Labour Reforms in Brazil and Chile (a Comparative Study)

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UNIVERSITY OF IBADAN
DEPARTMENT OF SOCIOLOGY

COURSE
COMPARATIVE INDUSTRIAL RELATIONS (MIR 709)

TOPIC
LABOUR REFORMS IN BRAZIL AND CHILE
(A COMPARATIVE STUDY)

A PAPER SUBMITTED TO THE DEPT OF SOCIOLOGY
BY
GROUP 4

Adepoju Janet Oluwatosin167455
Ayangbemi Olusola Temitope166905
Dagunduro Adebukola Olufunke167457
Ogunsemoyin Olubusayo B.81014

LECTURER IN CHARGE: PROF. ONYEONORU P.I.

OCTOBER, 2012
INTRODUCTION
Labour laws is defined as the balance of power among government, employers, workers, and unions. The redrafting of a country’s labour laws typically reflects a shift in the power relations and may carry unfavourable consequences for a former beneficiaries. As the Colliers put it, “Labour law is a highly visible and concrete policy statement around which political battles are fought, won, and lost, and around which political support is attracted, granted, and withheld… labour law thus provides a valuable point of reference for analyzing the larger political context” (Collier and Collier 1979, 971). The reform of national labour laws is one of the most widely implemented recent policy changes in the world. Since the early 1990s, Brazil as well as Chile have changed their labour laws. Labour reforms have also provoked massive protests, including general strikes. It can be understood that the changes in labour law occurring on a global scale are themselves a response to the pressure of globalization. In most nations of the world, labour legislation was originally made to reflect government-employer-worker relationships embedded in protected national economies. But in recent years, trade liberalization and greater global competitiveness have created new challenges for employers and workers. Pressures for legal and institutional change have naturally followed. This study is all about comparative insights into labour reform processes at the end of the twentieth century of two Latin American countries, Brazil and Chile. Despite similar initial prescriptions for change in the direction of greater flexibility, the outcomes of labour reforms differed in the two countries. In the 1990s, moderate flexibility reforms were implemented in Brazil while in Chile, changes in labour law was extensive.

THE LATIN AMERICAN CONTEXT
The region followed a common import substituting industrialization (ISI) model in the post-war period. This development strategy reshaped the Latin American economies, societies and institutions. While traditional interest groups linked to the primary sectors reduced their political influence, new social groups with interests in the local industries gained social and political strength. After some time, this inward-oriented development strategy began to show clear signs of exhaustion. The performance of Latin American countries was not good enough compared with the South-East Asian countries that claimed to adopt an almost opposite economic model. The political support of the ISI model was gradually eroding in Latin America when the debt crisis unleashed in 1982 and the failure of early policies implemented by some countries to deal with it played an important role in reshaping policy views in the region. Latin America of course is not homogeneous, but there are some structural characteristics common to most countries in the region that had a bearing on the reform process. The region’s competitive advantages are biased in favour of natural resources, and primary commodities explain a large share of exports: minerals and oil in Chile, Venezuela and Perú, agriculture in Argentina, Paraguay, and Uruguay; even in more industrialized Brazil and Mexico primary products are still relevant. This feature impinges on the region’s political economy via the so-called natural resource “curse”. The distribution of income and assets in Latin America is highly unequal compared to other regions in the world. As the 2006 World Development Report of the World Bank suggests, income...
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