Abstract
This article reviews the recent growth period in Latin American and Caribbean (LAC) countries up to the current crisis, to provide an assessment of trends observed in the world of labour. Our assessment includes demographic trends, the employment structure, trends in unemployment and wages and the trajectory of social, racial and gender inequalities. We argue that the LAC region has undergone significant structural changes due to shifting positions in the international division of labour. The rural exodus has persisted, but also the industrialization patterns of the past have given way to renewed emphasis on primary goods exports, as well as new specialization patterns which favour low paying jobs in services or industries of the ‘maquila’ type. The informal, or low productivity, sector has also expanded. The economic boom of the 2000s had some positive distributional effects, but made limited inroads into the established racial and gender hierarchies, which found expression in persisting super-exploitation and extreme levels of violence and mass incarceration.
Introduction
The world economic crisis that erupted in 2008 had a strong and negative impact on the rates of economic growth in Latin America and the Caribbean (hereafter, LAC). 1 Most countries in the region were showing a tendency towards positive and, in some cases, even accelerating growth rates in the first half of the 2000s. There was a small recovery in GDP from 2011 to 2014, but the growth rates remained fragile: On one hand, the preceding boom had provided some space for counter-cyclical policies, but on the other, the region remained vulnerable to the collapse of commodity prices (Ocampo, 2009, p. 703; Figure 1).
The reasons why these specific patterns of economic growth occurred are complex, contingent on the interdependence of domestic and external factors. However, from the point of view of the sectorial composition of the region as whole, two main features stand out during the 2000s, namely deindustrialization and ‘primarization’, that is, the predominance of primary goods exports in response to the higher export prices led by Chinese demand (Rapoport, 2013, p. 176). With the exception of Mexico and some Central American and Caribbean countries where industrialization advanced through the ‘maquilas’, there has been an overall decline in the manufacturing sector as a share of GDP, as well as in the share of industrial employees, and an increase of the primary goods sector as a share of the total exports (Table 1).
In the countries where manufacturing advanced, a special kind of industrialization has emerged based on free trade agreements, low wages and production for the US market, hence devoid of a dynamic role in the economy (Curia, 2011, p. 67). This holds also for countries in South America, such as Peru, Colombia and Chile, where the maquilas are also present, but less intensively; in these countries, the tendencies point similarly towards deindustrialization and the ‘primarization’ of exports. Yet, even the countries that did not sign broad free trade agreements, such as Argentina, Brazil, Uruguay and Venezuela, have come under the substantial influence of China’s foreign trade, in terms of the export of raw materials and import of manufacturing goods. As a recent Economic Commission for Latin America and the Caribbean (ECLAC) survey (2016a, p. 36) observed, countries with direct and indirect exposure to China’s economy face risks associated with the performance of China’s economy.
The majority of the LAC countries saw upward trends in the share of primary goods exports (Table 2). This was the case of Argentina, Brazil, Bolivia, Chile, Colombia, Costa Rica, Ecuador, Jamaica, Paraguay, Dominican Republic, Uruguay and Venezuela. A second group, including Peru and Guatemala, showed stability, with an average of 85 and 37 per cent of primary goods as their main types of exports, respectively. A third group, consisting of Barbados, Belize, Guyana, Honduras, Mexico and Nicaragua, actually experienced a decline in the share of primary goods exports. Curiously, many Central American countries currently have more complex export lists than the larger economies of Argentina and Brazil. In Mexico and the Dominican Republic, primary goods tended to decrease as a share of the total exports, as a result of the high net capital inflows in the manufacturing sector, mainly coming from North American corporations. As we shall see, however, this did not translate into improved social conditions.
Latin America and the Caribbean, Manufacturing as a Share of Annual Gross Domestic Product, Selected Countries, 2005–2014
Latin America and the Caribbean, Primary Goods as a Share of the Total Exports, Selected Countries, 2007–2014
In political terms, between 2000 and 2015 there has been a differentiation in the region among governments that followed: (a) a nationalistic approach to economics and foreign relations; (b) a neoliberal path; (c) a mixed path; and (d) other cases. Venezuela, Bolivia, Nicaragua, Ecuador, Uruguay and Argentina seem to be in the first group, while Costa Rica, Mexico, El Salvador, Peru, Colombia, Honduras, Belize, Panama and most of the Caribbean have been in the second, accompanied by Brazil, Chile and Guatemala in the third and Cuba in the fourth. Evidently, these classifications are subject intense theoretical disputes, and depend on one’s political assumptions (Burdick et al., 2009; Chodor, 2015; Dos Santos, 2016; Leiva, 2008; Petras, 2011; Ros, 2015; Spronk & Weber, 2015). However, it is clear that the emergence of centre-left parties in several countries in the 2000s was far from the general case.
