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Lecture 5

GEO 3050 Week 5 Whitson.docx

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GEOG 3050
Kate Parizeau

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Week 5 – Whitson “Beyond the Crisis: Economic globalization and informal work in urban Argentina” General Overview of Article The article is about the economic crisis in Argentina that happen predominately in 2002 where rates of informal work rose to extremely high levels. The Researcher, Rita Whitson, conducted interviews with these informal workers and asked them questions about conditions in the country and the general nature of work in Argentina. Her main point is that the lack of formal work, an increase in probationary employment and an increase in contract arrangements are all major causes of informal work. She says that in order to understand informal work in Argentina we need to understand the history of globalization and neoliberal policies that have shaped the informal work industry in the country. The neoliberal economic policies that have affected globalization were trade liberalization, privatization and deregulation. It is her opinion that the boom in informal work was not the outcome of the crisis but was caused by the long term effect globalization has had on the country and the crisis was just the last straw. The Argentine Context In between the years 1976-1983 the country‟s debt rapidly started to increase with the replacement of protectionist strategies with trade liberalization. (Quote from the article): “the economy was opened and wages disciplined: „efficiency‟ and „accumulation‟ were suggested by export growth, a massive inflow of foreign capital and a near forty percent contraction in real wages.” There was a period of military rule that was overcome by democracy however the economic situation worsened and disinvestment and deficit in increased. By 1989, after a decade, the economy was lead to conditions of extreme hyperinflation. Carlos Menem took office in 1989 during these conditions and implemented changes to the economic governance of the country. Privatization, a convertibility plan, regional integration and trade liberalization were used to bring in systems in the labour market that helped to improve the state of the economy in the 1990s. However, this incline was short lived and by the beginning of the start of the millennium living conditions for the lower and middle-class citizens where declining and unemployment rates were rising. Less money was being put into basic educational and health services. By 2002 the crisis had fully affected all of Argentina‟s citizens as the peso was devaluated and the cost of food and basic commodities was inflated. The unemployment rate rose to 25% in areas of the country and rates of poverty rose from 16% in 1991 to over 50% in 2002. Understanding Informal Work in Contemporary Argentina Informal work is defined as work that deals with legal products or services although the production or distribution of these is either illegal or unregulated. It often lacks contract with no benefits, is excluded from legal labour laws and is unregistered and untaxed. There are three main theoretical approaches: structuralist, neoliberal and neomarxist. -Structuralist view: views informal work as primarily as subsistence activity resulting from a lack of formal work opportunities. It also views work as “disguised unemployment” and it is a reserve pool of work for the modern sector. -Neoliberal approach: argues that informal work results from overregulation and favoritism of economic elites in a mercantilist economy. This approach associates informal work with dynamic micro- entrepreneurial, focusing in self-employed workers who prefer formality over excessive regulation. -Neo-marxist view: views that informal work is connected to the formal sector in a relationship of dependency such as core countries and peripheral ones. This approach cites an environment of increasing regulation as one cause of informality. -Researches argue that informality is increasing globally as a result of the implementation of policies of economic globalization. Others follow the structuralist perspective in identifying informal work as composed of the self-employed, small-scale enterprises, domestic workers and unremunerated family workers. Since the mid 1970s, contemporary informality in Argentina has undergone gradual but continual expansion in conjunction with increased globalization through economic liberalization. For the mid to late 1970s, researchers attribute this to the liberalization policies of the military dictatorship and estimate that informal work grew between 35-40% of workers by the beginning of the 1980s. Methodology 93 in-depth semi-structured interviews we conducted with informal workers in Buenos Aries from January to December 2002. Secondary document analysis and limited ethnographic observation were also used to support this analysis. A purposive sample design was used to provide the maximum amount of variety among informal workers possible. -Although the sample of informal workers used for this research is not representative of the population of informal
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