Date: Sat, 6 Apr 1996 07:50:46 -0600
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> S * IN ACTIV-L
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>>> Item number 9778, dated 96/04/04 01:41:55 -- ALL
Date: Thu, 4 Apr 1996 01:41:55 GMT
Reply-To: Rich Winkel <firstname.lastname@example.org>
Sender: Activists Mailing List <ACTIV-L@MIZZOU1.MISSOURI.EDU>
From: Rich Winkel <email@example.com>
Subject: Oxfam challenges the World Bank's Policies
/** econ.saps: 252.0 **/
** Topic: Oxfam challenges the WB's policies **
** Written 3:24 PM Apr 1, 1996 by gn:oxfamppd in cdp:econ.saps **
Oxfam challenges the World Bank's policies on labour market
Oxfam UK/I, SAPs NEWS, 1 April 1996
On Wednesday 27th March, just a few days before the G7 Job Summit,
an Oxfam UKI policy advisor and Chilean NGO activist researcher
met with World Bank officials to challenge the Bank's labour
intensive export led growth strategy. Presenting indepth research
on Chile's flexible labour market they argued that labour market
deregulation should not should not be considered a magic recipe
for job creation.
Widely touted as a free market success story, Chile has been a
laboratory for labour market deregulation. Yet the research
conducted for Oxfam UK/I by Chilean, Fernando Leiva, contains a
warning for countries wishing to pursue a similar route. Contrary
to the predictions of orthodox economists, Chile's flexible labour
market has failed to deliver growth with equity. Employment
expansion has taken place in low paid, low quality, precarious
jobs creating a new class of working poor, many of whom are women.
The report notes that:
- Between 1990 and 1992 the number of workers in small firms
employing between 2 to 5 people increased by 143,000 of which
59,000 worked inside dwellings
- In 1964-65 there were 208,000 permanent wage workers in the
agricultural sector, one of the main engines of Chile's export
industry, and 147,000 seasonal workers. By 1991-1992, the
number of permanent wage workers had decreased to 100,000 and
the numbers of temporary/seasonal workers had increased to
- In the fruit exporting sector where more than half the workforce
are women, 83% are now employed on a temporary basis and between
40-50% have no contract.
While unemployment has fallen significantly in recent years this
masks widespread under-employment which is not captured by
- A supplementary survey by the National Institute of Statistics
showed that 873,514 women officially classified as "inactive" in
fact worked an average of three and a half months per year.
These women represented more than half the "official" labour
The spread of "flexible" working practices has allowed companies
to bypass government legislation and collective bargaining
agreements leaving workers vulnerable to exploitation. Temporary
and home-based workers are effectively denied the right to
collective bargaining. Most have no job security and are not
entitled to social security benefits such as sickness and
The increase in jobs and wages helped reduce poverty from a high
of 40% of households in 1990 to nearly a third in 1994, finally
reaching the 1970 level before the free market experiment began.
However, despite this recent achievement many Chileans believe
that poverty is unacceptably high for a comparatively wealthy
country which grew at an average of 11% between 1992-1994.
- Low pay and the sporadic nature of work mean that many people
are still unable to earn an adequate monthly income in 1992 43 per
cent of salaried workers earned less than the minimum required
to cover basic necessities, a factor underlying the increasing
numbers of women and children entering the workforce.
Overall inequality increased between 1992-1994 as workers wages
have been unable to keep up with productivity rises while the rich
increased their share of income. The richest 541,000 Chileans
earns the equivalent of the bottom 10 million.
Between 1987 and 1990 rural Chile experienced one of the most
dramatic increases in inequality on record, alongside a rapid
expansion of natural resource based exports.
These trends are contributing to a new generation of social
problems, such as stress, depression, drug abuse, and crime which
psychologists have linked to economic stress.
The report also argues that the incentive structure created by
deregulation are strangling moves to a high value added export
strategy which is widely considered necessary for Chile to move to
second phase of export expansion.
The report titled "Flexible Labour Markets, Poverty and Social
Disintegration in Chile 1990-1994" by Fernando I. Leiva, March
1996, is available from Oxfam UK/I Policy Department. A short
briefing paper by Oxfam UKI is also available titled "The World
Bank's Labour Intensive Growth Strategy: The Case for Reform"'
For further information please contact Ruth Mayne, Oxfam UK/I
Policy Department, tel no: 01865 312279.