In this article, we review the recent growth period in LAC countries up to the current crisis to provide an assessment of trends observed in the world of labour. Our assessment includes demographic trends, the employment structure, trends in unemployment and wages and the trajectory of social, racial and gender inequalities. We argue that the LAC region has undergone significant structural changes due to shifting positions in the international division of labour. The rural exodus has persisted, but also the industrialization patterns of the past have given way to renewed emphasis on primary goods exports, as well as new specialization patterns which favour low-paying jobs in services or industries of the ‘maquila’ type. The informal, or low productivity, sector has also expanded. The economic boom of the 2000s had some positive distributional effects, but made only limited inroads into the established racial and gender hierarchies, which found expression in persisting super-exploitation and extreme levels of violence and mass incarceration.
Demographic Trends
According to the United Nations Population Division, the LAC rural population peaked in 1990 and then started slowly to decline. 2 From 1950 to 1975, the rural population increased by up to 1.3 times, reaching 141 million people. This trend began to change in the 1980s, due to the decline of birth rates but also the process of urbanization. It is expected that the rural population will decline to 112 million in 2030, and to approximately 107 million in 2050. Yet, in relative terms, the share of rural population was only 19 per cent in 2015. Meanwhile, the urban population has more than doubled, from 197 to 502 million people in 1975–2015. Thus, overall, Latin American countries have become more and more urbanized in recent decades (see Figure 2). These changes have not been equally distributed, and the different rates of urbanization are able to explain, at least partly, the different social conditions faced by the Latin American workers today. For example, in 1980–2015, the urban population increased by 2.14 times in Brazil, 2.29 times in Colombia, 2.91 in Ecuador, 3.39 in Paraguay, 4.44 in Guatemala.
Given current birth rates, the total LAC population will be growing for at least another 35 years, reaching approximately 781 million people in 2050. Although the rate of total demographic growth began to decline after 1970, it will reach zero only in 2050. Thereafter, the total population will begin to fall. This means that total population will be growing for many years, together within an increasingly ageing population. This situation poses the obvious challenge of coping with the high levels of poverty, high urban population rates and currently low economic growth, under conditions of a still growing and ageing population. As Milton Santos (2013 [1978], p. 57) observed, the growth model adopted added to the demographic explosion to result in an urban explosion and a concentration of both wealth and poverty in the cities (Santos, 2013[1978], p. 57).
Indeed, trends point to an increase in the population living in cities with above 100,000 people. In 2000 (the year of the last available data), this was the case for more than 62 per cent of the population in Argentina, 63 per cent in Chile, 50 per cent in Mexico, 53 per cent in Peru and 49 per cent in Brazil. 3 On the other hand, Cuba combined a lower rate of population growth (1.04 in 1955–2015) with a lower rate of urban population growth (1.37, in the same period). Cuba also had only 39 per cent of its population in 2000 living in cities with more than 100,000 people. This condition explains, in part, the better social conditions in the island compared to LAC countries—which have had an average increase of 2.32 and 3.24 times in population growth and urban population growth, respectively, in the same period (1955–2015; see Table 3). Theoretically, the poor should have benefited from the fact that in 2005–2015, the rate of GDP growth was higher than the rate of population growth. However, distributional issues have qualified this, to which we will return.
Latin America and the Caribbean, Rate of Population Growth and Rate of Gross Domestic Product Growth, Selected Nations, 2015/2005
Employment Trends
The LAC region witnessed a process of intense urbanization, due to what Joan Robinson (1979, p. 134) once called ‘the Latin America type of agribusiness which monopolizes great areas of land to supply profitable markets in the West’, associated with intense mechanization and land dispossession. In Mexico, Argentina and Brazil, this urbanization was once combined with a rapid process of accumulation of industrial capital in the metropolitan areas, which partly absorbed migrants from poor areas. But even so, it could not trigger a satisfactory process of economic and social development—not to mention the cases in which there was no significant accumulation at all.
The transfer of the rural population to urban areas has occurred without sufficient capital accumulation in the urban areas to compensate for the rural exodus. 4 This has created a historic impasse, whereby the labour force released from the countryside is not absorbed in adequate employment (Santos, 2007, p. 42). The case of Brazil is the most radical example, as this country, with the largest territory among the LAC region, has never implemented any significant policy of land reform—in contrast to Bolivia, Mexico, Cuba or to a lesser degree Chile, Venezuela, Costa Rica and Peru. 5 As mechanization advanced in the countryside, the result has been one of rural exodus and urban poverty.
