Carlos Salas

Jobs and inequality in two Latin American countries blocs

Policy successes and diminishing returns for labor

14 pages · 2.86 EUR
(September 2016)

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Introduction:

During the 1980 and 1990s, many Latin American countries were dominated by conservative governments with orthodox neoliberal policies that came alongside with stagnation and economic crisis, rising poverty and low-income jobs. By the end of the 1990s, the economic and political panorama of Latin America went through generalized transformations as the area gained a diversity of new governments and changes in the economic landscape with renewed growth and rising exports. Among the achievements were general gains in GDP per capita and diminishing poverty rates, along with a reduction in income inequality throughout the Continent. Despite of similar trends, a careful look at the region exhibits important differences in worker's bargaining power. HansJörg Herr has emphasized in his recent work on elements that help to diminish inequality, the importance of such bargaining power for a sustained wage growth along with job creation and for policies to rise minimum wages.

For that purpose we will use a two-bloc division of countries. The first includes Pacific facing countries: Mexico, Colombia, Peru and Chile and the other one includes Atlantic facing ones: Argentina, Brazil, Venezuela, and Uruguay.