Poverty Decreases but Insatisfaction Grows

Pablo Benvenuto; Anabel Cruz; Alma Espino
Instituto del Tercer Mundo (ITeM); Instituto de Economía, Facultad de Ciencias Económicas, Universidad de la República; ICD; CIEDUR

Uruguay, a small, highly urbanized country in South America, located between Argentina and Brazil, with only 3 million inhabitants, ranks high in UNDP’s Human Development Index and registered a substantial reduction in the major poverty indicators in the last decade. Yet, opinion polls show a high degree of disatisfaction among the population, and anxiety about the future.

Some analysts attempt to explain this pesimistic mood with sociological references to the aging of the population (a result of increasing life expectancy and reduced natality rates). The high living standard (for the region) is undoubtely a result of decades of "social investment" during the first half of this century: progressive social policies (universal education was introduced in the late 19th century), income redistribution and a well organized civil society (one fifth of the population are members of some kind of cooperatives).

Uruguayan economy, once prosperous, reached its peak in the mid–1950s. The last 40 years have been characterized by a sluggish economy, with some exceptional periods of economic growth. Historically this process led to social struggles in the sixties and a military dictatorship from 1973 to 1984.

The democratic governments since then have followed World Bank led structural adjustment policies that contributed to the rise in unemployment and informal employment and the reduction of real wages. The economy was opened to foreign investment and international trade. The liberalization of markets, has given rise to an increase in imports competing with national production, the restructuring of the production process, and changes in the job market.

But structural adjustment could never be implemented as orginally intended, since three of the key measures were repealed by the citizens in universal referendums, two of them against the proposed reforms of the retirement system and one that repealed the law that provided for the privatization of the state owned banks, telecommunications, power and oil corporations that provide the backbone of the economy.

This rather unprecedented (in Uruguay and in the region) blockade of structural adjustment implementation through citizen initiatives is blamed by the defenders of further deregulation as the obstacle to faster economic growth, while others argue this is the reason for the local HDI to remain high.

In any case, during the last decade the pace of economic and social transformation has accelerated: State intervention has been reduced, production processes and the job market have been restructured, the economy has become more open, and the country is seeking a new international position by joining Mercosur (the trade block formed by Argentina, Brazil, Paraguay and Uruguay) (Table 1).

Public spending as a percentage of GDP has fallen, as a result of the restrictive fiscal policies of the structural adjustment and price stabilization plans. Public spending in the social area –education, health, nutrition, and so on– as a percentage of GDP fell from 5.8 percent in 1990 to 5 percent in 1992 (Table 2).

Poverty is Decreasing

According to the uruguayan government, "structural poverty" has been stable in the last two years and was reduced by 40% in the last decade. A study by the Program to Strenghten the Social Area (FAS), published in december 1995 says that the Index of Unsatisfied Basic Needs (NBI) dropped in the capital from 10,4% in 1984 to 6% en 1994 and in the rest of the cities from 22,5% to 13,1% in the same period.

Inspite of this improvement in socioeconomic conditions, since 1984 (the end of the military regime) the country has only been able to recoup positions it had achieved in the 1970s. Opinion polls reveal that there is a high degree of dissatisfaction among the general public. This could be because, based on a common history, Uruguayans assume a certain level of well–being; the instability of the job market and the social and economic transformations –state reform, social security reform, etc.–resulting from neoliberalism and globalization, are creating a growing anxiety in the general population.

The Poor are Children and Women

Poverty studies show an unfavorable situation for rural residents and children under 15 years of age. In 1992, 6.6 percent of Montevideo households and 12.3 percent of urban households in the country’s interior were below the poverty line. Households in the poorest 20 percent of the economy have the largest number of children, with more than 40 percent of children under 14 years of age. In 1989, in Montevideo, 9 percent of the total population, but 24 percent of children under 14, were living in the poorest households; in the rest of the country, children constitute one–third of the poorest sector.