Beyond industry, ‘modern services’ (some of them necessary, but unproductive in material terms) historically have absorbed part of the migrant rural workers in the LAC region. Another part is taken up by so-called ‘services’ which are constituted by the economic activities of millions of poor working people, including domestic workers, waiters and waitresses, garage mechanics, sellers, drivers and diverse forms of self-employment—this constituting the majority of the modern urban proletariat in the LAC region (not to mention ‘illegal’ activities, which are more difficult to gauge).
We may begin by observing that the share of women in the total employment has been growing. In the period between 1999 and 2013, the share of women in employment increased from 53 to 60 per cent in Bolivia, from 43 to 50 in Brazil, from 31 to 44 per cent in Chile and from 38 to 55 in Paraguay. In the same period, women reached 51 per cent of total employees in Colombia, 42 per cent in Mexico and 45 per cent in Venezuela. For Latin America as a whole, the average share of women employed was 49 per cent in this period. 6 Latin American employees are now more or less equally divided between men and women.
Available statistics show that in Latin America as a whole the majority of the total occupied population in the recent years is being employed in the service sectors, above both agricultural and industrial sectors (see Figure 3). The overall scenario of employment in Latin America in recent years is characterized by falling numbers of workers in agriculture, stagnation in industry/manufacturing and the advance of services. Among the latter, tourism became especially important to Cuba, Bahamas, Belize and other Caribbean nations, while financial services also spread generally, sometimes even as a conduit for money laundering (Bahamas, for example). Between 1997 and 2015, the share of workers employed in the services sector increased from 70 to 77 per cent, while the share of industrial and agricultural workers fell from 13.6 to 12.5 per cent and from 3.5 to 2.6 per cent, respectively (all data in weighted average).
Indeed, there has been a dramatic drop in the share of agricultural workers in almost all of LAC countries since the 1990s—a drop which was not interrupted by the 2008 crisis, including among the countries with the highest shares. In Bolivia, the share of agricultural workers declined from 40 per cent in 1997 to 29 per cent in 2014. Similarly, in 1989–2014, the share fell from 48 to 33 per cent in Guatemala, from 25 to 14 per cent in Mexico and from 13 to 7.4 per cent in Venezuela. In 2014, the share of agricultural workers stood at 14 per cent in Brazil, 9 per cent in Chile and 1.5 per cent in Argentina. Ecuador, Peru and Dominican Republic followed a similar path, though to a lesser extent.
In this light, the historic impasse indicated above is also posed as a question of how to reconcile an overall rise of productivity in agriculture with a permanent increase of an urban population, under conditions of a low rate of capital accumulation, that is, a low capacity to employ rural migrants in urban jobs. The fact that the most rural nations in the region, such as Bolivia, El Salvador, Guatemala, Honduras, Nicaragua and Paraguay, are also the poorest, show that a mere allocation of the workforce in the rural areas is not enough to alleviate poverty.
If we take into account the urban share of total employment, it is possible to see that, since 2005, there was a remarkable stability among its sub-groups, with falling rates of unemployment. Amidst the new ‘populist wave’, 7 some governments implemented progressive social and economic policies, but the economic structure in many of them did not suffer qualitative changes, in terms of industrialization or a return to the countryside. In fact, according to the official data, as mentioned earlier, many LAC countries increased their degree of ‘underdevelopment’, with the expansion of services not reflecting positive changes in production or the establishment of conditions for overcoming existing super-exploitative labour regimes.
Between 2005 and 2014, half of urban workers were employed in what ECLAC calls ‘low productivity’ jobs, also called ‘informal’, or what Santos (2013 [1978]) defined as the ‘inferior circuit’. This sector presumably excludes industry and agriculture and includes mechanics, craftsmen and artisans. Over the last 10 years, the share of ‘low productivity’ workers declined slightly from 46 to 43.3 per cent (in weighted averages). The ‘unskilled in commerce and services’ have constituted the second major group of urban workers; its share fell by 1 per cent from 2005 to 2015. The third major group is constituted by the so-called ‘microenterprise wage earners’, whose share in the total is very stable (see Figure 4).
Domestic employment fell from 6 to 5 per cent of total urban workers. ‘Employers’ constitute only an average of 3.5 per cent, this also being a very stable category. Indeed, since 1989, ‘employers’ have not been more than 3.5 per cent of the total urban population, showing that only a small fraction of the society tends to own the means of production. Figure 4 shows the trends relating to the types of urban work in Latin America, since 2005. There has been only a slight improvement in the ‘quality’ of urban jobs in Latin America (i.e., less ‘low productivity’) and a stable path concerning the rest.
