International Labor Organization reveals that labor flexibility does not create recorded jobs in Latin America

What is most striking is that, at least in Latin America, the most flexible countries are not the ones that create the most white jobs, but in many cases have high rates of informal work and unemployment. . For example: Peru leads the ranking of flexibility with 6.9 points, however, 67.8% of its workers, both in relation to dependency and the self-employed, are in the dark and unemployment reaches 7, 5%, according to the latest data from the International Labor Organization (ILO)

Compared to Peru, Argentina is ninth among the 18 countries assessed in Latin America by Fraser, with 5.1 points, and has less informal work, 47.9%, but more unemployment, 10.2%.

After Peru, the Dominican Republic appears, with 6.1 points, with moonlighting of 52.7% and unemployment of 8%. The podium of flexibility is completed by Costa Rica, with 6 points, a black job of 38%, but an unemployment rate of 18%.

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According to this index, the countries with the most white jobs in Latin America are: Uruguay, with 22.6% black jobs and a labor flexibility indicator of 5.9 points, the fourth highest in the region ; Panama, with 25.7% and Chile, with 27.2%, both with 5 points, have a little more than rigid working frameworks than Argentina’s.

“It doesn’t surprise me that there is no correlation between flexibility, unemployment and the informal. Limiting the discussion to labor law has two implications: on the one hand, it implies an advance on working conditions of 50% which still have some coverage in terms of rights without any positive effect on the rest; on the other hand, it masks the need to discuss the structural causes that prevent greater job creation and the formalization of those that exist, ”he says. Luis Campos, coordinator of the Social Law Observatory of the Central de Trabajadores de la Argentina (CTA), in dialogue with the journalist Alejandro rebossio.

In this sense, he adds: “Unfortunately, there are no easy answers: we have to play with the productive structure and the problems that arise from a process of simplification and reprimarization of the economy, where the competitive sector is capital intensive, so it requires little labor, while uncompetitive sectors can only survive with strong protection, unsustainable in the long term, and with low wages, or a strong dollar, which is more or less the same. “

A few days ago, Campos explained in a Twitter thread that “over the past 13 years, the construction sector”, where unemployment insurance rules instead of compensation, as proposed Together for change for the economy as a whole, “it did not create more jobs than the rest of the business.”

For its part, Matias Maito, director of the Center for Training and Studies on Work and Development (CETyD) at the University of San Martín, warns that “there is no evidence globally, let alone in Argentina, which confirms that ‘greater flexibility of work improves employment levels and formality “.

“In fact, recent experience in our country could confirm the opposite: in the 1990s, progress was made in flexibilization programs and unemployment and informality increased. In recent years, although the flexibilization standards have not been approved, there has been a considerable reduction in labor costs, wages have lost 20% of purchasing power, which has not not lead to higher levels of employment or formality, quite the contrary. In recent decades, the period of the greatest job creation and the sharpest decline in informality occurred between 2003 and 2008, when part of the flexibilization rules were reversed. An employer takes workers if the economy is growing, not if labor costs are low or the workforce is flexible. Is the best way for the economy to grow to have flexible, low-wage workers? With flexibility only increases inequalities and instability and worsens the situation of workers “, Remarks.

Maito points out that: “In his book ’23 Things They Don’t Tell You About Capitalism ‘, South Korean economist Ha-Joon Chang warns that globally, in the name of’ labor market flexibility ‘ , employment has been destabilized and with it, many lives “.

As an example of the opposition, the leader of the Union of Construction Workers (UOCRA), Gerard Martinez, admit that “In the world, the rise of the offshoring of work, the corporate power of transnational companies, outsourcing and atypical forms of employment in their most contemporary forms, as in platform economies, call into question the industrial model of full employment characterized by the classic dependency relationship ”.

Martínez, who is TC delegate to the ILO, analyzed data on informal work and unemployment in Latin America: “The independence of these indicators from higher or lower levels of national regulations would be observed. . in commerce, industry and the state, as well as social security reforms which implied a reduction in employers’ contributions, which, far from reducing the unemployment rate, doubled it. The quality of employment requires policies allowing the expansion of the productive frontier, an increase in global demand, without implying a solution based on the elimination of workers’ rights ”.

In 2019, when the ILO was 100 years old, it was agreed that its three main objectives were to increase investments in “the capacities of people, in labor institutions and in decent and sustainable work”.

To the Ministry of Labor, which directs Claudio Moroni, limited themselves to criticizing the Fraser Institute index for “methodological problems” and did not analyze its impact on employment in Latin America. They wondered whether this think tank valued as positive the maximum duration of temporary contracts, their use for regular activities or that interns or young people entering the labor market receive less than a minimum wage, which, according to Labor, “attentive against the principle of the ILO” for equal work, equal pay “”.