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Article Artículo

Brazil

Latin America and the Caribbean

World

A Brief Look at Brazilian Social Movements

Brazil currently has its most conservative Congress in decades. As violence against social movements increases and the criminalization of Brazilian social movements in the media and judiciary intensifies, it is a good time to take a closer look at who these movements are and what they are doing. How did they start, and what is their position in the current political context? This article is meant to serve as a very brief introduction to two of the largest Brazilian social movements: the MST and the UNMP.

During the 1970s, as Brazil suffered under a U.S.-supported neofascist military dictatorship, liberation theology factions within the Catholic Church created political organizing groups, called ecclesiastic base communities, in poor villages and slums. Using methodological tools developed by philosophers such as Paulo Freire, and influenced by Marxism, the priests and nuns began to develop local leaders and organize exchanges among them at the local, regional and national level. There were other factors at work, but the role that liberation theologians played, from the final years of the dictatorship until their censure by the Church hierarchy in the late 1980s and early 1990s, was fundamental in the formation of the popular (or “poor people's”) social movements. These movements played an important part in creating one of world's most progressive constitutions, as well as in the formation of the PT (Workers Party), and the elections and re-elections of Lula Inacio da Silva and Dilma Rousseff.

FNRUPhoto courtesy of the UNMP-São Paulo.

The Movimento dos Trabalhadores Sem Terra, or MST (commonly called the Landless Peasants' Movement, or Landless Workers' Movement), was created in 1984 to address historic inequalities in rural areas (caused by 500 years of monoculture) by fighting for agrarian reform, collectively squatting on and farming on unproductive land under the slogan “Occupy, Resist, Produce.” Due mainly to its efforts, this practice is considered legal under the 1988 Constitution (although the Constitution is frequently ignored by local governments and the judiciary in Brazil) and is now regulated, supported and protected by a government agency called the Instituto Nacional de Colonização e Reforma Agrária.

CEPR and Brian Mier (Guest post) / May 21, 2015

Article Artículo

Niall Ferguson Goes to Bat for Cameron, Osborne, and Austerity

I see that Niall Ferguson is again pushing the case that the austerity pursued by the Cameron government in 2010 was both necessary and good. This can be a useful opportunity to show why the history since the Conservatives took power does not support this claim, even though they managed to get re-elected.

To quickly summarize Ferguson’s case, he argues that the turn to austerity was a matter of necessity, not choice. The U.K. had a high and rising debt burden. Furthermore, inflation was increasing and reaching dangerous levels. So it was necessary for the government to take quick action to reduce the deficit to keep the economy on a stable path. However, once on this course the economy quickly rebounded. The government’s actions restored business confidence leading to strong investment and growth.

Let’s start with the debt story. Ferguson cites a study from the Bank of International Settlements and argues that the government faced a much worse debt picture than other countries:

“The baseline scenario for the UK at that time was that, in the absence of fiscal reform, public debt would rise from 50% of GDP to above 500% by 2040. Only Japan was forecast to have a higher debt ratio by 2040 in the absence of reform."

Okay, that sounds pretty bad. Of course there is a long time between 2010 and 2040 to deal with rising debt if it becomes a burden on the economy, but there are two points that argue strongly there was no need for the Cameron government to be concerned about a financial panic sinking the country.

Dean Baker / May 21, 2015

Article Artículo

Globalization and Trade

Honduras

Latin America and the Caribbean

World

Maquiladora Industry Wages in Central America Are Not Living Wages

While the maquiladora export industry is sometimes touted as a symbol of progress and development in underdeveloped countries, the reality for many workers implies otherwise. In Central America, maquilas act as multinational levers to gain profit, but are not a guarantee of a sufficient income for workers.

According to a 2014 report [PDF] published by labor and social organizations, in El Salvador, Guatemala and Honduras – the Northern Triangle countries of Central America – approximately 350,000 [PDF] workers are employed in the maquiladora industry: 80,000 in El Salvador, 150,729 in Guatemala and 120,000 in Honduras.  As Table 1 illustrates, on average, 54 percent [PDF] of these countries’ total exports to the U.S. are produced in the maquiladora industry (42 percent for El Salvador, 55 percent for Guatemala and 65 percent for Honduras).

Table 1

Data from the U.S. Office of Textiles and Apparel shows that Central America and the Dominican Republic produce around 10 percent of all apparel goods purchased in the U.S., of which 70 percent is produced in Guatemala, El Salvador and Honduras. This means that Central America is behind only China (which produces 36 percent) and Vietnam (which produces 11 percent) in clothing exports to the U.S. Among the largest sectors that Central America exports to the U.S. are cotton knitted T-shirts (23.1 percent of these U.S. imports in dollars) and cotton underwear (24.7 percent of these U.S. imports in dollars).

The apparel export industry in Central America is concentrated in the hands of a few multinationals. Fruit of the Loom, Hanes, and Gildan Activewear are three of the biggest North American corporations operating in Honduras, employing around 25 percent of maquiladora workers in the country. Fruit of the Loom alone employs approximately 24,000 workers in Honduras and El Salvador. Nike and Adidas also subcontract production to maquiladoras; together they have about 30 outsourcing companies in Honduras alone.

CEPR and Mateo Crossa / May 20, 2015

Article Artículo

Affordable Care Act

Health and Social Programs

Workers

The ACA and Workers’ Freedom

In March of 2014, nothing seemed to be going right for the Affordable Care Act (ACA). Members of the press were maligning the problems with the Healthcare.gov website, which had actually been fixed months beforehand. Enrollment on the ACA’s health insurance exchanges was far below projections. And perhaps worst yet, the ACA’s critics were claiming that the law would incentivize firms to cut workers’ hours and create a surge in part-time employment.

Discussion about the problems with the website subsided over time. And the claims about low enrollment figures were shot down in April, when it came to light that enrollment had surged during the previous month. It’s time that we shelved the critique about part-time work as well.

CEPR and Nicolas Buffie / May 19, 2015

Article Artículo

Imports Displace Domestic Jobs: Why Do Proponents of Trade Agreements Have So Much Trouble Acknowledging This Fact?

Suppose Ford closes an assembly plant in Ohio and instead has its cars assembled in Mexico and shipped back to the United States. The workers in the Ohio factory have lost their jobs because of imports. This is a very simple point. For some reason supporters of trade deals like the Trans-Pacific Partnership (TPP) have trouble acknowledging this basic fact.

The difficulty that TPP proponents have acknowledging the jobs lost due to imports is bizarre, because the job loss does not mean that the TPP would be bad policy. It is simply a factor that must be assessed in considering the overall merits of the deal. It is not possible to have a serious assessment of the impact of TPP or any trade deal without considering the workers who would likely lose their jobs due to increased imports. It is also important to note that the impact stems well beyond the workers who lose their jobs to the much larger number who see a reduction in pay as a result of reduced demand for their labor.

With a recent report on the topic, the Congressional Research Service (CRS) seems to have joined the ranks of the denialists. The report goes to great lengths to argue that it is not possible to produce a figure for jobs lost due to imports that is comparable to the International Trade Administration (ITA) estimate that $1 billion of exports supports an average of 5,590 jobs. Rather than providing information to members of Congress about the likely impact of trade on jobs, this report seems to be a deliberate effort at obscuring the issue so as to leave members confused about the extent to which imports will displace jobs.

Dean Baker / May 19, 2015