as I have mentioned above, this extrapolation is far from warranted. I also consider precarious those workers whose main activity is a work requirement of a welfare program, those who are on probation, and those whose jobs are considered “fellowships” by contract. Lastly, I am also including in the category of precarious workers those who, working 36 hours or more, make less than a minimum wage (which I call “the underpaid”).
Using the aforementioned definitions, I performed basic statistical analysis for 2017 and for 2003–2017 to assess the rate of precarious work, its gender bias, and other parameters. In order to measure which characteristics make a worker more likely to be precarious, I performed a logistic regression model with the independent variables age, gender, education, marital status, and nationality: Logit (Pprecarious) = β0 + β1 age + β2 gender + β3 education + β4 marital status + β5 nationality.
Results
A total of 79,287 workers were interviewed in the 2017 survey, including those misclassified as self-employed that I recategorized as workers (Table 1). The average age was 39, and 55 percent of the workers were male. The average number of hours worked per week was 36.
Summary Statistics, 2017 (N = 79,287)
Source: Permanent Survey of Households (2017).
Using the method described above, the rate of precarious work in 2017 was 47 percent of the working population (37,430 cases). Most of them (23,457) fell into that category for being unregistered (63 percent), but other conditions also contributed to this figure. Thirty-one percent (11,695) were underpaid, 19 percent (8,164) were temporary, and 14 percent (9,049) were underemployed. Workers whose jobs were requirements of welfare programs or considered fellowships or were on probation accounted for 6 percent (2,135) and those who received no benefits except pensions for 3 percent (1,037). There were only 75 dependent contractors. Needless to say, there was important overlap among these categories (Figure 1).
Venn diagram of three conditions that qualify as precarious work, N = 79,326 (Permanent Survey of Households, 2017). Unregistered, 23,427; underemployed: 9,049; temporary, 8,164; unregistered-underemployed overlap: 4,158; unregistered-temporary overlap: 6,193; underemployed-temporary overlap, 1,498.
Women are slightly overrepresented among precarious workers (46 percent vs. 44 percent), and so are those with lower levels of education (Table 2). Precarious workers are on average five years younger (36 years of age vs. 41) and are more likely to be foreign-born. Workers who are single are also overrepresented among precarious employees.
Comparison of Selected Variables, Precarious vs. Other Workers (N = 79,326)
Source: Permanent Survey of Households (2017).
Domestic and construction workers had the highest rates of precarity (81 percent and 73 percent respectively), closely followed by those working in hospitality and arts and entertainment (both at 63 percent). Health (31 percent), finance, insurance, and real estate and education (both 22 percent), public administration (19 percent), and oil and gas extraction (13 percent) were the sectors with the lowest rates. (Oil refining was considered under “manufacturing.”) In between were professional activity (52 percent), retail (52 percent), agriculture and livestock (50 percent), transportation (50 percent), other (47 percent), and manufacturing (40 percent).
Using logistic regression models, we can identify the variables that affected workers’ likelihood of being precarious. In the first model (Table 3) I include age, gender, level of education, and marital status as independent variables. All these variables proved statistically significant at the 99 percent confidence interval. In a second model, I also factored in the place the respondent was born: the same city or province, a different province, or a different country. A test for nested models confirmed that the latter was significantly better at predicting a worker’s likelihood of being precarious.
Odds Ratios of Being a Precarious Worker Based on Age, Gender, and Other Social Characteristics (p<0.001)
Source: Permanent Survey of Households (2017).
As expected, the younger the worker, the more likely he or she was to be precarious: there was a 3 percent decrease in the likelihood of being precarious for every year increase in age. Men were 25 percent less likely to be precarious than women. Respondents who had completed elementary school and/or had at least some high school education were 57 percent less likely to be precarious than those who had no education or who had dropped out of elementary school. Those with at least some university education were 80 percent less likely to be precarious than those with no education or incomplete elementary school. Married workers were substantially less likely to be precarious than those who were single, divorced, or widowed, holding all other variables constant. Lastly, the foreign-born were significantly more likely (62 percent) to work precarious jobs than those born in the same city/province. Those who were born in a different province were slightly less likely to be precarious workers.