In relation to the rural share of Latin American workers, 8 the poverty rates are, in general, higher than in urban areas (sometimes two times or more)—excluding only Uruguay and Chile, where poverty rates in rural areas are lower (there is no data regarding Argentina). Guatemala, Honduras and Nicaragua appear as borderline cases, with more than 70 per cent of the rural population living in poverty. The general differences between rural and urban areas, though diminishing in many cases, explains on the surface why the rural exodus continues. 9
A general process of ‘proletarianization’ of rural working families is occurring, alongside the declining share of workers employed in agriculture. While the employers are no more than a small and stable fraction of the total, with an average share of 5.4 per cent in 2015, ‘employees’ increased from 38 to 45 in 1998–2015. ‘Self-employed and unpaid family workers’ fell from 58 to 49 per cent in the same period. Workers specifically in agriculture, as an average share of the total rural workers, fell from 43 to 35 per cent. The share of workers in agriculture fell in Bolivia, Brazil, Chile, Costa Rica, Ecuador, Honduras, Panama, Paraguay and Uruguay; particularly in Mexico, the share of workers in agriculture dropped from 34 to 25 per cent in 1989–2000 and from 18 to 14 per cent in 2008–2015 (see Figure 5). 10
This general trend hides some differences, as some nations implemented different types of land reforms, leading to the formation of a group of ‘petty bourgeois’ producers with better social conditions when compared to the dispossessed. Mexico, which underwent an agrarian revolution (1910–1920), as Bolivia, which passed through a revolutionary process in 1952, and Uruguay, which had some distribution of land during the popular administration of José Battle y Ordóñez (1903–1907 and 1911–1915), all have the higher relative shares of rural employers, with an average of 11 per cent of the rural working population, in 2012. They are followed by a second group above the average, with Costa Rica and Venezuela, which also have implemented some (limited) policies of land redistribution. Brazil, Guatemala, Honduras, Panama and Dominican Republic have a share of ‘employers’ below the Latin American average, at 5.4 per cent in 2014. In Brazil, only 1.6 per cent of the total rural working population was considered as such, followed by Colombia and Paraguay, which stood at 3.9 and 5.1 per cent, respectively.
The average share of ‘employees’ in the rural areas also has shown important differences among the countries of the region. Despite the falling birth rates and continuing rural exodus (both reducing relative surplus population and the very quantity of labour), ‘proletarianization’ increased after 2008–2009 in Brazil, Chile, Costa Rica, Ecuador, Mexico, Panama, Paraguay and Peru, by a combination of ongoing mechanization, land dispossession and unsolved land conflicts. This process of ‘proletarianization’, however, did not occur in the Dominican Republic (where the rate is more or less stable since 2009), El Salvador and Bolivia (where the rate is, in fact, dropping since 2007). Bolivia has one of the lower rates of urbanization in the region, around 60 per cent, and the lowest rate of ‘employees’ in rural areas in 2014—only 12 per cent of the rural population, as opposed to ‘self-employed’ workers. The employees’ rate reached 16 per cent in 2004. Apparently, some land distributions and nationalizations undertaken by the Evo Morales government had some effects in preventing the above-mentioned process of ‘proletarianization’, despite its contradictions (Dos Santos, 2016, p. 198; see Figure 6).
The general decline of workers in agriculture, in turn, was accompanied by a general increase of agricultural productivity in several LAC countries. 11 However, in Barbados, Cuba, Jamaica, Panama, Trinidad Tobago and countries in the Caribbean, productivity remained stable or dropped. With respect to those countries which saw an increase in agricultural productivity, the increase was higher than the rate of the population growth. Within a decade, the indices of agriculture and food production increased by 43 per cent in Peru, 30 per cent in Argentina and Venezuela and 15 per cent in Mexico. Nonetheless, such higher production was not sufficient to eliminate dependence on food imports, such as in Venezuela and Bolivia, in part because it consisted of commodity exports such as soybeans.
