BY-PASSING THE RULES: THE DIALECTICS OF LABOR STANDARDS AND INFORMALIZATION IN LESS DEVELOPED COUNTRIES* By Alejandro Portes Department of Sociology Johns Hopkins University June, 1994 *Chapter written for the special volume commemorating the 75th anniversary of the founding of the International Labor Organization and the 50th anniversary of the ILO's Declaration of Philadelphia. I acknowledge the assistance of Patricia Landolt and Dag MacLeod in the preparation of this chapter. ABSTRACT Focusing on the characteristics of activities taking place outside the pale of state regulation, I address first some aspects of the relationship between labor standards, the informal economy, and national development. The analysis indicates reasons why attempts to impose advanced labor legislation in labor-surplus economies often end up by having perverse effects. Second, I explore the relationship between labor standards and the economic strategies of less developed countries as they have shifted from import substitution to export-oriented industrialization. The character and functions of the informal sector have shifted between both periods as countries have increasingly removed those labor protections that created a formal sector during the earlier ISI period. Third, I present some proposals for an alternative labor regime and compare it with the existing policy alternatives. Too often debates over labor standards are posed in terms of irreconcilable trade-offs. Different experts on international development argue that improving the quality of jobs undermines their quantity; that the collective right to national development requires the suppression of individual rights; and, that international labor standards subvert national political sovereignty (Lim 1990; Deyo 1987, 1989; Kochan and Nordlund 1988). The incompatibility of these positions is further aggravated by the relative emphasis that different authors place on economics versus politics. Opponents of labor standards tend to speak of the economic benefits of efficiently allocating resources, while ignoring the unique attributes of the "resource" labor. At the same time, proponents of labor standards often speak of the need for political bargaining and social contracts without taking into account the very real benefits that rapid growth may confer upon developing nations. Despite the controversy surrounding international labor standards, the trend toward increasing international regulation of workers' rights is undeniable. Since the mid-1980s, the United States Congress has enacted four different laws that make access to the U.S. market contingent upon respect for "internationally recognized worker rights". These are listed in Table 1. At the same time that the United States has unilaterally imposed labor standards upon countries with which it trades, it has also sought to introduce the issue of international labor rights into multilateral trade agreements. In the European Union, workers' rights were taken up in the "Community Charter of the Fundamental Rights of Workers" in 1989. Although the form of these provisions may vary widely, they are all guided by the same underlying premise: poor working conditions in one country will adversely affect the working conditions and competitiveness of others. ------------------------------------------------------ Table 1 about here ------------------------------------------------------ The notion that substandard labor conditions spill over from one country to the next is hardly new. This belief is clearly spelled out in the preamble to the ILO Constitution of 1919 which states that "the failure of any nation to adopt humane conditions of labor is an obstacle in the way of other nations which desire to improve the conditions in their own countries" (Cited in Servais, 1989: 424). And yet, until recently the evolution of the international system has belied this seemingly common sense idea. Historically, the sectoral isolation of labor in less developed countries, combined with extensive protection in developed markets prevented the plight of Third World workers from exercising any influence upon the improving labor standards in the industrialized world. Intense competition due to the increasing integration of the global economy has begun to change this situation. The phenomenal growth of the East Asian NICs and the collapse of the import substitution industrialization (ISI) model of development has transformed traditional patterns of trade. Less developed countries no longer export just raw materials while manufacturing exclusively for the domestic market behind high tariff barriers. Instead, a great many workers in the Third World now produce goods that compete directly with those formerly manufactured only in advanced economies. Data illustrating the increase in less developed country imports in the United States is presented in Table 2. In many leading-edge industries, Third World workers have productivity levels that are equal to or greater than that of their counterparts in the industrialized countries (Shaiken 1994 and 1990). As firms in the developed world begin to compete with goods produced by low-paid and easily-replaced hands, they are frequently forced