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Peru Labor and Capital in the Industrial Sector
In line with its basic conception of social order, the
military government also created a complex system of
"industrial
communities." Under this system, firms in the modern
sector were
required to distribute part of their profits to workers in
the
form of dividends constituting ownership shares. The
intent was
to convert workers into property owners and property
ownership
into a form of sharing for the sake of class
reconciliation. But
in practice, the system never functioned well. The firms
did all
they could to avoid reporting profits in order to postpone
sharing ownership, sometimes by setting up companies
outside the
system to which they channeled profits, sometimes by
adjusting
the books, and in general by keeping one step ahead of
intended
regulations. A small fraction of the industrial workers
gained
shares in firms, but as a rule workers were not so much
interested in long-term claims of ownership as they were
in
immediate working conditions and earnings. For organized
labor,
the whole approach seemed an attempt to subvert any role
for
union action and to make organization irrelevant. The
system was
not popular with either side. It was quickly abandoned
when the
more conservative wing of the military took power away
from
General Velasco in 1975.
Attempted reform of labor relations in the mid-1970s
also
included severe restrictions on rights to discharge
workers once
they passed a brief trial period of employment. A review
process
set up to examine disputes was implemented in a way that
made
discharges practically impossible. Businesspeople
circumvented
the restrictions to some degree by hiring workers on a
temporary
basis up to the point at which they would have to be kept
and
then letting them go before the restrictions applied.
Businesspeople remained unremittingly hostile to this type
of
regulation, primarily on the grounds that it took away
their main
means of exercising discipline over their workers. This
form of
regulation was also eliminated shortly after Velasco lost
power.
Data as of September 1992
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