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114 Int'l Lab. Rev. 355 (1976)
The Informal Urban Sector in Latin America

handle is hein.journals/intlr114 and id is 363 raw text is: International Labour Review, Vol. 114, No. 3, November-December 1976 The informal urban sector in Latin America' Paulo R. SOUZA 2 and Victor E. TOKMAN 3 The origins of the informal sector The most striking feature of the development process in Latin America in recent decades has been the slow expansion of productive employment oppor- tunities in spite of fairly rapid economic growth. This phenomenon is to be explained in part by the path that development has followed in the region. Urban-based production units were set up in the first place to satisfy a small and highly diversified demand for consumer goods. Moreover, Latin American industry grew up to a large extent during a period of world-wide expansion by giant corporations, of which many Latin American enterprises were in fact subsidiaries, and this left its mark on the type of goods produced and on the technology employed. Finally, while the technical advances introduced were ostensibly capital-saving, their net effect was actually labour-saving. All this resulted in an oligopolistic type of market in which incomes were highly concentrated and the modernisation process, far from encouraging economic integration and harmonisation, appears actually to have accentuated the heterogeneity of the production system. Moreover, very largely owing to rural-urban migration, the supply of labour in Latin America increased much faster during the postwar period than it did in the more developed economies, and a considerable proportion of this growing labour force had no alternative but to create low-productivity jobs for itself. In this way an economic sector has grown up in which the demand for labour depends not on its own capacity for capital accumulation but on the labour surplus in the organised sector of the employment market and on the possibilities of producing and selling anything that will generate an income. I This article is based on a paper with the same title presented by the authors to the Seminar on Employment Problems in Latin America organised by the Working Party on Employment and Unemployment of the Latin American Social Science Council (CLACSO) at La Plata, Argentina, from 5 to 8 March 1975. Technical Assistance Co-ordinator of the ILO's Regional Employment Programme for Latin America and the Caribbean (PREALC). I Director of PREALC. Copyright © International Labour Organisation 1976

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