either to drive down wages or exit in search of a cheaper labor force elsewhere (Sassen-Koob 1984; Walton 1985; Fernandez-Kelly and Garcia 1989). In the present phase of the international division of labor, the denial of workers' rights in the Third World may well adversely affect the working conditions and competitiveness of labor in the advanced societies. ------------------------------------------------------ Table 2 about here ------------------------------------------------------ This new economic reality in which the rapid internationalization of capital erodes the bargaining power not simply of workers, but also of national governments has elicited two opposing views. Neo- classical economists have argued that interfering with the free play of market forces through the imposition of labor standards undercuts the possibilities for Third World development since an abundant and unprotected labor supply is their only comparative advantage (Fields and Wan 1986; Lim 1990). According to this perspective, in the long run the unhindered play of market forces will stabilize into a global economic regime in which nations trade freely and fairly based on their respective comparative advantages. The reply of neo- institutionalists has been that unrestricted global competition leads to a downward spiral of wages and working conditions. In this scenario, workers, employers, and governments all lose; increased worker discontent leads to political instability in both the Third World and in advanced countries, while declining wages generate an international chain reaction of market contraction and underconsumption (Kochan and Nordlund 1988; Castells and Portes 1989). Predictably, this debate pits employers against workers within countries. Less predictably, it has also placed developed countries in the unaccustomed position of favoring regulation of the international economy while developing nations -- long champions of greater trade controls -- embrace the doctrine of laissez-faire and free market allocation. Yet, both proponents and opponents of international labor standards tend to assume that the diffusion of regulations from advanced nations to the Third World will have the effect of homogeneously upgrading and stabilizing working conditions. Indeed, many advocates sincerely believe that the implementation of legislation to facilitate trade union organizing, enforce a minimum wage, and maintain protections in the workplace will predictably lead to constraining employers' practices everywhere in the same manner. The empirical evidence tells a different story. It questions current assumptions about the consequences of enactment of "advanced" labor standards in less developed economies. Focusing on the characteristics of activities taking place outside the pale of state regulation in the Third World, I address first some aspects of the relationship between labor standards, the informal economy, and national development. Second, I explore the relationship between international labor standards and the economic strategies of Third World countries. Finally, I present some proposals for an alternative international labor regime and discuss its viability. Labor Standards in the Third World Many Third World nations already have labor legislations which, on paper at least, have little reason to envy those of the most advanced countries. Issues of job security, accident protection, unemployment insurance, old-age pensions, rights to unionization, and grievance procedures are meticulously legislated in many Third World codes. In part, these standards reflect years of working-class mobilization and struggle. However, they are also the product of ideas, values, and practices diffused from the industrialized world. This diffusion has led to a profound disjuncture in the condition of Third World workers. Imported labor standards have had significant consequences in economic and social reality, but they are generally not those that were originally intended. The fundamental weakness in the application of protective legislation in Third World nations is the existence of a large mass of surplus labor. In this context, firms face the dilemma of observing regulations, and thus being saddled with costly and inflexible labor arrangements, or trying to by-pass them. Competitive pressures generally lead firms to settle for a combination of both types of practices (Beneria 1989; Bromley 1978). In labor-surplus economies, the introduction of extensive labor regulations leads inevitably to the rise of an informal sector. Although commonly characterized as a set of "survival" strategies by the very poor, the informal sector in Third World countries is far more complex and includes as well the strategies of modern firms to cope with state-imposed constraints.. A symbiotic relationship thus emerges between the employment needs of vast sectors of the population and the need of firms to meet competitive pressures by avoiding imported and frequently unrealistic rules. The specific relationship between informal and formal production processes is determined by the scope of state regulations, the requirements of modern firms, and the characteristics of the labor force. In general, enterprises