In an update on Argentina’s union politics and state-union relations, this month Argentine unions have moved to ignore a government sponsored 20%, two-year wage hike proposal as they enter into salary negotiations whose purpose is to establish labor group wage increases that offset Argentine inflation.
President Kirchner has promised to extend economic growth by encouraging consumer spending while at the same time avoiding salaries that may lead to higher prices, and has established a 20% wage increase level to counter what Argentina’s government claims was 10% full year inflation for 2007.
But disputes between Argentina’s government and many unions have arisen as a dozen union groups, representing 70% of Argentina’s workers, are pushing for a larger, 30% one year wage increase in response to what they, and many independent analysts, view as the Argentine government’s downward manipulation of its monthly consumer price index reports and underreporting of inflation. These groups claim that Argentina’s inflation is really at around 20%, not 10%.
This has led many experts to predict tough three way negations between the government, employers, and unions in the upcoming months. The outcome of these negotiations, and the size of the wage increases that Argentina’s unions are able to extract, will be telling signals as to how much the state-union relationship has evolved since the 1990’s when President Menem revised the state-union corporatist relationship through economic reform.
Categories: Argentina Update
In the Crisp reading, Venezuelan interest groups are more than just pressure groups, but rather, have formal access to policy making. Similar to Venezuela, Mexico is a state dominated by union power. In 2006, about 85% of Mexico’s organized workers were union members. During the PRI era, a network of unions headed by PRI loyalists promised to deliver votes in exchange for relatively good benefits. Even with President Fox’s arrival in 2000 that ended 71 years of PRI dominance, unions have been able to make increasing demands. During his term, Fox largely gave into union concessions. Stories of violent strikes among teachers unions in Oaxaca burning buses and steel plant workers battling with police are not uncommon in Mexico.
The transition to democracy has been difficult for many unions preferring the status quo. Most unions will not disclose financial information and will not allow secret ballot elections. Even resistance from individual union members is highly discouraged. This has supported the rich lifestyles of powerful union bosses.
The unions are only becoming more powerful now than ever and can be a strong threat to President Calderón’s agenda. Since he received support from some official labor unions during his campaign, it would be risky for him to challenge them. As well, independent unions have shown hostility to the PRD in the past.
It will be interesting to see how Calderón approach the unions during his term. He will have to deal with the strong teacher’s union for example. The Oaxaca teacher’s union is known for going on strike every spring since 1981 and has always gone away with an additional raise. In addition, oil workers at Pemex received an average of 10% pay increase for six years during Fox’s term, which were about double the rate of inflation. While Fox have mainly played a passive role with the unions, Calderón may have to take a stronger approach if he is to implement significant changes to the current system. Only time will tell.
For more information:
http://online.wsj.com/article/SB115993075786482136.html?mod=googlenews_wsj
Categories: Mexico Update
