The Buenos Aires Subway Strike: A Window on Post-Collapse Labor Politics

April 2, 2014

 

2538Subte workers demonstrate in Buenos Aires in August 2012. Photo by Rene Rojas.

Cristina Fernández de Kirchner, president of Argentina and self-styled national-popular reformer, made quite an impression during her U.S. tour in the fall of 2012. At the UN she denounced IMF-facilitated domination of the global South by central oligarchies; in Cambridge she defended her social policies, not without seizing the chance to ridicule more learned Harvard Kennedy School students. While she wooed Northern progressives with claims of a “decade won” for national sovereignty and popular aspirations, it is worth asking whether workers and the poor in Argentina are similarly dazzled.

There is no question that working class reality has improved since the implosion of neoliberal orthodoxy ten years ago. Unemployment and poverty have declined significantly, welfare programs have been expanded, and industry-wide collective bargaining has been partially reinstituted after the 1990s decentralization of labor relations. But not all is harmonious between unions and the state, as demonstrated by a surprisingly fierce subway strike in August 2012. Offering a glimpse into labor-state relations, the strike’s key features shed light on the prospects for sustaining and deepening the ‘Modelo K’: the reform and recovery program initiated by the president’s late husband and predecessor, neo-Peronist Nestor Kirchner.

Lasting 10 days, the strike turned out to be the longest in the subte’s (Argentina’s underground subway system) history. And though it ended over a year ago, the conflict will likely flare up again whenever the subte locals reinitiate negotiations with the government and Metrovías, the company that was awarded the system’s operating contract since its privatization in the 1990s. Likewise, analysts expect workers in scores of other industries to undertake militant action as contracts expire and unions negotiate inflation-neutralizing wage increases amid a merciless economic downturn and rising fiscal trouble.

Growing labor insurgency represents a tough challenge for Fernández, who is attempting to hold together the ruling alliance that Nestor Kirchner ably crafted after winning the 2003 presidential elections with 22% of the vote. As the global crisis tests the bounds of Argentina’s commodity export-based growth, workers, who along with the urban poor have until now decisively backed the Coalición K—the heterodox neo-Peronist bloc assembled around the Kirchners—will take militant action to defend and expand their fragile post-2002 recovery. In brief, labor insurgency, endorsed at least rhetorically by the reformist regime, will continue to be a widely used tactic for redress by layers of popular sectors that have been activated since the political and economic collapse a decade ago.

The subway conflict was shaped by three main dimensions. First, the strike pitted workers dealing with rising prices and precarious conditions against Roggio, the consortium that controls Metrovías. Second, the conflict was conditioned by the feud between the ruling Kirchnerist government, which has dominated national politics since 2004, and an aspiring right-wing rival that runs Buenos Aires. This dispute reflects, in turn, long-standing intra-state distributional tensions between the federal and provincial levels. Finally, the subte strike was heavily inflected by the historical struggles between democratizing rank-and-file movements and Argentina’s conservative labor bureaucracy. That bureaucracy traces itself back to the creation of classical Peronist corporatism, or the incorporation of the trade union movement within the state. The interaction between these three dimensions presents a microcosm of the complexities of Argentine politics, labor’s role in it, and prospects for deepened reforms within the post-collapse regime.

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After its apex in 1998, Argentine neoliberalism began to unravel. During the sharp decline that lasted through 2002, the Economic Commission on Latin America (ECLA) reports that the economy lost about 20% of its total value while sovereign debt reached $150 billion, roughly one and a half times the country’s GDP. In a country that had achieved an enviable safety net, poverty grew to 50% of the population and unemployment to 25%. Rather than reverse course, the state, dutifully adopting IMF-mandated adjustment, intensified austerity, pushing the country to the brink. Finally, in December 2001, after months of piquetero insurgency, a popular and middle class rebellion shook the capital, supplying the final push that toppled the anti-Peronist liberal alliance elected only two years prior.

The default proclaimed in the final days of 2001 and the devaluation decreed weeks later facilitated two key accomplishments. First, caretaker governments’ measures gave the state the necessary fiscal breathing room to temper adjustment policies and unfreeze savings accounts. Though mobilizations continued, these policies were crucial to restoring basic stability. Second, with imports abruptly restricted, production of tradable commodities was stimulated and import-competing industries boosted, adding new revenues to state coffers.