In the rural sector, 43.6 percent of the total population lives in poverty; this includes households of small producers and rural employees. This phenomenon [of growing rural impoverishment] is associated with the modernization and growing complexity of production processes, the marginalization of small–scale production, the consequences of the economic model applied, and the weakening of rural areas due to emigration.

Single–parent households headed by women are an important part of the picture; poor households have an overrepresentation of preschool and school–age children. Poverty is largely linked to the job situation: approximate 50 percent of the economically active population (EAP) is unemployed or underemployed, working in the informal sector, in microenterprises, or at precarious jobs with insufficient institutional coverage.

Unemployment rates according to household income level reveal that official unemployment affects labor more intensely in the poorest strata.

Access to drinking water and sewage services remains at a good level; this makes a significant contribution to preventive health. But in the area of health care, for example, we find that there is a serious gap in coverage. In 1992, 6 percent of Montevideans and 7.5 percent of persons in the rest of the country lacked health coverage, an increase over 1989.

As for education, studies performed by the Economic Commission for Latin America and the Caribbean (ECLAC) underscored serious learning deficiencies in children, as well as significant differences in advantage gained from education depending on the socioeconomic stratum to which they belong.

The Job Market Situation

Work Force

The Economically Actve Population is growing faster than the overall population, due to the increase in the activity rate of women, while that of men has remained practically unchanged.

Uruguayan women have the highest labor participation rates in Latin America, and it is estimated that over 40 percent of the EAP is made up of women and that 44 percent of women of working age actually do work.

More than half of the employed women work in community, social, and personal services. Only 20 percent of them work in manufacturing.

Among the total male population there has been a drop in the percentage of men employed in manufacturing industries. However, among employed women that percentage has not changed (presumably because of employment in crafts work and microenterprises). Since the urban unemployment rate is not changing dramatically, this indicates that employment restructuring is taking place through displacement of workers from one sector to another.

For the last 10 years there has been no available information on the rural work force, since surveys have covered urban households exclusively. Population censuses from 1975 to 1985 report a major loss of rural population, coinciding with the deteriorating rural conditions and loss of agricultural jobs. The census programmed for 1995 has been postponed because of budget cuts.

Unemployment

Unemployment rates, which have remained at high levels both in Montevideo and in the interior of the country, are higher among manufacturing workers and in general affect wmen more than men, although in recent years such differences have tended to decrease slightly.

Job Quality

Women have access to lower–quality jobs than men. A recent study undertaken by the National Statistics Institute (INE) shows that the majority of working women (56 percent) lack social protection (domestic service, microenterprises, self–employed, nonremunerated family work). In turn, the majority of men (57.5 percent) work in "typical" jobs with social security benefits.

Salary Discrimination

Both employment segregation and wage discrimination contribute to the income disparity between men and women. A comparison of the primary income deriving from work for all areas of activity, shows that in 1994, on average, women’s income was less than 60 percent of men’s income. This inequality is more marked in the private sector than in the public sector and has a greater effect on women professionals, technical specialists, and managerial personnel and, at the lower end, women in personal services.

Among office workers, women’s earning are somewhat better than average; they earn 68 percent of men’s wages. In other occupations, women’s wages do not reach half the average salary of men.

Double Workday

While women’s work has become generalized, women have not stopped doing the jobs linked to their traditional roles; this implies more working hours at home. The double workday causes tension and conflict within families and problems for women’s health.

Child–care services are not widely available to the public; existing private services are not well regulated; and in general child care is still viewed as the private responsibility of the family (i.e., the women).

Labor Legislation and Social Security

Uruguay Law 16.045 upholds "equal opportunities and equal treatment for both sexes in labor matters". The law broadly prohibits discrimination in access to work and conditions of employment (evaluation of performance, promotion, stability, social benefits, suspension and dismissal, vocational training, and remuneration). This law applies to all men and women in public or private activities, during the labor relationship, as a job candidate, or upon job termination. It similarly provides a special judicial procedure for claims in relation to violations of its provisions and establishes administrative penalties. The incorporation of ILO conventions 100, 111, and 156 into national law has permitted better interpretation and integration of Law 16.045. Nevertheless, no violation of this law has ever been punished and Sunday newspaper keep publishing separate "jobs for men" and "jobs for women" sections.