Analyzed by size of workplace (in number of employees), the data show a strong positive relationship: the larger the firm, the lower the rate of precarious work. In terms of the accepted formal/informal benchmark used by the structural-heterogeneity theorists, 81 percent of workers in firms with five or fewer employees and 34 percent of those in firms with six or more employees were precarious. However, if we allow the data to speak freely, with no preconceived segmentations, we find that rather than this clear-cut division of workforces there is a steady, gradual decline in the rate of precarity as firm size increases, with the exception of a small bump in the last category (Figure 2).
Rate of precarious employment (%) by firm size (in number of employees), N = 57,344 (Permanent Survey of Households, 2017).
Trends in Precarious Work
A longer view shows that the rate of precarious work in Argentina is heavily influenced by economic cycles. This finding is consistent with previous research (Charmes, 2012). After the crisis that shook Argentina in 2001, the economy grew at a vigorous pace until 2009, then grew languidly between 2009 and 2012, and has been swinging between recession and low GDP growth ever since (Figure 3).
GDP growth (% in constant dollars) (right axis) and unemployment and precarious work (% of labor force) (left axis), 2003–2017 (Permanent Survey of Households, 2017).
Unemployment fell drastically between 2003 and 2008 and, except for 2009, stayed below 8 percent until 2016. 6 The rate of precarious work peaked at 56 percent in 2005 and decreased steadily until 2009, when the ripples of the global financial crisis reached the Argentine economy. The breakdown of the conditions that make up the precarious working population provides some valuable information when we analyze its evolution over time. Between 2003 and 2005, against the backdrop of solid economic growth, the rate of precarious work rose even though that of unregistered work barely changed. Similarly, the rate of underemployment, welfare benefits, and temporary work decreased in this period. Therefore, we can safely say that the rise in precarious work during that period was largely driven by the hefty increase in the rate of workers making less than the minimum wage, the underpaid, which skyrocketed from 19 percent to 35 percent in only two years. All parameters fell in the following period, a period characterized by an economic boom that lifted all economies in the region and lasted until 2009.
Right after the brief but profound dip in the gross domestic product (GDP) in 2009, the rate of unregistered work did not move significantly, but the rate of precarious work increased in two consecutive years, breaking the downward trend since 2005. This time the categories driving this increase were underpaid and temporary work. Since 2011–2012, the economy has oscillated between positive and negative GDP growth. The rate of precarious work began to rise in 2015, propelled initially by an increase in underpaid work and later by a combined increase in temporary work, unregistered work, and underemployment. The dependent contractor category oscillated around 0.1 and 0.2 percent throughout the period.
Discussion
These findings provide a more accurate measure of the rate of precarious work in Argentina in 2017 and in the period between 2003 and 2017. The very small number of dependent contractors in the findings suggests that the vast majority of workers in this category are still under the radar despite the attempts to make them visible. However, the method used in the present analysis not only addresses some of the issues with previous measurements but also allows us to specify the components within the variety of precarious working conditions that are driving the overall rate up or down. This information, in correlation with the dynamics of the economy, provides important insight into the interrelation between economic growth and employment relations. The results of the analysis by industry show, in accordance with previous research, that construction and domestic work have the highest concentration of precarious workers.
The long-term increase in precarious employment relations in Argentina fits well with the overall, global upward trend (Charmes, 2009: 46). What remains to be explained is the interregnum between 2003 and 2009–2014, when the rate of precarious work experienced an unequivocal decrease. What was special about this period in Argentina? How can we interpret the fluctuations of the rate of precarious employment to the light of economic dynamics and labor-capital conflict?
