Hordes in Argentina Unemployed, Desperate

February 27, 2004

BUENOS AIRES, Argentina – Though the economy finally is picking up after the worst financial crisis in Argentina’s history, fear is widespread that this country’s middle class will never recover, and that its working class will continue disintegrating into a mass of desperate poor.

Workers wonder if they will ever again see the jobs with steady hours, decent wages and solid benefits that made Argentina the economic pearl of Latin America.

Their doubt gnaws at this once-proud country, creating a collective wariness as potentially profound as the fallout in dollars and cents.

“THE anarchy of two years ago has subsided,” said Augusto Salvia, a sociologist at the Catholic University of Buenos Aires, referring to the riots and demonstrations that rocked Argentina after the crash. “But among the unemployed and underemployed, there is still widespread pessimism about the future.”

Thanks to decades of economic prosperity and social mobility, more than two-thirds of Argentina’s work force was middle class by the 1990s – a stunning contrast to most of Latin America, which is divided into a wealthy few and a poor majority.

BUT after years of free-market policies and government mismanagement, the economy took a nosedive in late 2001 and early 2002. The country defaulted on billions of dollars in loans, the peso plummeted by 70% and half of those employed ost their jobs.

Despite 8% economic growth last year, half the country lives below the poverty line, and more than a third of the  labor force remains unemployed or underemployed. Of 1.5 million jobs created since the crash, Salvia said only about 300,000 are full time with formal contracts; 800,000 are part-time, government- sponsored work-for-welfare posts.

“ARGENTINAis still almost at rock bottom,” said Alan Cibils, a Buenos Aires-based economist who works with the Center for Economic and Policy Research of Washington, D.C. The jury is still out, Cibils said, on “whether the country will return to a Third World economy.”

 

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