Unemployment and Wages
The official overall rates of unemployment in LAC countries fell between 2003 and 2008 (Figure 7). It was, in fact, a remarkable performance in light of the dramatic situation posed by the neoliberal tide since the 1980s. The average rates of unemployment reached 12 per cent in 2003 and fell continuously to approximately 7 per cent in 2008. We do not ignore the methodological limitations of unemployment estimates—which are based on unemployed workers who are in search of employment in the formal sector and exclude unemployed workers in the informal and rural sectors (Agenor & Montiel, 2000, p. 78). A structural type of ‘disguised unemployment’ persisted in LAC economies during 2003–2009, perhaps at a level much higher than 8 or 10 per cent. However, the case for the official unemployment rates is still valid as a ‘proxy’ variable, in terms of a general analysis of the aggregate performance of these economies. Unemployment rates clearly dropped since 2003, after almost 14 years of a dramatic deterioration in labour market conditions (1990–2003). Yet, urban unemployment rates in the 15–24 age group remained the highest among all age groups, reaching an average rate of 17 per cent in 2005 and 15.1 per cent in 2014. 12
The average rate of unemployment fell continuously between 2003 and 2015, with the exception of 2009, due to the uncertainties of the world economic crisis, the credit crunch and trade shocks. There was a slight recovery in 2010, but the crisis endured in the form of lower unemployment, even if not uniformly. Two major groups, in fact, appeared, one for which the rate of unemployment in 2015 was higher than in 2007, and another for which it was lower. But in most of the countries, official unemployment rates were lower in 2015 when compared to the pre-crisis levels, including Argentina, Cuba, Uruguay, Chile, Colombia, Paraguay, Peru and Venezuela. It is worth adding that, according to the International Labour Organization, trade union membership over these years was stable or declined, with the exceptions of Chile and Uruguay. 13
In Cuba, where the official rate of unemployment is the lowest in the region, it more than doubled in 2009–2012, from 1.7 to 3.5 per cent, and then it dropped again, reaching 2.4 per cent in 2015 (Table 4). In Mexico, which had suffered a severe contraction in 2009, the unemployment rates fell continuously in 2011–2015, from 5.6 to 4.7 per cent, in 2015. On the other hand, in Costa Rica, El Salvador, Honduras, Jamaica and Brazil, the unemployment rates in 2015 were higher than in 2007, with Brazil pushing upwards the LAC average rate. This also partly explains Brazil’s political instability and acute political conflicts at present.
Latin America and the Caribbean, Unemployment Rates, Selected Countries, 2006–2015 (%)
Thus, the unemployment rates reacted distinctly after the 2008 crisis, revealing the differences in the region in terms of economic structure, foreign trade relations and domestic policies, as well as their different rates of population growth. Whether the labour market among LAC countries will converge in the following years will depend on various factors, external and domestic, including government capacity or will to manage economic forces, not entirely dependent on foreign trade. In effect, the declining rates of GDP growth have impacted adversely on job creation, which decelerated from 3.1 to 0.8 per cent in 2012–2014, and which is likely to continue to decelerate for the region as whole (Economic Commission for Latin America and the Caribbean [ECLAC] and International Labour Organization [ILO], 2016, p. 11).
The performance of wages over time is a relatively good proxy of the performance of real wages in any country, and, in a broader sense, of the prevailing social conditions and the state of class relations. Real wages can be assessed according to different methodologies; here we will analyse the performance of minimum and average wages. In general, minimum wages are institutionally determined, by some criteria; while total average real wages are a sum of all wages paid, divided by the number of workers and deflated by any realistic inflation index. Of course, if minimum wages tend upwards, real average wages will also tend to rise. Both of them are subject to class conflicts; but the minimum wage, when it exists, is a legal basis for wages in general. All workers benefit from an increase in minimum wages, but among different kinds of work, wages differ. Be that as it may, both minimum wages and real wages cannot rise unless there is (a) a fall in unemployment rates and an increase in economic surplus to be divided among the classes, or (b) intensification of class struggles.
The ECLAC does not furnish data concerning average wages for all LAC countries. 14 A more detailed assessment would require data more comprehensive than those at our disposal, as well as a qualitative analysis to capture tendencies towards the erosion of working conditions, including situations of personal dependence analogous to slavery. The general performance of real wages also conceals important differences among countries. On one hand, as Ocampo observed (2009, p. 718), exchange rate appreciation was a common feature among LAC countries, which contributed to a rise in real wages, despite the deterioration in current accounts which it also caused. On the other hand, experiences have varied. In Argentina, Paraguay, Uruguay and Nicaragua, the average real wages recovered from the earlier 2001–2002 crisis, to rise until 2015. The same occurred in Brazil, but real wages dropped significantly in 2015. In Bolivia, wages dropped after 2006, and then recovered, but without reaching pre-2005 levels. The same occurred in Costa Rica, but wages recovered and were higher in 2015 than in 2009. In Chile and Colombia, the performance of real average rates showed ongoing growth. In Mexico, average rates increased from 1999 to 2007 and then stagnated. In Venezuela, real wages have been dropping since 2003, except for the short period between 2006 and 2008.
There is not a unique institutional methodology to determinate minimum wages in the LAC region. 15 Some countries have different minimum wages for different types of work (agricultural and urban employment, in Guatemala, for example), or different domestic regions (such as Mexico and Brazil). The pattern of the historical minimum wages is also not the same among the LAC countries; they are explained mainly by domestic variables, or more precisely, by the way in which every LAC country developed (or underdeveloped) and also suffered (or managed) the consequences of the changes in the international division of labour over time. It is not always possible to conceive an inverse relation between ‘neoliberalism’ and ‘real wages’, because the later also depends on broader considerations based on foreign trade and the domestic economic structure. But in the case of Brazil, Argentina, Uruguay, Bolivia, Ecuador and Mexico this inverse relation can be postulated.
