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Protecting Workers In a Global Economy

Chile, next in line for NAFTA membership, may prove a test case for international labor rights.

Lilian Rodriguez, Chilean seamstress, has a message for Richard Gephardt, US Democratic congressman: Don't give up the international battle for labor rights.

As the United States continues to haggle over whether labor and environmental issues should be part of future international free-trade agreements, particular attention is falling on Chile.

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One reason is that Chile stands next in line to join the North American Free Trade Agreement (NAFTA) with the United States, Canada, and Mexico. NAFTA includes both labor and environment sections.

Even though some analysts consider those provisions weak, many free-trade advocates oppose including them in future trade accords.

But the focus on Chile is also because the labor laws of this toothbrush-shaped country on South America's Pacific coast are themselves controversial.

For some observers, labor legislation here, inspired by the antiunion sentiments of Chile's military dictatorship, which ended in 1990, remains the weakest in South America.

The result has been long workdays, weak collective-bargaining power, and little worker protection in Chile, critics say.

But others say labor law - "rebalanced" after the 1973 coup from an entrenched pro-labor tilt - has played a central role in the "miracle" that has given Chile a decade of record economic growth and poverty reduction. And, they say, it stands up well against US labor law.

After President Clinton traveled to Santiago, Chile, last month to talk with hemispheric leaders, Representative Gephardt, a champion of labor rights, said he didn't like what he heard.

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Faulting the absence of a commitment to give labor issues equal weight in trade talks with business concerns, the Missouri Democrat said trade accords without protections for laborers would continue to earn his thumbs-down.

Gephardt was the engine behind opposition that derailed the Clinton administration's push for "fast track" trade negotiating authority last year.

If the future is indeed in a global economy, Gephardt told a recent AFL-CIO convention in Washington, "then the workers of Brazil, Mexico, or Argentina should have the same rights as American workers."

Such talk is music to Ms. Rodriguez's ears. The hand-finishing worker at a small knitted-goods workshop in Santiago says that if the sweaters she makes from Korean yarn for Asian investors are to be sold in markets around the world, then her labor rights should be an international issue as well.

"Workers should have some basic rights," she says, "and then you can go on to free-trade agreements."

In Chile, collective bargaining by industry - textile workers, miners, carpenters - is prohibited. All negotiations are limited to the individual company. And unions are generally allowed only in companies of 25 workers or more.

So businesses often split into small companies to avoid collective bargaining, leaving workers on their own.

At boss's mercy

Legal strikes are limited to a small window of time during contract negotiations. Seasonal workers, particularly on Chile's extensive fruit and vegetable farms, are not protected under collective-bargaining rights. Firing employees is at the employer's discretion.

"We went from one of the more protective labor laws [before the coup] to one of the most flexible," says Hugo Yaes, a lawyer with the Labor Ministry's research department. "The idea was clearly to adapt the Chilean labor market for a new economic focus" on attracting foreign investment.

Such labor laws created the humming Patronato neighborhood where Rodriguez works.

Street after street of small clothing stores give the area the feel of a bustling shopping district - except that here almost every shop has a back room or upstairs workshop with a handful of workers producing the pants, shirts, and jackets on sale out front.

By law, the work week is 48 hours, but many of the women in Patronato say they work longer.

Most jobs are short-lived to keep down costs of vacation, maternity, and other benefits, the women say. Some workshops don't have bathrooms, they add, or don't provide a place to eat the lunches the women bring from home.

And with no unions to take up grievances, individual workers who pressure for improvements are labeled troublemakers and often dismissed, workers say.

"The laws we have are weak, and even they are not enforced," says Felisa Garay, a former textile worker who now runs a women's lunchroom in Patronato and advises women workers of their rights. "You have to remember our legislation comes basically out of the dictatorship."

Push for reform

Chilean labor law has been amended several times since the return of democracy in 1990. Yet while some economists say the reforms took sufficient steps toward restoring worker rights, the changes win little praise from labor advocates.

The reforms "dressed things up a little better, but really kept them as they were," says Oscar Ermida in the Santiago office of the Geneva-based International Labor Organization.

The government of President Eduardo Frei has tried to take reforms further, to extend collective-bargaining rights to seasonal workers, for example.

But conservative members of Chile's Senate defeated the government's most recent reform package, and December elections only strengthened the conservative wing in the Senate.

But none of that should stop the US from moving forward on a free-trade accord with Chile, say some economists here.

"The fact is that while Chile's labor law may be more flexible than others around Latin America, it does give workers what they want, which is more jobs, increasing salaries, and ultimately a better quality of life," says Fernando Coloma, an economist at the Catholic University of Chile in Santiago.

Annual job growth in Chile in the 1990s has been 2.5 percent, he says, while wages have increased an average 4.4 percent annually over inflation over the same period.

Mr. Coloma says he doesn't favor including labor clauses in trade accords "because it's generally an excuse to introduce trade barriers."

As for Gephardt's call for foreign workers to enjoy the equivalent of US labor rights, Coloma says he's not sure Chilean labor leaders would welcome that deal.

It's a point echoed by some US officials, who point to some aspects of Chilean law that guarantee workers more rights than US legislation does.

Noting shortcomings on severance pay and maternity leave in the US, Coloma says, "I think if you put the two [labor laws] on the table, our labor leaders would say 'Wait a moment' before they jumped to accept US law."

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