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MEETING the EMPLOYMENT CHALLE.NGE - Published in the United States of America in 2006 by Lynne Rienner Publishers, Inc ,, MEETING THE EMPLOYMENT CHALLE.NGE - Published in the United States of America in 2006 by Lynne Rienner Publishers, Inc. 1800 30th Street, Boulder, Colorado 80301 www.rienner.com ISBN-13: 978-1-58826-443-5 (hardcover: alk. paper) ISBN-10: 1-58826-443-2 (hardcover: alk. paper) Contents and in the United Kingdom by Lynne Rienner Publishers, Inc. 3 Henrietta Street, Covent Garden, London WC2E 8LU Published in Switzerland in 2006 by the International Labour Office CH-1211 Geneva-22, Switzerland www.ilo.org/publns ISBN-13: 978-92-2-117947-4 (ILO hardcover: alk. paper) ISBN-10: 92-2-117947-8 (ILO hardcover : alk. paper) © 2006 by the International Labour Organization. Ali rights reserved. List of Tables and Figures Vll Foreword, Daniel Martínez xi Library of Congress Cataloging-in,Publication Data Acknowledgments XV Berg, Janine. Meeting the employment challenge : Argentina, Brazil, and Mexico in the global economy / Janine Berg, Christoph Ernst and Peter Auer. p. cm. Introduction Includes bibliographical references and index. l. Labor policy-Argentina. 2. Labor policy-Mexico. 3. Labor policy-Brazil. I. Ernst, Christoph. II. Auer, Peter. III. Title. HD8266.5.B47 2006 2 The Evolution of the Labor Market in Argentina, 331.l098.-dc22 Brazil, and Mexico 9 2006002390 British Cataloguing in Publication Data 3 Macroeconomic Policy and Employment 45 A Cataloguing in Publication record for this book is available from the British Library. 4 Trade Liberalization, Export Dynamism, and Publications of the International Labour Office enjoy copyright under Protocol 2 of the Universal Employment Growth 73 Copyright Convention. Nevertheless, short excerpts from them may be reproduced without author­ ization, on condition that the source is indicated. Por rights of reproduction or translation, applica­ tion should be made to ILO Publications (Rights and Permissions), International Labour Office, 5 Foreign Direct Investment and the Creation CH-1211 Geneva-22, Switzerland. The International Labour Office welcomes such applications. of Quality Employment 105 The designations employed in International Labour Office publications, which are in conformity with United Nations practice, and the presentation of material therein, do not imply the expression of any 6 Employment Effects of Labor Market Regulations opinion whatsoever on the part of the International Labour Office concerning the legal status of any and Policies 129 country, area, or tenitory or of its authorities, or concerning the delimitation of its frontiers. The responsibility for opinions expressed in signed articles, studies, and other contributions rests solely with their authors, and publication does not constitute an endorsement by the International 7 Social Dialogue and Employment 167 Labour Office of the opinions expressed in them. Reference to names of firms and commercial products and processes does not imply their endorse­ 8 Strategies for Meeting the Employment Challenge 201 ment by the International Labour Office, and any failure to mention a particular firm, commercial prod­ uct, or process is not a sign of disapproval. Printed and bound in the United States of America List of Acronyms 217 The paper used in this publication meets th~ui ·em nts Bibliography 221 8 of the American National Standard for Pe 11a ce of Index 237 Paper for Printed Library Materials Z39. 8- 992. About the Book 247 5 4 3 2 V Tables and Figures Tables 2.1 Educational Profile of Populatian, National Level, 1999 and 2000 13 . 2.2 Urban Labor Force Participation by Sex, May 2003 14 2.3 Sectoral Evolution of Employment, 1992-2001 19 2.4 Contribution to Employment Creation of Selected Sectors, 1991-1999 21 2.5 Distribution of Urban Employment by Firm Size, 1990-2003 23 2.6 Employment Rates by Educational Level, 1992-2001 24 2.7 Structure of Nonagricultural Employment, 1990-2003 27 2.8 Participation in Total Informal Employment by Gender, 1990-2003 28 2.9 Percentage of Workers with Poverty Wages, Urban Areas, 1992-1999 33 2.10 Income and Wage Distribution, 1990-2001 33 2.11 Average Incomes of Labor Force by Rural/Urban Location and Occupation, 1990-2002 35 2.12 Average Annual Hours Worked per Person, Argentina, Brazil, and Mexico Compared to Selected lndustrialized Countries, Various Years 36 2.13 Relative Working Hours, 1992-2001 38 2.14 Distributíon of Job Tenure of Employees Measured as Years on the Job for Total, Skilled, and Unskilled Workers, Argentina and Brazil, 1992-2001 39 2.15 Percentage of Salaried Workers Who Pay into the Social Security System, 1990-2003 40 2.16 Summary of Employment Trends of Selected Indicators 42 2.A Summary Trends from a Gender Perspective 42 vii viii Tables and Figures Tables and Figures ·ÍX 3.1 Average Real GDP