In the case of Argentina, minimum wages were artificially increased during the dollarization period of the 1990s; the devaluation in 1991 was then followed by an extreme drop in real and minimum wages. Along the 2000s, during the Néstor and Cristina Kirchner governments, minimum wages recovered. In the case of Brazil, the increase in the minimum wages since 1990 was not sufficient to change drastically one of the worst concentrations of wealth in the world. During the governments of Lula da Silva (2003–2010) and Dilma Roussef (2011–2016), minimum wages were increased according to GDP growth and inflation rates. This situation, coupled with soaring exports and a decreasing rate of population growth, led to an overall increase in the real wages, as well as a decline in the Gini index.
In Mexico, from 1980 to 1993, minimum wages lost more than half of their real value, and lost further after the signing of the North American Free Trade Agreement in 1994. From 1995 to 2014, they continued to fall, under a succession of ‘neoliberal’ administrations, of Vicente Fox, Felipe Calderón and Enrique Peña Nieto (2000–2016). In all, by 2014, minimum wages were reduced to one-third of their value in 1980. Uruguay is in the middle ground, as it saw its real minimum wages drop drastically from 1985 to 1997, during the external debt crisis. The emigration rates from the former so-called ‘Latin American Switzerland’ to other nations accelerated. Then, with the election of Tabaré Vásquez (from the left-wing Frente Amplio coalition, with former guerrilla leader Raúl Sendic as vice-president), minimum wages recovered by the successive enactment of laws (since then, the Frente Amplio has won all presidential elections).
In Venezuela, the neoliberal policies adopted during the 1990s have also had negative consequences for minimum wage policies, with wages falling from 1992 to 1999. During the first government of Hugo Chávez (1999–2001), the situation slightly improved, but not enough to prevent a new deterioration. The rise in the price of crude oil allowed the government to raise the minimum wage anew, but, as the Venezuelan economy remained largely dependent on this commodity, it was not possible to obtain a sustained rise in minimum wages, which have been declining since 2007. The recent decision by the OPEC to cut crude oil prices had a particularly dramatic impact on Venezuela, which helps to explain not only the performance of wages but also its political instability, which has intensified in the chavista government of Nicolás Maduro (since 2013).
In other ‘neoliberal’ experiences, such as those of Chile, Colombia and Peru, which signed free trade agreements with the USA over recent years and whose foreign trade depends heavily on commodities, the minimum wages increased during the 2000s—unlike neoliberal Mexico. From 2000 to 2014, minimum wages in Chile, Peru and Colombia increased by 49, 26 and 18 per cent, respectively, helped by soaring exports and cheaper imports, including appreciated exchange rates. It is worth noting, however, that in the ‘non-neoliberal’ Bolivia of the Movimiento al Socialismo (MAS), and in Ecuador, where the nationalist President Rafael Correa was elected in 2007, this pattern was also verified. On the other hand, Jamaica, Cuba and Paraguay saw their minimum wages drop after 2005 (see Table 5). Finally, although in real terms, most LAC countries tended to make gains in minimum wages, their rates of increase all declined after 2012.
Social, Racial and Gender Inequalities
LAC societies continue to be highly unequal, with class relations being strongly conditioned by race and gender hierarchies, in line with the neocolonial paradigm. Born of genocide and slavery, most LAC societies are devoid of national cohesion, despite commonalities of language and religion in many countries. The national ideologies that emerged post-slavery reinstated the genocidal project, seeking to eliminate completely or reduce and suppress permanently black and indigenous peoples. Myths of nationhood evolved in the twentieth century to weave a mixed-race, populist ideal under the control of the European settler element, which served the double purpose of projecting a benevolent view of the colonial past and denying black and indigenous people of their non-European origins (save for folklore). The genocidal project persisted in a sui generis neocolonial form, officially disregarding racial cleavages while organizing class relations precisely by race and propping up gender hierarchies in the interest of the same neocolonial order. The official recognition of institutionalized racism in several LAC countries in the more recent decades, on account of the emergent indigenous and black movements, has thrown the neocolonial paradigm into crisis, but has not overcome the problem.
Latin America and the Caribbean, Selected Countries, Minimum Wages, 2007–2015 (2000 = 100)
Thus, the world of labour in the LAC region continues to be a world of severe inequalities, segregation and extreme violence. Inequalities exist between ethno-racial groups, between different sexes, between social classes and occupations, and between rural and urban populations. Black and indigenous women are generally employed in the lowest paying jobs; rural workers earn less than their urban counterparts; industrial workers earn more than service and agricultural workers; and whites are far wealthier and politically established than blacks and indigenous people. LAC societies are typically divided by a white and rich minority group—the ruling classes—and a black and indigenous majority which constitutes the bulk of the working people.