Building on the heterodoxy of interim president Eduardo Duhalde, Nestor Kirchner managed a prolonged, by Argentine standards, economic turnaround. From 2002 to 2008, the economy grew at Asian-tiger average annual rates of roughly 8%. Given the pressure from mobilized popular sectors, return to growth and profits brought with it some recovery for workers. Besides funding energy and transport subsidies, revenues from the commodity boom, particularly in soy, its derivatives, and minerals, have been redistributed through expanded welfare programs, such as the touted Asignación Universal por Hijo (Universal Benefit for Children) cash transfer. Simultaneously, in an ostensible effort to raise wage floors and bolster the domestic market, the government has backed double-digit yearly wage increases, steadily raised the minimum wage, and vowed to tackle precarious work.

Real wages, however, only recently recovered their pre-crisis levels, and since 2011, workers have faced stiffer resistance than usual from employers and the state, with President Fernández announcing a sintonía fina (fine tuning) of “the model” in 2012. Concurrently, provinces are competing over shrinking federal coffers. After Argentina rebounded from the Great Recession’s fallout, its commodity boom has faltered, investment has plummeted, and industrial production actually shrank in the first half of 2012. Worse still, as Argentina looks to regain access to global credit markets, the administration is repaying hefty growth-indexed obligations. According to left economist Julio Gambina, the 2013 budget allotted 27% of total expenditures for debt amortization, compared to 8% for health and education combined. Moreover, while inflation is nowhere near the three digit levels of the 1980s, by 2007 it had climbed to 26%. Since then, it has remained within the 20-30% range, meaning that within months of a wage agreement, annual price hikes mercilessly erode workers’ purchasing power. The government, meanwhile, though avoiding confronting the financial interests over capital gains levies, taxes swathes of middle earners at unadjusted wage levels. Consequently, yearly bargaining often culminates in disputes, in which unions, even conservative ones, frequently resort to industrial medidas de fuerza, or shows of strength.

In this deteriorating economic panorama, dissident federations held a national demonstration on October 10, 2012, referred to as the “10/10” demonstration, to reject a heralded minimum wage accord and demand higher, inflation-indexed pensions, genuinely universal welfare supports, and the derogation of a gains tax on middle-class wage earners. Encouraged by the massive turnout, union leaders announced a general strike. This strike was the first of the Kirchnerist years, and it shut down the country in December 2012.

Subway workers sought 28% raises, a figure that both their employer and the federal and local governments opposed. While their demand exceeded most wage increases, it reflected inflation and fell within the general range negotiated across industries. The federal government responded all year to such reasonable demands with intransigence, and even vitriol, against unions pushing for more than the hard 18% cap it originally sought to impose. Metrovías in turn rejected state-sanctioned bargaining altogether.

Metrovías, which maintains lucratively cordial, if not outright cozy, relations with the national administration, griped that, absent federal subsidies, wage increases were unfeasible. Going further, it halted investment in parts and repairs, and took dozens of units out of service—all in spite of Roggio’s enviable profits in myriad ventures, including an advertisement leasing bonanza and other rent opportunities in the subway system itself. Workers countered that neither they nor commuters should unfairly shoulder the consequences of the company’s investment complacency and subsidy dependence.

Since 2003, workers in a host of industries have benefitted from state efforts to partially reregulate labor markets and from the consequent resurrection of paritarias, or industry-wide, government-endorsed bargaining sessions. When the annual subway paritaria was scheduled to convene in March of 2013, Metrovías balked. In May, workers shut down the subway system for a day to force Metrovías to the negotiating table. On that occasion, they accepted a fixed, compensatory sum and the promise to hold the paritaria in August. As July came and went, however, their employer showed no willingness to resume talks, choosing instead another round of extortionist service reduction. The growing frustration over the inability to negotiate a wage adjustment compelled subway workers to stage a 24-hour walkout, which they then extended for over a week and a half.

Besides higher wages, workers demanded improved conditions and benefits, tweaks to seniority scales, and importantly, more funds for maintenance and service expansion. Subte workers labor in notoriously lethal conditions; at least one mechanic was fatally electrocuted in each of the past two years. In response to these worksite dangers, workers had staged a four-day strike in 2004, during which they achieved a six-hour day. Over the following two years, they fought successfully to incorporate all informalized labor into the bargaining agreement. In 2013, while employees accepted concessions in many of these areas, they rejected the bilaterally negotiated 23% wage increase acceded to by their official representatives. Significantly, the agreement was not reached in a paritaria, and thus lacks the state sanction required for homologación, or standardization across the industry.