in less developed countries make use of unprotected labor through a complex set of arrangements which include direct hiring of informal subcontractors and suppliers, the use of intermediaries, and the practice of hiring "temporaries" on a casual basis (Beneria and Roldan 1987; Birbeck 1979; Davies 1979). Although well-concealed from public view and, most certainly, from the record-keeping mechanisms of the state, informal labor practices by formal firms have represented a key factor increasing their flexibility and allowing them to overcome the constraints of detailed regulations (Portes and Walton 1981). The main outcome of this process is the segmentation of the working class into a relatively high-paid and protected minority and a mass of unprotected workers occupied in manifold informal arrangements. This situation appears to some as a sign of the continued existence of a dualistic economy segmented between those "in" and those "out" of the modern sector (Tokman 1982; PREALC 1981). In reality, the underutilization of labor by the modern sector is, in many cases, more apparent than real. The recent empirical literature documents a number of instances in which the "problem" is not the absorptive capacity of modern industry but, rather, the ways in which it utilizes labor in order to by-pass existing state rules. A dense network of formal-informal productive relations is characteristic of Third World economies with extensive regulations and suggest, in turn, the futility of attempting to equalize labor market conditions in the advanced and less developed worlds on the basis of additional legislation. The Informal Economy under Import-Substitution and Export-Oriented Models of Development The consolidation of labor practices including the resistance of modern sector firms to hire highly protected workers and the existence of multiple alternative labor arrangements helps explain the Latin American anomaly that the informal sector has persisted and even thrived during periods of rapid industrial growth. Both, neo-classical and Marxist theorists have predicted the inevitable demise of "marginal" economic activities with sustained industrialization. However, evidence from the period of rapid industrial growth in Latin America from 1950 to 1980 indicates that the informal sector actually thrived in many instances in the context of dynamic industrial development. Table 3 summarizes the relevant empirical data for the seven largest Latin American countries during this period. The pattern is unmistakable. Latin American economies expanded by a weighted average of 5.5 percent and the regional gross national product (GNP) quadrupled. Manufacturing was clearly the most important element of this phase of growth registering an unweighted average annual increase of 6 percent between 1950 and 1975. ------------------------------------------------------ Table 3 about here ------------------------------------------------------ Unlike turn-of-the-century industrialization in the United States, the growth of manufacturing in Latin America was accompanied by a sustained increase in the number of urban workers excluded from formal protected employment. Industrial self-employment alone, which is assumed to disappear as modern firms drive artisanal production out of existence, remained a stable proportion of the labor force. The self-employed continued to represent approximately one-fifth of manufacturing workers with their absolute number growing by 1.8 million. According to estimates by the ILO's Regional Employment Program for Latin America and the Caribbean (PREALC), informal employment declined only four percent, from 46 to 42 percent of the economically active population of the region during this 30-year period (PREALC 1982). Other figures, based on exclusion of workers from social security coverage, put the 1980 figure at more than 50 percent of the Latin American EAP (Portes 1985). The informal economy that grew in tandem with import substitution industrialization in Latin America was not homogenous, but featured distinct types of activities. In terms of their functions, at least three types of informal "sectors" could be distinguished. First, there was an informality of "survival", most visible and best publicized, whose sole function was the physical reproduction of those involved. Invented self-employment at the margins of the urban economy such as begging, shoe shining, and casual street vending represent examples of these activities. Second, there was a vast sector of independent informal enterprises catering to the needs of the low-income urban population. These activities stretched all the way from the production and sale of foodstuffs to the repair and reconditioning of TV sets, other appliances, and even automobiles (Roberts 1976, 1989; Lanzetta, Murillo and Triana 1989). I have argued elsewhere that this sector played a central role in Latin American economies by lowering living costs for the urban working-class and facilitating access to consumption of modern items that otherwise would be outside its reach (Portes and Walton 1981). Indirect benefits in terms of lower formal sector wages and greater political stability trickled up to the owners