Skip to main content
Labor reform: learning to listen

When it comes to changing the relationship between workers and employers, debates in São Paulo or Managua tend to sound much like those in Paris or New York. In both the industrialized and the developing world, the arguments are old and intractable: workers want job security, better benefits, higher wages. Companies demand more flexibility in hiring, firing and pay, especially now that globalization is making payroll costs a more critical aspect of competitiveness.

In Latin America, as in much of the world, the debate over labor reform is given additional intensity by a not-so-distant history of bitter battles for basic labor rights rights that workers are understandably determined to preserve. Perhaps that is why, as IDB President Enrique V. Iglesias recently put it, labor market modernization is still a "pending task" in practically all the region's countries.

Speaking to a group of labor ministers from Central American countries at the IDB's Washington, D.C., headquarters last November, Iglesias acknowledged that efforts to improve labor laws including some promoted by the IDB itself often provoke strong reactions. Responding to criticism that labor market reforms are "anti-worker," Iglesias said the IDB does not want to see a return to the "savage capitalism" of the past. It is not encouraging countries to "bury the social conquests ," but rather, "to extend those protections to society as a whole, and particularly to the 30 or 40 percent of the labor force that works in the informal sector."

The IDB has never had a "one-size-fits-all" policy toward labor issues in the region. Recognizing that each country and each legal tradition is unique, and that lasting solutions to labor market problems must emerge from genuine consensus, the Bank has instead chosen to promote structured dialogues between labor leaders, corporations, the government, and increasingly a variety of civil society groups that represent informal workers and the unemployed.

These dialogues, often referred to as concertaciones in Spanish, are no panacea. But in countries as varied as Germany, Italy and Chile, they have succeeded in breaking political impasses by producing a mutually agreed-upon framework for productive negotiations.

The Bank is also committed to supporting and learning from union leaders themselves. During the last two years the IDB has funded a program co-sponsored by the Inter-American Regional Organization of Workers and the Caribbean Congress of Labor to train 252 union leaders from across the region in labor economics and the policy impacts of globalization. Universities in Brazil, Costa Rica, Chile and Jamaica hosted the three-week courses, which were offered twice a year.

As this issue of IDBAmerica goes to press, the Bank in February is preparing to host 15 prominent union leaders from borrowing member countries for a workshop to discuss the impact of the information revolution on labor markets. The leaders will meet with President Iglesias, share their concerns with IDB labor specialists, and undoubtedly enrich the Bank's understanding of the hard bargains being struck by workers and employers in Latin America and the Caribbean today. Look for a report on the meeting in a future issue of this magazine.

Jump back to top