The economic boom of the 2000s followed a wave of democratic transitions in the 1980s and 1990s, which brought about a measure of relief. For example, the Gini coefficient in LAC countries generally improved during the 2000s, on account of the improved levels of employment which redistributed part of the economic surplus in the form of higher wages. Economic growth, when it occurs under minimally democratic conditions, is capable of redistributing wealth, and if this is coupled with lower population growth, the redistribution tends to be stronger. Low unemployment rates also tend to facilitate trade union organization and the strengthening of labour. This has been the recent experience of LAC countries, generally, whereby the concentration of wealth declined in 2000–2014, as unemployment rates dropped. Wealth concentration as measured by the Gini coefficient was lower in 2014 than in 2002 or 2003, in all selected nations (Table 6).
On the other hand, the Gini coefficients of the LAC region are still higher than the average of the ‘Very High’ and ‘High’ Human Development Nations, according to the methodology of the United Nations (2015, p. 216), whose averages stand at 0.327 and 0.397, respectively. Even the data regarding Venezuela, Mexico and Brazil, formally ‘High Development Nations’, remained above their poorer counterparts with regard to the Gini coefficient. Thus, excluding Uruguay, the increases in GDP and the higher wages, in most of the LAC countries in the 2000s, were not sufficient to lead to a pattern of wealth distribution similar to those existing in the majority of the ‘developed’ nations.
Another indication of measured improvement concerns the urban populations. Between 2000 and 2014, the rate of urban populations living in slums generally decreased, by as much as half in some cases, as in Argentina (from 30 to 15%) and Costa Rica (from 10 to 5%). Other countries showed slower rates of reduction, such as Brazil (from 29 to 22%), Colombia (from 17 to 13%) and Guatemala (from 42 to 34%), while countries such as Ecuador, Panama and Suriname did not experience improvements in this regard. In Haiti, the rate actually increased from 70 to 74 per cent in 2005–2015, under the impact of the 2010 earthquake. Thus, the overall improvements did not include all nations. 16
Latin America and the Caribbean, Selected Countries, Gini Index, 2000–2014
Racial and gender inequalities improved during the 2000s, but within the established hierarchies. According to ECLAC (2016b, p. 30), in 2014, 22 per cent of the Afro-descendants in Brazil were poor, compared to 10 per cent of Whites; in Ecuador, 42 per cent of Afro-descendants were poor, compared to 27 per cent of Whites. In Guatemala, 72 per cent of Indigenous were poor, compared to 59 of non-Indigenous; in Paraguay, 61 per cent of Indigenous were poor, compared to 30 per cent of non-Indigenous. In Bolivia, 42 per cent of Indigenous were poor, compared to 34 per cent of non-Indigenous. In all LAC countries, Indigenous were only 9 per cent of the richest quintile. Unpaid labour time performed by women was still at least twice that of men, in 2014–2015; in Mexico, women’s unpaid working hours were almost three times higher than men’s in 2014. 17 On the other hand, it is worth noting that the average working hours of employed women aged 15 and over declined in all LAC countries during the 2000s (the available data suggest that working hours have declined for all workers). 18
Differences in education levels and incomes also remain stark, despite some improvements. In Brazil, Ecuador, Peru and Uruguay, Afrodescendent men obtained an average of 6.7 years of schooling in 2014, compared to 9.1 years among White men (ECLAC, 2016b, p. 38). Afro-descendant women obtained, on average, one additional year of schooling in relation to Afro-descendant men. Yet, Afro-descendant women earned little more than half the income of Afro-descendant men (ECLAC, 2016b, p. 38), while the latter received less than non-Afro-descendants in all levels of education. Even among the most educated, Afro-descendent men with a college degree earned, on average, only 75 per cent of the income of non-Afro-descendants; the earnings were still lower for Afro-descendent women with college degrees.