and managers of large formal firms. Third, there was a sector of informal enterprises subordinate to formal firms through various subcontracting arrangements which helped supply the high- income market. For example, informal collectors of recyclable wastes such as paper, glass, and plastics integrated supply chains which furnished a significant proportion of raw materials to industrial concerns producing goods for the middle-class (Birkbeck 1979; Fortuna and Prates 1989). The same was true of a vast underground network of homeworkers and shantytown sweatshops producing everything from clothing to auto parts in subcontracting chains controlled by the larger firms (Beneria and Roldan 1987; Roberts 1989; Lomnitz 1977, 1988). Although best concealed from public view, this sector played a central role during the period of import-substitution industrialization. As seen above, these subcontracting chains benefited directly the large formal producers by increasing their labor flexibility and lowering their costs. The rapid shift toward a different model of development during the 1980s led to significant transformations both in the character of the informal economy and in its functions. Under strong pressure from international finance agencies, Latin American countries vied with each other to lower tariff barriers, privatize state enterprises, and encourage exports. Seeking new forms of insertion into the world market, Latin governments worked to improve productivity and efficiency in its most internationally competitive industries while liberalizing tax and labor rules to attract foreign capital. The latter set of policies had immediate consequences for the character of the domestic informal economy. Under export-oriented industrialization, all three forms of informality described above have persisted, but the third (subcontracted production) has experienced a significant change. Now homeworkers and informal sweatshops under subcontracting arrangements produce not only for the domestic market but, increasingly, for export. Recent studies document a number of instances of this remarkable "internationalization" of the Latin American informal sector. In Guatemala, for example, Perez-Sainz (1993) has described how indigenous garment producers in the villages surrounding the capital city have been transformed into contractors for various California firms which advance them raw material and capital for the acquisition of sewing machines. In one shop after another in these Cakchiquel Mayan villages, women sew shirts and blouses for the California market receiving, in return, a very low piece rate without any social security protection. Similarly, in his study of the Jamaican canned fruit export industry, Robotham (1992) traces a chain of casual subcontracting linking the larger firms with small informal packers and fruit collectors. The end result is a product competitive because of lower price, not necessarily quality in international markets. The drive toward increasing exports has led state enforcement agencies to turn a blind eye to systematic violations of existing labor codes by exporting firms (Walton 1985; Fortuna and Prates 1989). This practice may be called "piecemeal" informalization, insofar as it does not entail the blanket removal of workers' protections from the existing labor code, but a pattern of selective omissions. In countries like Chile, however, these violations are frequent enough to account for the proliferation of informal enterprises and for their employment of a large share of the urban labor force. As a recent analyst noted: . . . there are plenty of "formal" companies, operating as legal entities and paying taxes, which still operate with "informal" labor relations. They employ workers without legal contract, a widely prevailing practice in small and medium firms. This is particularly easy to do in Chile because labor legislation imposed in 1979 (and minimally modified in 1991) permits it, and the state plays a weak role in the regulation of labor markets (Diaz 1993; 13). A still more important strategy adopted by Latin American governments is the creation of Special Production Zones (SPZs) to attract foreign firms interested in the production of certain goods for export to developed markets. What is "special" about these zones in the removal of taxation and labor controls applicable to the rest of the national economy. Thus, instead of seeking greater flexibility in the piecemeal violation of existing rules, foreign firms secure it wholesale under the SPZ regime. National states "informalize" themselves vis-a-vis their own laws in their quest for even more foreign investment. The end result of this process is not a larger informal sector as under the piecemeal violation strategy, but the breakdown of the formal informal distinction. When the state ceases to protect workers and regulate key aspects of the labor contract, employment in all firms approaches the conditions previously labelled "informal" (Castells and Portes 1989). The Dominican Republic offers a good example of this situation. Through the active promotion of SPZs in the 1980s, the Dominican Republic managed to attract more than 400 assembly plants employing over 