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As Joblessness Triples, Argentines Put the Heat on Menem to Act


After more than five years working for a large construction company, Rodolfo Bordon, an accountant, was laid off early last year as the company dumped much of its staff to stave off impending bankruptcy.

In the months that followed, he scoured classified ads and called on dozens of firms to find work as an accountant. Finding few prospects in an industry squeezed by recession, he is now hustling to land any kind of job.

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"It's frustrating," Mr. Bordon says, standing in a line outside a private post office, waiting to apply for a mail carrier job. "I've sacrificed, I've worked hard to establish a career, and now I can't even find work for minimum wage."

For Bordon and for increasing numbers of people in Argentina, finding a job has become much harder. In the past five years, more than 1.5 million people have lost work, ballooning the unemployment rate to a high of 18.6 percent from 6 percent in 1991.

Adding to dismay over rising taxes and five years of local prices fixed to the dollar, the troubles wrought by unemployment have stirred social tensions and triggered in recent months a wave of marches, rallies, and public demonstrations against the government, leaving President Carlos Sal Menem and his ministers scrambling to defuse the criticism now starting to mount.

Long lines for jobs

The sudden surge of joblessness is hiking up competition for jobs. It's also making it easier for companies to slash wages and set rigid terms of employment: from hiring people at low salaries to perform two or three jobs, to hiring people under short-term contracts to avoid having to pay severance.

"Unemployment is taking its toll," said Teresa Durand, a sociologist for the Center for Studies of State and Society, a think tank here. "You have people who have been looking for work for two or three years; people over 35 or 40 are virtually shut out of the job market."

The rise in unemployment began five years ago as the government began to lay off workers as part of its economic reform program. At the same time, private companies, in a push to raise productivity to compete with foreign imports, began to automate factories and workplaces. In the span of two years, more than half a million people flooded the marketplace.

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In 1994, the economy plunged into a deep recession, after foreign investors and local creditors, fearing that Argentina might be poised for a repeat of the Mexican peso crash, pulled their dollars from local banks. Faced with shrinking deposits, banks curtailed lending and raised credit rates, squeezing thousands of small-to-medium-sized businesses.

Less capital for investment

At the same time, a sudden flight of capital from currency reserves led the government to withdraw millions of pesos from circulation to maintain the currency balance it requires to fix the peso to the dollar, choking off millions of dollars necessary for investment and economic expansion. Starved for cash, businesses and companies slashed costs by dumping workers and freezing hiring, leaving more than 3 million professionals without work.

With few jobs available in their professions, lawyers and engineers apply to drive taxis, architects and accountants to answer phones or hand out promotional flyers on street corners.

With many of them working off the books and thus ineligible for unemployment insurance, and most lacking any savings, the sudden wave of layoffs and business shutdowns has left many scrambling to meet basic needs.

In just the last year, largely as a result of surging unemployment, more than 700,000 people in greater Buenos Aires have slipped below the poverty line. As they face the possibility of a prolonged period without work, many in the middle class, traditionally among the most stable in Latin America, are starting to grow increasingly disillusioned.

Having gone now almost a year without a paycheck, Borden has sunk into debt. He has moved into his parents' cramped apartment on the outskirts of town and shares a tiny room with his older brother. "You get the feeling sometimes that you're out here looking for something that doesn't exist," Bordon said. "Sometimes, I start to wonder why I'm even getting up in the morning."

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