Various bills have since been presented geared to enabling women to effectively exercise their right to work, including legislation broadening the rights of wage–earner mothers; extending general guarantees to domestic service workers; and establishing the right to retirement benefits and on–the–job accident protection for homemakers. Several bills have also been presented with a view to reducing the double workload of women: establishing child–care centers in private industrial and commercial companies and installing washing machines and related services at workplaces and in housing complexes.

No proposals have been made for "positive or affirmative action programs" to promote concrete actions in the employment area on personnel policy, management methods, organization structure, and division of jobs based on sex.

Social security reform is a very sensitive issue, among other reasons because the Uruguayan system (which in 1990 accounted for 50 percent of central government spending) corresponds to a country with a progressively aged age structure. It has been suggested that the age at which women can access retirement benefits should be increased in light of Law 10,783, the Law on Civil Rights of Women. This argument of "equal civil rights" ignores the inequities between men and women in the job market, women’s unequal access to the social security system, as well as the unremunerated work of women in maintaining households.

Marginalization, Power Relationship, and Social Integration

Despite the reduction of poverty, according to studies by the Social Area Strengthening Program (FAS), there has been an increase in the marginalization of some sectors of society. This marginalization is linked not only to labor conditions but also to new forms of organization of daily living, urban spaces, etc. For example, the media displays new consumer goods and lifestyle as being "within easy grasp". This has created a constant tension in vast sectors of society between these newly elicited expectations and desires and the reality of their unattainability.

The phenomena of marginalization and social disintegration are among the most significant concerns today. Social integration implies the existence of a time and space common to a set of individuals or groups. The less a society is able to produce a shared sense of time and place in its members and the more it reduces the possibilities for the majority to influence power, the more disintegrated it will be.

In the traditional development model of industrialization, integration was provided by uniformity, as manifested both in the mode of development and in the forms of production. The crisis in the system at the international level, the new development model, are contemporary with trends that are somewhat opposing: integration at the supraregional level, globalization of technology and finance, and serious problems of disintegration at the level of nations. In this context, work has ceased to be the social integrator that it had been in the earlier model.

During the first half of the century, education played a fundamental role in social integration; the educational system was the lever for social mobility and dissemination of a system of values. Citizenship was exercised though long–standing civil rights. Uruguay had mechanisms for satisfying social demands and incorporated diverse social sectors in the elaboration of a "sense", achieving significant levels of integration. The high value given to education by the public in Uruguay became evident in the 1994 elections, when it became a central campaign issue. A referendum proposed by the teacher unions was held simultaneously with the elections that would have introduced a constitutional provision forcing government to spend 19% of the budget in education. The proposal was defeated, but all political parties had platforms promising major increases in education spending.

The Challenges

Labour minister Analía Piñeirúa Uruguay’s official representative at Copenhagen recalled, upon signing the commitments emanating from the Social Summit, that one of the founding goals of the United Nations had been to promote social progress and raise standards of living within the broadest concept of freedom. She concluded by saying: "This Summit marks the beginning of the achievement of that objective. Uruguay declares that it will not mince efforts in complying with the possibilities it has to offer".

One year after the Copenhagen and Beijing commitments, though, the national follow–up mechanisms are inexisting or non–functioning and a spokeperson for the Planning Minister has publicly announced that "there is no need for a national anti–poverty plan, since adjustment is in fact that plan".

Bibliography

AGUIRRE, Rosario. Transformaciones recientes del empleo femenino en el Uruguay. Serie Seminarios y Talleres No. 88. CIEDUR, Montevideo, 1995.

ECLAC. "Panorama social de América Latina", Chile, 1994.