110,000 workers (Schoepfle and Perez-Lopez 1989; Itzigsohn 1993). By the early 1990s, manufacturing for export comprised 43 percent of total industrial employment, up from just 5 percent in 1974. Yet, the massive increase in export industrial production and employment was not accompanied by any significant improvement in the condition of the labor force. Instead wages declined steadily forcing the entry of other family workers, primarily women, into the labor force. As seen in Table 4, wages in the manufacturing sector declined by 50 percent between 1977 and 1991. The same decline occurred in the export-oriented sector and in public employment. Meanwhile, self employment increased by approximately 20 percent. Indeed, social security protections in formal sector industries became so weak under the new model of development that many workers preferred to remain as self-employed artisans and informal shop owners rather than seek jobs in the bourgeoining SPZ sector (Lozano 1994; Itzigsohn 1993). ------------------------------------------------------ Table 4 about here ------------------------------------------------------ Wholesale informalization under the new export regime approaches the unrestricted labor market conditions advocated by neo-classical economists and other defenders of laissez-faire trade. So far these policies have not led to a significant reduction in poverty as a consequence of increasing labor demand in any Latin American country (Diaz 1993; Castells and Laserna 1989). Instead, benefits have trickled up to corporations and governments in terms of higher profits, greater management flexibility, and a less deficit-ridden balance of payments. However, those who oppose these policies will be well advised to remember the experience of Latin American countries during the period of import substitution industrialization. Pushing for the adoption of a panoply of imported labor standards will not guarantee their observance. More likely, such measures will lead to the re-enactment of underground labor practices by employers, encourage governments to increase the practice of piecemeal informalization, and segment domestic labor markets anew. Alternative policies must be sought that take effectively into account the specific conditions of less developed labor-surplus economies. An Alternative International Labor Regime For those who assume that the pattern of wholesale informalization under the new export model of development will decisively tip the balance against labor rights, the questions is how to pursue measures sensitive to the underlying social realities. I begin this quest by noting that the dilemma between workers' rights and firms' need for flexibility is a false dichotomy. In reality, the two may co-exist through a flexible and realistic application of labor standards. The first step is to tailor workers' rights to conform more closely to the situation that prevails in less developed countries. Not all labor rights are equally important, nor do they all exert the same influence upon the labor market. Various items that are commonly included under labor standards can be broken down into four distinct categories. These are listed in Table 5. Basic rights are the least likely to create labor market rigidities and lead to the type of labor market segmentation typical of Third World economies with elaborate labor protections. Furthermore, these are the standards where an international consensus seems already to exist and which are therefore most amenable to international monitoring. Agreement on civic rights is less broad, yet the standards listed under this category have come to be accepted as consensual by democratic nations. In addition, the extension of civic rights can encourage the political bargaining and social pacts that many observers believe are a necessary precondition for successful national development. The middle two categories -- survival and security rights -- depend upon local conditions and do not lend themselves readily to fixed international standards. These rights are best left to bargaining between workers, employers and governments, once basic and civic rights have been fully implemented. ------------------------------------------------------ Table 5 about here ------------------------------------------------------ With the exception of the provision on minimum standards for wages and occupational health and safety, the categories of basic and civil rights are identical to the ILO's five fundamental workers' rights listed in Table 6. Even the exceptional category, (item 5 in Table 6) contains a clear elemented of flexibility signified by the word "acceptable". Levels of remuneration, work hours, and occupational safety can obviously not be the same everywhere. Tailoring them to local conditions again points to the need for bargaining between employers, workers, and governments supported by the observance of civic rights (item IV in table 5 and items 1 and 2 in table 6). ------------------------------------------------------ Table 6 about here ------------------------------------------------------ To their credit, lawmakers in the United States have used the ILO's fundamental workers' rights as the criteria for