The first element to remember is that the 2001 economic crisis was partially resolved by a strong devaluation of the currency. The sharp depreciation of the Argentine peso was followed by high inflation, mainly driven by a sharp increase in the prices of imported goods and utility fees. Unusually high unemployment rates (20.8 percent in 2002) and the thorough precarization process implemented during the 1990s placed workers in a relatively weak bargaining position and barred them from achieving wage increases that could catch up with inflation. This explains the staggering rise in underpaid employment between 2003 and 2005. Labor costs—measured in constant value—fell by 30 percent between 2001 and 2002, restoring capital profitability. This and the existence of a large amount of idle capital were the pillars of the economic growth during the mid-2000s (Mercatante, 2015: 45).
There is another factor that we need to take into account. Before and after 2000, social turmoil shook many countries in South America, paving the way for a wave of center-left governments in the region later known as the pink tide. In the case of Argentina, the 2001 crisis and the resulting mass mobilizations left a political regime in disarray. The crisis of legitimacy forced President Néstor Kirchner, up until then a Peronist in the center of the political spectrum, to take bold action in favor of the working class (employed and unemployed). 7 Some of these measures, such as the sweeping welfare plans for the poor and unemployed, affected the employed working class indirectly, improving their bargaining position, since now, although welfare benefits were meager, they were better than nothing for the unemployed. Other policies had a direct impact on employment and capital-labor relations—for example, the reduction of the probation period to three months with no extension and the prominence given to centralized (national) collective bargaining (Marticorena, 2014: 53–62). However, as is pointed out by Felder and Patroni (2016), among others, these measures were limited and, as later developments showed, easily reversible.
Vigorous economic growth and a tightening of the labor market in the years after 2003 pushed companies to offer higher wages and better employment conditions. Simultaneously, in the period after 2003 a movement of rank-and-file unionism (sindicalismo de base) emboldened by a lower unemployment rate and influenced by left political activists led labor conflicts in a wide array of industries. This militant labor activism dared to challenge the union leadership on several occasions, led brave workplace actions, and secured extraordinary gains (Varela, 2015). The increased labor activism and the radicalism of this movement represents another part of the explanation of the temporary reversal, between 2003 and 2009, of the upward trend in precarious employment in Argentina.
As for the theories that tie precarious employment to an informal sector of the economy, the results in this paper provide evidence for an association between low productivity/low profitability and the use of informal employment arrangements. However, this does not necessarily mean the existence of a dual labor market. On the contrary, the findings discussed above suggest that there is a spectrum of levels of productivity and a corresponding gradual decrease in precarious employment as firm size increases, in line with the theories of labor market dynamics expounded by Howard Botwinick (1993). 8 Moreover, as I have said, different forms of employment relations can coexist within the same company, including both precarious and formal workers under the same roof.
These findings have implications for labor organizing. The dual-labor-market thesis contends that there is a barrier between the informal and formal sectors that allows little or no mobility between them. The implication is that workers in the formal sector, because of the special treatment conceded by monopoly capital (higher wages, more benefits), are more conservative and less likely to engage in direct action or to embrace left-wing politics. This theory relies heavily on the idea of a labor force split in two closed compartments.
Regardless of whether top-tier companies share part of their monopoly profits with workers or whether this fosters conservatism among workers, the evidence presented in this article questions the very existence of a distinct section of the labor market. Furthermore, a nuanced understanding of the labor force with its gradual distribution of precarious work in all its forms allows us to see the possibilities of common organizing among precarious and formal workers, who often work in the same plant, although under different contracts. The failure to do so might be better explained by the conservatism of the union leadership and the divisive tactics implemented by management than by an intrinsically divided labor force. Future research on precarious employment in other South American countries, as well as in other countries of the Global South, might shed more light on the laws and forces determining its rate and fluctuations and the strengths and weaknesses of labor’s efforts to eliminate it.
Footnotes
Notes
Juan Cruz Ferre is a graduate student in sociology at the City University of New York and the editor of Left Voice. His research focuses on Latin America, labor, politics, and health. He thanks Ruth Milkman for her useful feedback on previous versions of this paper and her encouragement to pursue this line of research.