Inter-American Council for Integral Development
TECHNICAL PREPARATORY MEETING OF THE
XII INTER-AMERICAN CONFERENCE OF
MINISTERS OF LABOR
July 12-13, 2001
Miami, Florida, USA
OAS/Ser.K/XII.12.1
TRABAJO/RTP/INF.12/01
12 July 2001
Original: English
INFORMATIVE DOCUMENT
ECLAC STATEMENT ON THE LABOUR AND SOCIAL
DIMENSIONS OF GLOBALIZATION

- 2 -

ECLAC STATEMENT ON THE LABOUR
AND SOCIAL DIMENSIONS OF GLOBALIZATION
(Miami, 12 July 2001)
Assessing the labour and social dimensions of globalization in the Americas is of the utmost importance. Governments, social actors and international organizations working in the region require a more thorough evaluation of these dimensions so that they can devise or propose policies to enhance the benefits derived from globalization and counter its unwanted consequences. The
Economic Commission for Latin America and the Caribbean (ECLAC) actively participates in this process and welcomes this opportunity to share with you a brief account of the activities it has undertaken in this area.
According to ECLAC estimates, since 1991 unemployment rates have trended upward. In fact, the sluggish pace of growth in the 1990s translated into an increase in urban unemployment from
5.8% at the beginning of the decade to 8.7% in 1999. Furthermore, with some exceptions, real wages have increased only slowly and, in some cases, have actually decreased in recent years. In addition, the slow, unstable economic growth of the region in the past few years has been centred, in many countries, in dynamic, capital-intensive sectors or in natural resource-based activities, which has displaced workers whose specific skills have become less valuable as a result. This has come on top of increasingly significant increases in the working-age population and in its members' participation in the labour market. This situation is compounded by structural gaps between the types of work available and the skills possessed by today's workforce owing to changes in technology and in the production structure.
Furthermore, the technological and organizational changes occurring both in business enterprises and within the economy as a whole during the last decade, which are undoubtedly associated with the efforts countries have made to optimize their linkages with global markets, have helped to heighten social inequity. Growth in employment and income has been concentrated in a smaller group, a fact reflected by the broadening of the wage gap between workers having different levels of education. The expansion of the wage gap is closely linked to and reinforced by the structural segmentation of the labour market, which is divided into formal or modern segments offering good working conditions, and others with low productivity and substandard conditions.
These segments are differentiated, among other things, by the stability of employment, levels of compensation and productivity, opportunities to take training and refresher courses, the length of periods of unemployment, turnover in jobs and employers, social security coverage, work environment and the presence or absence of labour contracts.
In short, the employment situation in the region is seriously lacking in terms of employment levels, as well as exhibiting marked inequities in access to productive jobs and a deterioration in social welfare systems. These trends deepened towards the end of the decade as the region's

- 3 - eco 1 nomies quickly fell victim to contagion from the financial crisis (a consequence of the globalization of financial markets) and represent important challenges for a strategy of growth with equity.
Both cyclical and structural factors underlie the region's insufficient employment levels.
Furthermore, there are certain population groups that are systematically denied access to productive employment or are subject to recurrent periods of unemployment. In light of these phenomena, society needs to restore mechanisms to deal with the situation, including policies which, in the long term, will boost productive employment levels and permit the establishment of a labour scheme that fosters increased productivity and competitiveness, the creation of conditions conducive to appropriate incorporation in the labour market of sectors that are disadvantaged or are discriminated against, and the adoption of systems designed to mitigate the effects of business cycles.
Against this backdrop ECLAC has carried out a number of activities dealing with the labour market. All of them are based on the institution’s comparative advantages in analytical terms, but they are also oriented towards the generation of public policy proposals. This presentation will focus on three projects dealing with impact of economic reforms, the competitiveness of women in labour markets and the policies required to improve technical and professional training.
In conjunction with researchers from nine countries (Argentina, Bolivia, Brazil, Chile,
Colombia, Costa Rica, Jamaica, Mexico and Peru) ECLAC prepared a study entitled Growth,
Employment and Equity: The Impact of Economic Reforms in Latin America and the Caribbean , which includes a module on labour markets in the region. One feature of the project that distinguishes it from other comparative studies of economic reform is that it disaggregates regional data and then explores the differences to be found across countries and, at the microeconomic level, in the conduct of companies according to sector, size and ownership. Government policies in such spheres as structural reform affect different countries and groups of companies in different ways, as does the globalization of the economy.
The differing effects of reforms are also evident in labour markets, and the study's findings attest to their profound heterogeneity. This diversity is partly due to the special way in which labour markets work, as reflected in the fact that some segments are driven by labour demand and others by supply. This analysis thus differs from those which start from the premise of homogeneous labour markets or which argue that their segmentation stems from politically induced distortions. Such approaches fail to capture the inherent dynamics of the region’s labour markets. In that context, the evidence shows that it is mistaken to speak (as some do) of "jobless growth", but that some sectors have indeed suffered a significant decline in labour intensity. As mentioned before, the productive restructuring triggered by reforms has not only affected job creation, but has also had a marked impact on the composition of employment. Changes within and between sectors have created a labour demand bias in favour of more educated workers, and this tends to aggravate labour market segmentation. This analysis clearly reveals the magnitude of the challenge facing the region in terms of creating more and better quality jobs.