trade preferences granted to less developed countries. However, the international application of these standards remains flawed in a number of ways. Determinations over labor conditions in less developed nations is highly politicized and often unconnected to the actual level of workers' protection in a given country. More importantly, the unit that is judged to be in violation or compliance with particular labor standards remains the national state when, frequently, violations take place at the level of the firm. Raising worker rights to the level of the World Trade Organization (the designated successor of the GATT) could be an important step toward addressing these problems. Under the social dumping clause of the GATT, judgement over working conditions would be settled by WTO dispute mechanisms, reducing some of the arbitrariness of these decisions. A key step forward would be the application of labor standards to companies rather than countries, which would reduce the incentive for Third World governments to attract foreign investment through the piecemeal non-observance of basic labor rights. Removing these rights from competition between nations by applying them universally across industries could also tone down the current volume of the debate between less developed and industrialized nations. The primary focus of international regulation should be on those labor standards for which a moral global consensus already exists and on sanctions targeted on the direct violators, in particular companies whose assets and operations in the First World could be put in jeopardy by their unscrupulous Third World practices. In addition to these measures, there is a second set of policies which can strengthen the position of labor in Third World countries and hence serve as a bulwark against the "downward spiral" anticipated by critics of the current model of development. Ironically, these policies involve a most capitalistic goal, namely the promotion of independent small enterprises. Spearheaded by the writings of Piore and Sabel (1984), the concept of flexible specialization has gained considerable attention in the literature on industrial development. These authors have drawn on the experience of Emilia Romagna in central Italy and other "industrial districts" to highlight the potential for growth of small, technologically advanced firms linked through flexible networks (Capecchi 1989; Sabel 1982). The development of high-tech small enterprises has three positive consequences for the strengthening of labor standards. First, it can alleviate the downward pressure on wages and work conditions as the viability of small firms ceases to depend upon the vulnerability of labor; second, workers in new firms benefit from apprenticeship opportunities and training; third, the development of communities of small producers gives workers in larger formal industries the chance to shift into this sector, strengthening their hand vis-a-vis managerial power. The development of a dynamic small- scale sector can thus represent an efficient means to promote labor standards by giving workers the opportunity to make independent use of their energies and ingenuity. At first glance, this argument would seem to reinforce the position of laissez-faire advocates such as Peruvian economist Hernando de Soto (1989) concerning the advantages of removing state intervention from the economy in order to "free" popular entrepreneurial energies. In fact, the proposal runs exactly in the opposite direction because the emergence of a dynamic small-scale sector depends on direct state support The growth of a small business sector out of the informal sector is by no means automatic for the obvious reason that, except in rare circumstances entrepreneurs lack the capital, technological know-how, and organizational resources to implement anything beyond sweatshop or homework production (Capecchi 1989). The experience of central Italy and all other industrial districts in the literature indicate that it is not the absence of state intervention, but its sustained presence that has been necessary to lead experiments of "flexible specialization" to success. State assistance need not come from central governments, but can be more effectively provided by local agencies. It involves, at a minimum, training assistance, flexible access to credit, transportation facilities, and support of cooperative efforts (Benton 1989; Brusco 1982). Combined with the judicious implementation of a package of internationally monitored labor rights, an innovative sets of policies in support of dynamic small enterprise can go a long way toward strengthening the rights of workers, avoid the segmentation of the labor market, and transform today's informal economies of survival in the Third World into vehicles for sustained development. Table 1 WORKER RIGHTS PROVISIONS IN U.S. TRADE LAW �컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴퀼 1) Generalized System of Preferences A 1984 Amendment to the GSP made receipt of preferential trade status contingent upon whether or not the developing country has taken or is "taking steps to afford internationally recognized worker rights to workers in the country." 