One of the most overlooked aspects of the recent period in the LAC region is the high level of violence that persists. On one hand, homicide rates (per 100,000 habitants) declined in the majority of the countries of the region in the 2000s. Indeed, if we consider homicide rates as being positively related to poverty, we could expect a reduction in poverty to be followed by a reduction in homicide rates. On the other hand, important cases, such as Venezuela and Mexico (since 2007), have experienced increased violence. 19 While a more careful analysis of race relations—in all cases, including the exceptions—is capable of revealing a more complex result. In Brazil, for example, while homicide rates eventually slowed, they have remained at civil war levels. In 2009, for example, at a rate of 30.5 homicides per 100,000 inhabitants, as officially reported by the ECLAC, the number of total homicides was approximately 60,000 people. Moreover, the relative share in the total homicides related to Afro-descendents, particularly young men, increased. The data show that 46 per cent more blacks died than whites in 2002, and this proportion increased to 67 per cent in 2005 and 103 per cent in 2008 (Instituto Sangari & Waiselfisz, 2011, p. 154). Thus, despite the improvements in wages and inequalities measured by the Gini coefficient, black men died violent deaths at more than double the rate of whites. This suggests that the socio-economic advances that have occurred within the established hierarchies have not necessarily improved race relations but, instead, have aggravated them. It is also interesting to note that suicide rates were higher in 2008 as compared to 2000 or 1990, in almost all LAC countries. 20
The contradictory tendencies above in the world of labour gain even more complex dimensions if incarceration rates are considered, which increased in the majority of the LAC countries during the 2000s (Table 7).
Indeed, the upward tendency in the incarceration rate was widespread, excluding only Ecuador and Honduras. In Brazil, El Salvador and Uruguay, the rate of incarceration was 2.29, 2.93 and 2.49 times higher, respectively, than the rate of population growth. The fact of rising incarceration rates at a time of falling unemployment leads us to a more realistic evaluation of the type of economic growth that LAC countries have experienced. In Brazil, for example, if we add, for 2009, the approximately 60,000 people murdered to the approximately 529,000 individuals incarcerated (approximately 264 per 100,000 inhabitants), and deduct the total murdered and incarcerated from total economically active population of 99,193,885 people, the official rate of unemployment for 2009 would have to be at least adjusted from 9 to 9.5 per cent.
It lies beyond our scope here to analyse fully the dynamics of such genocidal levels of violence and incarceration, which afflict disproportionally non-white youth. Much of the incarceration and violence, for example, relates to petty crimes and also the fact that the drug trade is criminalized and gun possession highly diffused. There is also a technical and institutional apparatus that feeds on repression and violence, including the diffusion of security cameras, the privatization of prisons and the setting of ‘minimum goals’ to justify state security budgets. To aggravate the ‘public security’ situation further, there has been an evolving region-wide ‘war on drugs’ propagated by US imperialism since the 1980s, whose effect has been to militarize the contradictions of a development model that has consistently produced a large and expanding reserve army of labour.
Latin America and the Caribbean, Selected Countries, Rate of Population Growth and Rate of Imprisonments, 1995–2010
Conclusion
The LAC region experienced improvements in social conditions in the 2000s. However, the gradual unravelling and restructuring of industrial sectors since the 1980s, and the ongoing denationalization of economies, all contributed to an intensification of the effects of the world economic crisis that struck in 2008. The improvements in social conditions became unsustainable, both economically and politically, as implicit and fragile class/race/gender pacts came undone, especially after 2014–2015, and the ruling classes of the region—perennially fascist in their basic reflexes—reclaimed the initiative in the interest of ‘public security’ (Barbosa, 2009).
The rural exodus persists, but the rate of population growth is decreasing. The region still relies heavily on primary commodity exports. Excluding Mexico and some smaller countries, the contribution of industry to GDP declined, while the majority of the workforce is still allocated in ‘low productivity’ jobs. The transition to a peripheral ‘post-industrial’ or ‘post-fordist’ regime of low accumulation, based on primary production and persisting super-exploitation in new activities, has also led to an overall change in the way working people pursue their livelihoods and organize themselves.
Overall, the falling rates of population growth in the region pose a new challenge to the ruling classes: within two or three decades, an important part of the reserve army of labour will retire—and there are no grand immigration solutions here. The ruling classes in the region are likely to opt for increasingly authoritarian means to solve the question of a declining reserve army of labour—given the low capacity of producing an economic surplus for the maintenance of class and racial hierarchies—just as they have sought historically to solve the question of a bourgeoning reserve army of labour.
It has been beyond our scope here to pursue at length the sociopolitical consequences of the above structural changes. Nonetheless, by way of conclusion, it is worth noting that the consequences have been, indeed, substantial. The spread of drug production and trafficking has continued to penetrate society and politics, especially in countries such as Colombia, Mexico and Brazil, as well as the Caribbean. Meanwhile, trade unionism in many countries has subsided, together with deindustrialization, while churches have advanced rapidly among working people, especially Evangelical churches. Yet, another feature of LAC society is the often strong presence of rural movements and landless peoples’ movements, both urban and rural, which serve as organizing centres of the reserve army of labour, in competition or co-existence with the expanding influence of churches. Black, indigenous and women’s movements have also been on the rise, becoming among the most combative in a number of cases.
Footnotes
Acknowledgements
We would like to thank Jorge Américo de Toledo, Sammer Siman and Yu Huang for reading and commenting on the ideas presented in this text.