Uruguay's unique problem --- unemployment is too LOW

[rabs]

Several projects will need to hire eight and ten thousand workers


Uruguayan Low Unemployment Causing Problems

To have low unemployment is something most countries would be proud of and not moan about. However, in Uruguay unemployment is at an all-time low of 6.1% and is causing concern among economists, human resource companies and businesses, reports the BBC.

“Businesses are starting to be unable to find workers, it is complicated to find workers in Uruguay, not just skilled ones, but people who really can do the work,” economist Alfonso Capurro from the consultants CFA Ferrere said. “The other problem low unemployment can bring, is that it can put pressure on inflation,” he added.

The manager of Advice Consultants Federico Muttoni, said that “sustained economic growth over the last few years, an increase in foreign investment and in agriculture and forestry has created many new jobs and now it is hard to satisfy the demand for adequately skilled workers.”

The situation will get worse, Juan Manuel Rodriquez, director of the National Institute of Employment predicted, because of several projects which are due to commence this year. These include a pulp mill and mining, which between them will need to hire eight and ten thousand workers.

One of the solutions is to give Uruguayans living abroad, incentives to return to their country. A few months ago the Uruguayan government suggested that the Spanish government that offer incentives to Uruguayans living in Spain, who worked there during the construction boom, so that they return to Uruguay and work in the flourishing industry there.


----------snip ----------

Construction is facing difficulties to find qualified workers to hire and the Construction Chamber has suggested that the Defence Ministry train military personnel as builders, for when they are needed, and they could continue to work in building, once they have completed their obligatory military service.



http://en.mercopress.com/2011/01/20/uruguayan-low-unemployment-causing-problems

[social_critic]

1. When workers gain power, it's called inflation, when corporations gain power, it's higher profits

I think it's useful to understand the way things are described and manipulated. When the working class gains more power, which they do when there's a labor shortage, they are free to ask for better wages. This in turn drives up costs and reduces profits, and induces "the owner" to raise prices - which can lead to inflation.

But when the working class loses power, and wages go down, then the corporate profits go up, and they are very competitive, which means they keep their prices low. This is defined as being good. Thus countries follow policies which weaken the working class' ability to seek higher wages.

I've observed this behavior over and over, and to my chagrin, I have also observed leftists fall into this trap, and encourage free trade and worker imports which reduce the working class' power, and raise the power of the rich elites.

The best option, as far as i can see, is to have a national Value Added Tax, say 10 %. This tax can be raised or lowered as inflationary pressures hit. The tax is regressive, but it's easy to fix this by giving the working class a tax credit - just mail everybody a $400 check per person included in the tax return in January of each year. Another method which can be used is to have targeted immigration - bring in immigrants who can help with labor shortages. But this has to be done carefully so as not to upset the apple cart.

My friends, the key is to understand the way the strings are pulled, and to be fairly cold blooded about the way the system is run. For example, the word VAT raises people's hair on end - but I can show it's easy to defuse its regressiveness with the rebate scheme I described. The same can be said about immigration. Immigration as such is desirable. But it needs to be managed so as to make sure the job market is taken into consideration. For example, right now I would flood the job market with Wall Street types. They make a lot of money, which tells me there are too few of them. So I say why not have a program to bring in 100,000 business school and economics graduates from other countries? This should drive down those obscene Wall Street wages.

[dipsydoodle]

2. They had a similar problem

in Western Australia a few years back.

Woolworths couldn't get enough staff for checkouts often resulting in 100 yard queues out outside their stores and the routine catering staff , table clearers whatever , at some of the mines were being paid c. AU$50k in an effort to attract staff.

[naaman fletcher]

3. It's not a problem.. wages need to nudge up a bit.

That is what business is really worried about. They are dancing in circles about all the millions of profits they see for the next ten years and then say "oh wait, we have to give some of it to the workers? Crap, let's create a phony crises so we can import cheaper labor from elsewhere".

[Judi Lynn]

4. Amazing. n/t

[Peace Patriot]

5. What strikes me about this article is who it DOESN'T consult--workers, labor leaders,

students, parents, teachers, spokespeople for immigrants or potential immigrants, advocates of the poor*, critics of the industries or projects that say they can't find qualified workers (such as environmentalists, or leaders of impacted local communities), and, curiously--since the article has a pro-business slant--any industry leader who agrees (or disagrees) with the premises of the article.

Here are the parties quoted in the article:

--economist Alfonso Capurro from the consultants CFA

--manager of Advice Consultants Federico Muttoni

--director of the National Institute of Employment (I'm not sure if it's gov't or private)

--Manpower's Neker de la Lllana (Manpower in the U.S. is a private, for-profit matcher of employers/employees; not sure of its nature in Uruguay).

As a leftist, I find the lack of labor comment the most notable, and the biggest "black hole" (where information should be) that makes the situation difficult, if not impossible, to understand. What is the condition of labor rights, wages/benefits, workplace safety, etc., in Uruguay? How much of the workforce is unionized? Are workers in the more dangerous industries (mining, logging) adequately protected? What do labor leaders say about this "labor shortage"? (Exaggerated? Not real? Bosses' bullshit? Agree totally with economists and bosses about it?) Do they agree that 6.5% unemployment is "low"? (That's a lot of jobless people.) What do they have to say about these industries, which are supposedly suffering a labor shortage, paying their fare share of taxes and social costs--education, health care, infrastructure, emergency services, pensions, etc.? Are these "crybaby" industry leaders, trying to get the government to pay for training their workers, while not paying their fair share, or trying to get it to import workers, to flood the market and lower wages? Are industry bosses inventing a problem where there is none? I'd like to know labor's view of it.

Inflation (often a business shibboleth) is mentioned but no inflation figure is given. The CFA consultant says that low unemployment "can put pressure on inflation" (my emphasis). But has it? And will it be likely to? How long has this "labor shortage" been going on, with what impact on wages/prices?

The article is very vague. It says: "This salary increase, in some sectors, has already led to price increases and this generates inflation." Notice that it doesn't say that it has generated inflation--and it gives no figures at all, neither about inflation, nor about the size of of wages before the increase, nor about the prior and current costs of anything at all--food, housing, transportation, nothing. This is meaningless drivel without figures and context.

I find this article (which is a Mercopress reprint of a BBC** article) very uninformative. And whenever I hear the word "inflation" in the context of 6.5% unemployment (which I consider unacceptably high in a healthy economy/society), I figure I'm hearing yet more corporate/Wall Street bullshit.

---------

(*No "advocate of the poor, other than a brief reference to--but not consultation with or quote of--Jose Mujica, the leftist president of Uruguay. Since he suffered imprisonment and torture at the hands of rightwing fuckers who were acting in the interest of big business, he would surely have something to say about these issues, besides his general campaign promise to improve the education system. The lack of a quote here is quite notable. Did Mujica link education to these big business concerns--or say (or even imply) that the government should pour money into education reform in order to flood the market with workers, to keep wages and inflation down? It is the implication of the article that, just because Mujica promised education reform, he agrees with these concerns--that labor has too much power, that 6.5% unemployment is "too low," that Uruguay should flood Uruguay with newly trained and/or immigrant workers to drive wages down, and that he is worried about "inflation." This is likely the reason why they don't quote or consult him. They are misrepresenting his views. **And just a side-note: The BBC is absolutely terrible on news about the Latin American left. They are as bad as the New York Slimes and the Associated Pukes on this subject.)