Excerpt from Latin America: Social and Gender Impacts of the Economic Crisis
By Alma Espino & Norma Sanchís, Association for Women’s Rights in Development (AWID)
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4. What are the social and gender impacts of the crisis?
The ILO Report on Global Employment Trends for 2009 estimates that the current crisis could generate some 50 million new unemployed persons in the world, of which 22 million would be women. In the case of Latin America, the Labour Panoramic 2008 set out some scenarios that project that unemployment in the region could rise from 7.3% in 2008 to between 7.9% and 8.3% in 2009. This means that in 2009, the Latin American region could have between 1.5 and 2.4 million newly unemployed people.9 In the same report, the ILO estimates that the number of people who are active in the labour market but who earn an income below the poverty line of two dollars a day (which the ILO calls “poor workers”), could rise from 6.8% in 2007 to 8.7% in 2009. This implies a rise of five million poor workers in Latin America and the Caribbean.
ECLAC forecasts that the crisis will have a differential gender impact in Latin America, much in the same way that the insertion of men and women in the labour market is differential. The gap in the employment rate between women with low and high income (first and fifth quintiles) is greater than between low and high income men and reflects the presence of obstacles for the poorest, which could worsen in a crisis situation. In general, unemployment and employment in the informal market are higher among women, implying a lack of social security and income instability. However the conditions are more serious amongst the poorest women, with both the rates of unemployment and informality increasing. It is important to note that historical data places a higher percentage of women in low productivity sectors than men.
In the contract manufacturing sector, direct employment in Central America at the start of 2008 was 411,502 (Trucchi 2009). At the end of the same year, the textile industry lost 51,538 jobs, with an average decline of 13.5% and with the highest losses recorded in Nicaragua (21.47%) (Trucchi 2009). Approximately 65% of the people who lost their jobs were women. During the first trimester of 2009, 27,400 jobs were lost. Consequently the total number of jobs lost in 2008-2009 in Central America was 78,938 (Trucchi 2009). Prior to the crisis other factors led to a decline in female labour, such as the emergence of new industrial sectors (barring the clothing industry) where female participation is lower. Additionally, several companies left the region citing cost reasons.
Gender segregation by both sector and occupation means that some sectors have a disproportionately high level of female participation. These sectors – such as formal trade, financial services, and the manufacturing industry (especially textile manufacturing and contract manufacturing generally) – could find themselves strongly affected by the economic crisis. Workers in the tourism sector – a sector marked by extreme elasticity with respect to income – may find themselves amongst the worst hit by the crisis. These workers include those involved in the production and commercialization of crafts and gastronomy, hotel and gastronomic services, tourism operators, and craft vendors, as well as the domestic help within restaurants and hotels. The fall in demand for labour in larger companies will increase the proportion of employment in low productivity sectors, most likely increasing the rate of informality, which currently stands at around 57% in LAC (ECLAC, 2008). Additionally, the decreased availability of fiscal resources could negatively impact social spending. This could mean greater pressure on home caregivers, the majority of whom are women.
5. Poverty: a further consequence
Food prices are forecast to rise, provoking an increase in poverty. In particular, the price of food is estimated to rise 15%, inducing a 2.8% rise in poverty (Grynspan, 2009). This took the figure of 35.1% of the population living in a situation of poverty in 2007 to 37.9% in 2008 (Grynspan, 2009). Without public policy intervention, destitution could also increase from 12.7% to 15.6% (Grynspan, 2009). Additionally, it is possible that the region will back pedal on its advances in reducing malnutrition and child and maternal mortality in recent years (Grynspan, 2009).
Women have historically been at a disadvantage in the labour market. Concomitantly, poverty and deteriorating health intensifies the care-giving activities that women undertake in the home to alleviate the consequences of poverty.
The economic policies implemented in the region during the last decades have worsened women’s situation, increasing fragility and workload. An integral feminist analysis points not only to the disadvantages and inequality in the social and labour insertion of women, but also evaluates how certain political decisions have been made feasible by the elasticity which characterizes the work load supported by women in the market and in the home.
In order to estimate the foreseeable impacts of the current crisis, it is useful to revisit the effects of previous crises such as the “debt crisis” in the 1970s and 1980s, which occurred when Mexico announced a moratorium on external debt. At that moment a series of structural adjustment measures were implemented. Similarly, austerity measures were used to combat the Mexican crisis in 1994, in those countries affected by the Asian crisis in 1997, and in the Russian crisis in 1998. The consequences of these adjustments had disparate and unequal impacts across populations; poverty indices worsened and income became less equitable, leading to an increase in socioeconomic polarization (Beerier, 2003). The political response to the Asian financial crisis in 1998 has been criticized for imposing cuts in public spending and promoting greater liberalization in the markets.10
One of the impacts of this was that women were disproportionately affected in the labour market.
Historically, men and women have been positioned differently in the market due to constructed norms in behaviors and attitudes. In part, this explains why the costs arising from economic recuperation differ between men and women. Women are doubly affected; their condition as women and their social group membership shape their experiences of crises. Basically, women become adjustment variables of a crisis in both the family and in the labour market. At the family level, in order to provide basic services and supplies (as State compensatory measures are withdrawn) domestic work intensifies. With respect to the labour market, female participation tends to increase – particularly in very precarious, poorly paid jobs, with deteriorating conditions – in order to compensate for male unemployment. The double labour load is therefore present both inside and outside of the household. In this way, the adjustment is based on the elasticity of the load which falls onto women.
In addition to the financial costs of an economic crisis, other, less visible, costs – such as stress and domestic violence – are incurred and, indeed, appear to increase during these periods. To complicate the situation further, public policies to address historic feminist demands are weakened during these times. Reduction in social spending and cuts in budgets negatively impact on the health system: free contraceptives are no longer available and public health care provision for abortions is no longer provided. The same thing occurs in the education system and with human rights programs addressing violence against women (Beneria, 2003).
Taking into account prior crisis experiences as well as the initial impacts of the current crisis, it is clear that the fall in income and loss in jobs from the export industries and other activities – caused by the fall in global demand – will affect the LAC region’s population, including women, and especially those employed in sectors such as tourism where female participation is high. Credit restrictions that affect microcredit will have serious impacts on female entrepreneurs and women in the agricultural sector. In those countries where households maintain themselves with remittances from abroad, a decline in remittances will also impact household incomes where family members are looking for work or where alternative income generation will be more difficult.