- 4 -
In relation to the impact of globalization on the status of women, with the support and cooperation of the German Agency for Technical Cooperation (GTZ), the Women and Development
Unit of ECLAC is implementing a project on gender mainstreaming in ECLAC and sectoral ministries.
The aim of the project is to generate more efficient public policies in terms of social and gender equity against the backdrop of several globalization-related developments involving an increase in economic competition, and liberalization policies accompanied by the downsizing of the
State apparatus, and a call for its "modernization" with a view to making public institutions less costly and bureaucratic and more democratic and effective in fulfilling their mandates in pursuit of general well-being. The project is being focused on labour policy because this is one of the areas where the link between economic and social aspects of development is most apparent and because, as already mentioned, countries in the region have encountered significant challenges in implementing labour policies that can ensure quality employment for all. Moreover, women still face many obstacles that hinder their entry and continuance in the labour market, especially in stable, good-quality jobs, while households rely increasingly on women’s salaries for their subsistence; at the same time many production systems are also coming to depend increasingly —and in some cases already predominantly— on the female labour force.
The project activities focus on the analysis of the employment situation and capacity-building for advocacy in favour of more equitable labour policies in one specific economic sector in each one of the three countries involved: the health sector in Argentina, tourism in Ecuador and the exportprocessing (maquila) industry in El Salvador. The selection of these sectors was undertaken jointly with the respective governments on the basis of their strategic importance for each country, their dynamism and the degree of structural reform they have undergone.
The project has generated analyses of these sectoral labour markets —from a gender perspective— that have served as policy-making inputs. A distinctive feature of the project is that, right from the beginning, all of its activities have been designed to promote inter-sectoral and interagency collaboration. National women’s offices have taken a leading role in the project’s intersectoral coordination, which has provided the relevant ministries of labour and other sectoral ministries (e.g., health in Argentina; tourism in Ecuador), other public institutions, private enterprise, workers’ organizations and other non-governmental institutions with a platform for collaboration and negotiation oriented towards the achievement of shared objectives. In a second phase, activities will be aimed at guaranteeing the sustainability of the process in the three countries presently involved and at extending it to other countries in the region. It has already been decided that the next country to be brought into the project will be the Dominican Republic.
In addition to this project ECLAC, in cooperation with UNIFEM and the National Council for Women's Rights of Brazil, is organizing a high-level panel on globalization, trade liberalization and gender equity, to take place in São Paulo in November of this year. We are pleased to report that several ministries of labour, finance, economic affairs and other sectors have already confirmed their attendance at this meeting.
In view of the fact that improving individuals’ capacities and skills is one way to help overcome inequality, or at least poverty, ECLAC is implementing a project —once again with the support and co-operation of the GTZ— entitled “Policies to improve technical and professional training in Latin America and the Caribbean”. This project is based on the results of previous research which

- 5 - indicates that the available vocational training in the region has not contributed sufficiently to social development and does not adequately meet businesses’ need for qualified workers. In fact, the search for standard vocational training models for overcoming the prevailing shortcomings in this regard has proven to be unsuccessful. The heterogeneity existing at all levels with respect to demand, existing supply and the corresponding environment is simply too great. Given this situation, vocational training can only make an effective contribution to economic and social development if it is geared to the current and future economic and social needs of the specific environment concerned.
The project focuses on six countries in the region —Argentina, Brazil, Chile, Dominican
Republic, Guatemala and Mexico— and is aimed at generating concrete strategies and policy recommendations for vocational training in the region that will enable political decision-makers, employer and employee associations, individual companies, executing agencies, and bilateral and multilateral vocational-training cooperation projects and institutions to adapt the available options to the highly differentiated requirements of different contexts.
Looking ahead, ECLAC will continue to analyse the globalization process as a basis for the development of policy proposals designed to make the most of opportunities while reducing the vulnerabilities of countries in the region. To this end, ECLAC is preparing two documents for its next session. One presents a comprehensive diagnosis of the impact which globalization is having on the region, while the other puts forward a series of policy proposals.
This analysis will be based upon extensive research work carried out over the last few years on the macroeconomic phenomena generated by globalization, the new features and trends of trade and financial flows, the impact of new technologies on production patterns and the ensuing social effects, particularly those transmitted through the labour market. The second document will set forth a working concept of globalization that is built around its dual dimension, i.e., the globalization of markets and of values. It will also present an agenda for public action at the global, regional and national levels. At the global level, the emphasis will be placed on the need for adequate institutional frameworks for globalization that are capable of reconciling efficiency with solidarity. The document will also stress the need for comprehensive national strategies vis-à-vis globalization, and will discuss the degree of autonomy prevailing at the regional level.
ECLAC is pleased to place all the experience it has gained through the implementation of these activities —and, indeed, the entire range of its institutional endowment as it relates to the assessment of the labour and social dimensions of globalization in the Americas— at the service of the ministries of labour of the region.