2) Caribbean Basin Initiative The original legislation of 1983 contained a minor reference to labor rights. A 1990 amendment raised worker protections to the same level as the GSP placing them under the mandatory conditions with which recipient countries must comply. 3) Overseas Private Investment Corporation A 1985 Amendment to OPIC prohibited the financing or insuring of any country that is not "taking steps to adopt and to implement laws that extend internationally recognized worker rights." 4) Section 301 of the Trade Act of 1974 Amended by the Omnibus Trade and Competitiveness Act of 1988 in which the definition of an "unreasonable" act, policy or practice was expanded to include "a persistent pattern of conduct" that violated basic worker rights. Source: Lawyers Committee for Human Rights (1991). Table 2 Increase in U.S. Manufactured Imports by Country and Region of Origin 1980-1988 �컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴 Place of Origin Percent Increase 1980-1988 Total World 170 Developed World: 143 Japan 184 EEC 134 Developing World: 240 Mexico 296 Brazil 338 Hong Kong 116 Korea 386 Singapore 342 Taiwan 262 China 915 Asian NICs 259 �컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴퀼 Source: Mead (1990: Table 3). Table 3 Latin America: Segmentation of the Economically Active Population (EAP), 1950-80 Country Year GNP* Informal Workers, Percent of Urban EAP* Informal Workers, Percent of Total EAP* Self- employed, Percent of Total EAP** Argentina 1950 1980 12.9 31.3 21.1 23.0 22.8 25.7 7.8 16.7 Brazil 1950 1980 10.0 59.2 27.3 27.2 48.3 44.5 28.6 33.7 Chile 1950 1980 3.4 7.7 35.1 27.1 31.0 28.9 22.4 18.6 Colombia 1950 1980 2.5 9.5 39.0 34.4 48.3 41.0 23.4 18.9 Mexico 1950 1980 10.0 44.2 37.4 35.8 56.9 40.4 37.4 23.2 Peru 1950 1980 2.2 8.3 46.9 40.5 56.3 55.8 ... 40.2 Venezuela 1950 1980 2.4 8.3 32.1 20.8 38.9 31.5 28.8 31.8 Latin America 1950 1980 51.8 190.9 30.8 30.3 46.5 42.2 27.3 28.3 _______________________________________________________ _______________________ * Gross national product in billions of 1970 dollars. * The sum of unpaid family workers, domestic servants, and the self-employed minus professionals and technicians. ** When unavailable, 1970 figures have been substituted for those from 1980. _______________________________________________________ _______________________ Sources: PREALC 1982; Wilkie and Perkal 1985. Table 4 Evolution of the Urban Labor Market in the Dominican Republic, 1977-1991 1977 1979 1981 1983 1985 1987 1989 1991 Labor Force Participationa,, % 33 33.3 34.5 35.3 35.0 39.1 40.0 41.9 Urban EAPb, % 56 58.8 59.2 60.7 63.8 64.6 65.0 64.2 Manufacturing Wagesc 149 142 129.4 128.4 92.1 99.1 87.6 75.6e Export Zone Wagesc 161 155 123.2 159 74.0 80.8 88.5 84.8e Public Sector Wagesc 57 83.7 85.1 74 72.3 68.0 54.1 41.7e Self-employmentd, % 20 16.2 18.5 17.6 --- --- --- 25.2 Unremunerated Family Workersd, % 1.8 1.6 2.4 2.2 --- --- --- --- Open Unemploymentd, % 14 18.6 20.7 21.7 25.7 25.6 25.6 26.8 a. National figures as a percentage of the total population. b. Urban economically active population as a percentage of the national EAP. c. In constant Dominican pesos of 1977. d. In the capital city. e. To August 1991. Source: Portes, Itzigsohn and Dore-Cabral (1994: Table 7) based on Dominican Census figures. TABLE 5 Types of Labor Standards __________________________________________________________________ ___________ Type Examples I. Basic Rights Right against use of child labor. Right against involuntary servitude. Right against physical coercion. II. Survival Rights Right to a living wage. Right to accident compensation. Right to a limited work week. III. Security Rights Right against arbitrary dismissal. Right to retirement compensation. Right to survivors' compensation. IV. Civic Rights Right to free association Right to collective representation Right to free expression of grievances Source: Portes (1990: Table 10-2). TABLE 6 ILO FUNDAMENTAL WORKER RIGHTS INCORPORATED INTO U.S. TRADE LAW �컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� 1. The right to associate with other persons, ILO Convention No. 87, Freedom of Association and Protection of the Right to Organize Convention (1948); 2. The right to organize and to bargain collectively, ILO Convention No. 98, Right to Organize and Collective Bargaining Convention (1949); 3. The right to avoid forced or compulsory labor, ILO Convention No.105, Abolition of Forced Labor Convention (1957); 4. The right for children to avoid industrial employment, ILO Convention No. 138, Minimum Age Convention (1973); 5. The right to acceptable conditions of work with respect to minimum wages, work hours, and occupational safety and health, ILO Convention No. 1, Hours of Work (Industry) Convention (1919), ILO Convention No. 131, Minimum Wage Fixing Convention (1970), ILO Convention No. 155, Occupational Safety and Health Convention (1981). Source: Lawyers Committee for Human Rights (1991: 78, 79) References Bener죂, L. 1989. "Subcontracting and Employment Dynamics in Mexico City." Pp. 173-188 in The Informal Economy: Studies in Advanced and Less Developed Countries, edited by A. Portes, M. Castells, and L.A. Benton. 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