02 May 2007

Labour Day

Yesterday (May 1st) was Labour Day in most of the world, except the United States, where commemorating the murder of workers demanding better working conditions is still deemed a bit too Communist, and May 1st seems to be turning into Immigration Day or something.

Here in Argentina, salaries and job quality have jumped to the front of social debate as of late, now that most companies are making tons of money (that's not ironic; they actually are — and they're lying if you hear them claim otherwise), so May 1st is not that different from the rest of the days, except ongoing strikes and demonstrations are suspended so that everybody can relax and resume protesting on May 2nd.

Since the beginning of the impressive macroeconomic recovery, unions and other labour organizations have begun reclaiming the territory lost during the nefarious Neoliberal Era (1989–2001), through negotiation or shows of strength, trying to look good to their constituencies..., no matter that they all sold out to the government when the labour market was deregulated and the hard-won laws protecting workers from virtual slavery were "flexibilized" to please Big Business. The same fat mafia leaders who never protested the right-wing Peronist Carlos Menem's destruction of Perón's legacy of workers' rights are now happily staging impressive, but orderly and quickly subdued protests against their employers with the assent of the left-wing/corporatist Peronist Néstor Kirchner, after which everybody gets together behind closed doors, and moderate pay rises are negotiated.

Other, smaller unions are more combative; they're less capable of creating national disruption (such as paralyzing food transport and supply) but they're also not so easily controlled, since their leaders are not up for sale and they don't adhere to the same partisan codes as the current administration. Of these unions the government demands "caution", and the conservative media depict as irresponsible, troublesome and a danger to the economy. Even worse, they're lumped together with piqueteros and, like them, accused of extorting society to get money (for a sizable proportion of Argentinians, "society" and "the people" include only from the middle class up).

In this view, the problem with blue-collar workers getting a good paycheck is that they may feel encouraged to stand up, demand further rights, and even (God forbid) get to consider themselves as equal to "the people". One immediate effect, according to certain economists (who do know better), is that more money in the hands of the unwashed masses means inflation, as of course these poor ignoramuses cannot understand that they need to save and invest for the good of the country, like responsible citizens. The idea that workers should have money to buy the products they manufacture, pioneered by Henry Ford, seems to have lost its attraction for modern capitalists; and the economists they buy to convey their opinions have made a custom of repeating the lie that higher salaries cause inflation. Higher salaries only redistribute the money — less net profit for the employer, more for the employee. This will also redistribute consumption and may cause temporary price raises in certain goods, which should adjust automatically by increasing offer. This would make sense if only the producers of said goods were real capitalists, willing to take risks and invest to take advantage of a higher demand; but most Argentine businessmen are extremely ignorant, greedy, and shortsighted — they'll cash in extraordinary profits, milking the over-demanded market dry, and then cry over it.


  1. It seems like a bad joke that on this labour day I was forwarded an email penned by a U.S. trained lawyer (and a mother herself) who advised fellow expat ladies they can get away with not paying their maids for maternity as that there is a set of laws for regular en blanco female employees who are entitled to maternity leave payment and another set of laws for maids who, even if working en blanco, are not entitled to such benefits. (I blogged about it in further details).

    When this lady was asked to cite this piece of Dickensian law the flow of emails suddenly dried up...Pablo, would you know if that's really the case? (my personally opinion is that the law may be not be humane but one certainly can rise above that and do the decent thing...)

    The real cupcake

  2. Curiously enough, this real labor day, as opposed to the one that is observed in the States in September, has its roots in Chicago. Most likely it´s because it is a very ugly story, showing just how ruthless the local government and police were towards the labor movement and towards the left leaning political movements of the time that it is not observed in the States.

    It was definately not the United States at its finest.

    One thing that I had to adjust to in living and working here in Argentina was that position that everyone takes here regarding workers and employers. It is very much an "us against them" position. I am sure it has a lot to do with companies trying to get away with as much as they can but you also have the unions trying to do the same thing. This is obvious if you happen to have a company in which you want to take care of your employees but politics get in the way. I have to be very carefull about pay raises here becuase instead of me controling the raises (that I want to give) I have outside forces that dictate that for me so that´s out of my hands. That is just one example.

    It is also familiar to see that stand taken up by the employees, until they get to know us and how we work.

    One other thing that makes it very difficult to have a business here these days is that there is so much inflation and we are starting to see breaks in the supply chain of certain products. I know you were refering to big business in your blog but I just wanted to chime in on what it was like for a small business.

    I have a big order for cookies to deliver on Monday and I am going to be one pallet short on delivery day because I can not find Chocolate chips to get to me on time. They have to make them. Never mind that I made the order a long time ago. This is your point in action I would imagine. I, on the other hand, have invested in machinery, facility, personnel, etc. setting my sights on growing. Now I have supply problems to add to the complexities of operating under inflation.

    Now that I am selling to bigger clients they also take their time in changing their prices. They basically ask me to take a hit. I am now going to start the price changes right away for them.

    Maybe we are a bit too naive at this point and eventually my learning curve will get me to where I could be more confortable with these price negotiations. It is not very easy to face Goliath when you are even smaller than David.

    At least our employees are very happy with us.

  3. Pablo -
    Do you know what percentage of the argentine workforce is unionized? In the US it's something like only 12.5%, and support for unions is at a 25-year low. That also accounts for the September-celebrated Labor Day as being just another federal holiday.

    Almost all jobs in the US that require a college degree are non-union, and in some states (such as California), non-union employees work "at will" - meaning they can be terminated at any time.

    One of the reason that high-tech companies in the US prosper is that they most often have an employee stock program - if the company does well, you benefit from an increase in the stock price. If you work for a publicly-traded company, everybody is an employee, so there is less of the them vs. us mentality.


  4. Hi Pablo.

    I've been enjoying going through your blog and like your writing and style. I wanted to let you know that in the US May 1 is Loyalty Day, if you can believe that. Bush reminded us all with a proclamation this year. I'd never heard about it until I saw this press release on some news aggregator site.



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