Labour, restructuring of production, and development: a point of view from Latin America

Changes in the field of labour have sharply affected both industrial and non-industrial societies around the world. Restructuring of production, especially since the 1970s, has introduced technological innovations and other ways of managing the labour force, accompanied by a logic of accumulation which emphasizes competitiveness and quality. This restructuring, which many see as an inevitable part of the market logic, has caused serious problems for maintaining employment levels and guaranteeing social and labour rights won over the course of this century. While unemployment rates have risen even in developed countries, many nations of the world are applying a policy that dismantles state action in social areas. In underdeveloped countries, making labour relations "flexible" only tends to foster the informal labour market and unemployment.

Innovative technological and management strategies derived from the so-called "Japanese model" (although even in Japan itself they exist in only a few large companies) have been lauded as the solution to all the ills resulting from lack of competitiveness and difficulties in controlling the labour force. In Brazil and other parts of Latin America, new management forms are proclaimed as the only path to the modernizing of industrial production; and workers are obliged to accept this in order to keep up with the times.

This article considers issues of labour and economic development in the Brazilian and Latin American context, relating this to the debate on sustainable development. After discussing the effects of recent restructuring of production -- linked with the application of a neo-liberal recipe virtually all over the continent -- on existing forms of labour, employment, the rate of poverty and social exclusion, and workers' organizations, trade unions and social movements, I shall suggest several points regarding participation by labour and workers in a development process that preserves natural resources, better distributes income, eradicates destitution and maintains democratic forms of political organization.

Labour and industrial restructuring

Brazil and Latin America as a whole should be viewed in light of new models of production linked to the capitalist accumulation crisis of the 1970s. In order to be able to respond to changes in the market, the model based on mass production of standardized goods has given way to what has been called "flexible specialization": the production of heterogeneous goods on machines operated by specialized workers.(1) But while the integration of Brazil and other Latin American countries into the international market speeds up industrial restructuring, specific characteristics of regional, national and local society and culture present obstacles to strategies borrowed from elsewhere. Case studies in Brazil show wide variations between sectors and even between companies in a given industry. International competition triggers modernization through export companies, but this does not reach the entire industrial park. Modernization results from isolated actions, partly because of the government's lack of an industrial policy, partly because of company verticalization.

This has not prevented the gradual implementation, according to the neo-liberal recipe, of new entrepreneurial strategies whenever greater international competitiveness is required, putting the survival of domestic companies at risk. Out-sourcing has become widespread in Brazil. So-called "third-party" firms perform tasks that used to be carried out by the principal companies in the name of productivity and competitiveness. In an unskilled labour market with much available labour, such cost savings have a devastating effect on the job supply and those who depend on it for their survival. While studies on the use of out-sourcing have proposed partnerships throughout the entire production flow -- in relation to the market, suppliers and employees -- what prevails in Brazil is a kind of out-sourcing that is antagonistic to both employees and the trade union movement. The objective is short-term profits, with cost-cutting achieved by cutting labour.(2)

Linked to this is the issue of subcontracting. While there is a form of subcontracting in which a company transfers technological and production management innovations to a subcontracted firm, there is also a phenomenon which has been described as "contingency subcontracting", in which the company transfers the costs of energy, equipment, and space to the workers. In effect, it acquires a labour force without the burden of labour legislation. This sets up a dependency that makes subcontracted labour an ambiguous occupation, "combining certain characteristics of a wage-earning relationship -- like the imposition of what and how much a worker is supposed to produce -- with others typical of self-employed labour, like price negotiation, labour performed outside the contractor's direct control, choice of production location and free distribution of time in manufacturing products".(3)