Growth Rates, 1960-2003 46 6.5 Proportion of Unemployed Who Have Been Out of Work 3.2 Employment-Output Elasticities, 1981-2002 48 for Three or Fewer Months, as Percentage of Total 3.3 Real Interest Rates, 199.4-2002 65 Unemployed, 1991-2002 156 3.4 Tax Revenue as Percentage of GDP, Argentina, Brazil, and 6.A Regulations on Unfair Dismissal, Early 2000s: Mexico Compared to the OECD, European Union, and Selected Aspects 160 United States, 1992, 1996, and 2000 69 6.B Regulations on Fixed-Term Contracts, Early 2000s: 4.1 Evolution of Average Unweighted Import Tariffs, 1987-2001 74 Selected Aspects 160 4.2 Destination and Origin of Imports and Exports, 1990-2002 77 6.C Unemployment Compensation: Selected Aspects 161 4.3 Main Manufacturing Exports and Their Labor Market Impact, 6.D Labor Market Programs of National/Federal Governments, 1995-2000 81 Early 2000s: Selected Aspects 162 4.4 Evolution of Number of Products Within the Competitiveness 7.1 Number and Type of Unions, Brazil, 1991 and 2001 175 Matrix, 1985-1999 84 7.2 Union Density, Various Years 177 4.5 Rising and Declining Products in World and Regional Markets, 7.3 Existence of Labor Regulations by Large, Micro, and All and Their Employment Impact 86 Firms in Manufacturing, Mexico, 1995 and 1999 181 4.6 Industries Most Exposed to Imports and Evolution of the 7.A Summary of Collective Bargaining Systems 197 Labor Market, 1995-2000 90 4.7 Summary of Trade and Labor Market Variables 100 4.A Competitive Matrix Compared with World and Regional Figures Markets, 1985-2000 100 4.B Labor Intensity per Country: Five Lowest and Highest 2.1 Growth of Working-Age Population, Five-Year Periods, Labor-Intensive Product Groups in Manufacturing 102 1980-2005 10. 5.1 Importance of FDI for Employment in Transnational 2.2 Growth of Economically Active Population, Five-Year Corporations, Selected Countries 111 Periods, 1980-2005 11 5.2 Average Share of Mergers and Acquisitions in FDI Inflows, 2.3a Urban Labor Force Participation and Employment Rates, 1991-1996 and 1997-2002, Selected Countries 117 Argentina, 1990-2002 14 5.3 Types of Foreign Investment and Their Dimension and 2.3b Labor Force Participation and Employment Rates, Importance for Employment 118 Brazil, 1990-2001 15 5.4 FDI Inflows and Their Employment and Wage Impact by 2.3c Labor Force Participation and Employment Rates, Sector, 1993-2000 120 Mexico, 1990-2003 15 5.A Average Wage in Specific Product Categories as Share of 2.4 Urban Unemployment, 1991-2004 16 Average Wage in Total Manufacturing, 1993-2000 125 2.5 Real Urban Manufacturing Wages, 1990-2003 30 5.B Efficiency-Seeking, Resource-Seeking, and Market-Seeking 2.6 Real Urban Mínimum Wages, 1990-2003 32 Investment by Sector, 1990s 126 2.7 Income Distribution, GDP, and Employment, Mexico, 6.1 Share of Temporary Employment in Wage Employment, 1990-2003 34 Argentina and Mexico, 1996-2002 140 2.8 Distribution of Working Hours, Brazil, 2003, and Mexico, 2002 37 6.2 Share of Nonprotected Workers in Wage Employment, 3.1 Real Economic Growth, 1990-2003 47 1991-2002 141 3.2 Exports and Imports, 1990-2001 53 6.3 Unemployment and Unemployment Insurance, Argentina 3.3a Real Wages in Manufacturing, Mexico, 1988-1997 54 and Brazil, 1995-2002 146 3.3b Real Wages in Manufacturing, Argentina, 1988-1997 55 6.4 Unemployment Rates and Labor Market Policy Spending as 3.3c Real Wages in Manufacturing, Brazil, 1993-2002 55 Percentage of GDP,.2001/2002 153 3.4 Outstanding Debt in US$ Millions and as Percentage of GDP, 1993-2002 60 x Tables and Figures 3.5 Deficit Control Through Reduction in Public Spending, Mexico, 1980-2000 68 4.1 Competitiveness Matrix 83 4.2a Exports, Imports, and FDI, Argentina, 1990-2003 97 4.2b Exports, Imports, and FDI, Brazil, 1990-2003 97 4.2c Exports, Imports, and FDI, Mexico, 1990-2003 98 Foreword 5.1 FDI Inflows, 1990-2003 106 5.2 Inward FDI Stocks, 1990-2003 108 5.3 Investment as Percentage Share of GDP, 1990-2003 112 5.4 Sectoral Distribution of FDI: Share of Sum Values, 1992-2002 119 7.1 Number of Strikes, Argentina, 1980-2002 183 7.2 Number of Strikes and Strikers, Brazil, 1980-1999 183 7.3 Number of Strikes, Mexico, 1990s 184 hat policies would be appropriate if the goal of creating employment W were truly at the center of economic and social policies? Would the focus of policies have to be changed, or do present policies accommodate the employment goal sufficiently? This is the basic question addressed by this · book with regard to selected micro, meso, anci macro policies of Argentina, Brazil, and Mexico. The broad answer is that a new set of policies that pro­ mote employment needs to be designed and implemented. These policies should not be limited to microeconomic variables that affect the supply of labor, but must also include different macroeconomic and mesoeconomic as­ pects that affect employment demand.
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