Friday, October 21, 2005

Venezuela Labor: when a job is not a job

To follow the index on corruption published earlier this week and where Venezuela is ranked at the bottom tier of the class, a fact which greatly irritated the Vice P. Rangel, the International Labor Organization published its statistics on work conditions for Latin America. Not good, again, for Venezuela. Since the IOL is a UN dependency it will be more difficult for Rangel to try to trash them as he did try to trash early this week Transparency International. But I am sure that some nonsensical answer is in preparation.

Unfortunately I have not been able to locate on the IOL page these results. As it often happens, there might be a delay between their press release and their posting on the web, unless it is in a pay per view section. Thus I will limit my commentary on what El Universal reports (short English, longer Spanish).

In a nutshell, in spite of 7 glorious years of bolibananarian revolution and 3 of high to extremely high oil prices, we still are the country with the second highest unemployment rate in Latin America, 13.2 %. Only Colombia with a 15% jobless rate beats us, and at least they have the excuse of decades of civil war. But there was some good news: the oil driven easy money pseudo recovery of the last two years did manage to reduce the Venezuelan jobless rate. Or did it really?

The first troubling fact is that the ILO reports 52.3% for the informal economy sector. This is simply catastrophic. These people are outside the main circuits of welfare and work benefits: no health coverage, no retirement, no jobless benefits, no nothing. Not to mention that they do not contribute with their taxes to the general welfare of the country, in the positive sense of the term welfare. In addition barely half of people with a real job get any real social security and health care protection. How could that be?

Well, when the Caldera adminsitration left office in 1998 there was a new social security plan voted and ready for application, worked on a reasonable consensus between trade unions, government and private employers. That plan application was suspended because "the new constitution made it obsolete", never minding the contradiction that the old one was already unworkable and obsolete and that anything was better than the old one. Amazingly in a the5 years legislature reaching its end now the government never found a way to vote a new system ,even though it was designed in its large aspects as early as 2001. The reasons? Many I am sure, but two really:
  1. it is simply unaffordable with such a large informal sector to have a generous plan as the constitution mandates (not that it might be affordable if all worked at real jobs! some of the constitutional provisions of 1999 for welfare are not even found in the most advanced welfare states of Europe).
  2. quickly it became obvious that all programs had to be projected as coming from his magnificence, El Supremo, and not from a constitutional right. So a comprehensive and organized social security and health care plan was substituted by Misiones which served the political purpose to keep Chavez populist and popular.
But it is not all. The government still had to produce statistics as to show that the Misiones were working and the economic policies (?) were generating prosperity. Unable to demonstrate that, the director of the National Institute for statistics, Elias Eljuri, previously chastised in public by Chavez, decided to change the way poverty in Venezuela was measured. And voilà! a 14% decrease in the poverty rate in barely a year. Potemkin would be proud! To top it off you can also add an official unemployment rate of 11.8%!

But even when they cheat, they cannot do it right. The graph published in Saturday print edition of El Universal showed a dramatic drop in the past quarter, just when the calculation method was changed. A drop even higher than the poverty increase caused by the oil strike if we are to believe chavismo propaganda on that subject. The change in the poverty index calculation, by the way, stresses more on the artificially inflated NGP of Venezuela, courtesy of the sky high oil prices. Geez! How creative!

And to ingratiate himself more to his boss, hard pressed for results that are not coming, Eljuri added that the "other" numbers were meaningless, that only the government knew what it was talking about when poverty was the talk. Dismissing thus all sorts of organizations, including the UN, who have been reporting results quite contradictory to the rosy figures of the government.

But let's look at the truth behind all of that. Numbers have long ceased to be meaningful in Venezuela as nothing that the government does can be audited by independent observers. This applies as well to PDVSA, crime rate, budget accounting, or Chavez Airbus. Fortunately we know enough hard evidence to realize that the Chavez administration is caught in a lie as to poverty and unemployment.

The number of street kids and indigents not only in Caracas but in the country side keeps increasing, as this blogger can report. Even in his own small home town he can observe the deep misery increasing as the government obviously only cares to solve the problems of the people that might be induced to vote for them. Yes, why is it that I have never seen as much poverty in the streets as I am seeing now?

But other things are even more shameful. To decrease the unemployment figure, many of the Misiones recipients are considered as gainfully employed. Some Misiones pay ONLY a fraction of the minimal wage for people to receive some sort of training, or just go to political rallies. That meager stipend of course does not come with the normal benefits required by Venezuelan labor laws such as vacation, social security, some form of health care, etc... Only if you keep bouncing back from Mision to Mision you will get some of these benefits, and only if you constantly restate your support for the Chavez regime.

The truth that the government refuses to see is that only strong jobs creation will solve poverty on the long run. Right now, with all the social and judicial insecurity observed the only job creation comes from state investments and the private partners it drags with it. Independent private sector investment is low, limited in its scope to maintainance. The best investment still is to take your money out in US dollars since Venezuelan inflation is still well above 10% and a devaluation will come eventually, as certain as death and taxes do.

Eljuri can try all what he can to make his boss look good, a Mision job will never be as good as a stable minimal wage assorted with all benefits, as meager as those might be.

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