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The subway conflict was conspicuously exacerbated by the growing rivalry between the neo-Peronists heading the federal government and the Republican Proposal (PRO), the new neoliberal party that runs the Buenos Aires federal district. As subsidies have been slashed and cutbacks have set in, the Kirchner administration has been locked in a high-stakes contest with provincial executives over who will bear the political brunt of austerity. In their fight for better pay and conditions, subte workers were forced to navigate ploys by party elites to shift these costs onto each party’s respective rivals.

Traditionally, the capital city of 10 million has been the middle-class and business base of opposition to Peronist corporatism. Following the near disintegration of Peronism’s historic rivals, the Republican Proposal has risen to power in Buenos Aires under the leadership of soccer mogul Mauricio Macri, and aims to build a broad enough base to eventually pose a challenge to Kirchnerist hegemony.

During the 2012 negotiations, these opposing federal and municipal governments sought to exploit the conflict, which they attempted to end by transferring the subway system to municipal management. These opportunistic, if risky, games of hot potato frustrated subte workers’ efforts at negotiation and tested their political loyalties.

President Fernández, realizing that all possible blows to an already thorny consolidation of right-wing opposition work in her favor, portrayed Macri’s administration as inefficient and anti-popular. After acceding to local control of the subte at the start of the year, the federal government also withdrew half of its subsidies along with federal security personnel. Macri responded by threatening a draconian 125% fair hike. Later, when Metrovías pleaded insolvency and appealed to the new municipal transport authority to underwrite concessions, he repudiated the transfer agreement altogether. To wash its hands of the strike, the city government obtained an injunction obligating employer and employees to finalize an agreement. When workers stood firm, Macri claimed Fernández was using the central state’s political and fiscal clout to debilitate potential challengers. Prudently avoiding mention of the strategic alliance between the Kirchner-bureaucrats and Roggio, the Republican Proposal accused the subte locals of following a Kirchnerist destabilization script.

Allegations of selective neo-Peronist heavy handedness are not without merit. With provincial proceeds now dwindling, the federal government has arbitrarily cut subsidies and dispensed emergency funds to preserve loyalties, subdue would-be rivals, and punish challengers. This intra-state power imbalance has deep historical roots in the emergence of Argentina’s post-war populist regime, and is further compounded by extremely uneven development throughout the country. These imbalances have enabled the state to manipulate revenue-sharing schemes in order to sustain ruling coalitions.

Discretionary disbursements have affected not only the anti-populists; estranged Peronist governors, known as the “federal” or “dissident” Peronists, have also been targets of fiscal disciplining. A good example is Daniel Scioli, governor of the Buenos Aires province—a bastion of Peronist clientelism and agro-industrial powerhouse. Though Scioli assumed office as a close ally of Fernández, he gravitated toward conservative Peronism after being rebuffed by the Kirchnerists for entertaining presidential ambitions. As retaliation, the central state delivered far less than was needed a year ago when declining revenue and maturing provincial debt obligations led to a sudden budget shortfall. Tellingly, during a 48 hour stoppage against imminent cuts, workers chanted: “We’re tired of being hostages in the fight between the nation[al government] and Scioli.” Though Scioli has been “rehabilitated” and remains an official ally of Fernández, similar intra-state disputes over austerity implementation complicate labor struggles in Córdoba, Mendoza, and Jujuy.

Throughout the negotiations, dissident unionists that carried on the strike dismissed allegations that their struggle was a ploy to enhance the standing of the national government. Yet, whether they wished or not, partisan meddling in the subte strike tended to hijack the conflict. There is little doubt that workers’ willingness to end the strike was accelerated by political heat reaching Fernández after days of stalemate.

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Even with partisan interests intruding on this basic battle in Argentina’s working class, the subte workers pursued their demands in ways that promote an independent labor agenda. Its uniqueness notwithstanding, the struggle to democratize the subte locals reflects Argentine worker activists’ secular fight to preserve the social power acquired by unions under Perón, yet reproduce and wield it in ways that challenge the crippling authority of bureaucrats installed by the institutionalization of this power.

Two union structures were involved in the conflict: the officially recognized Automotive Tram Workers Union (UTA) and the rebel Subway Workers Trade Association (AGTSyP), commonly known as the metrodelegados (metrostewards). The metrodelegados have waged a decade-long rank-and-file insurgency, winning the majority of committee elections, and displacing UTA delegates in the process. Ironically, though the metrodelegados have won legal recognition, the UTA retains exclusive bargaining rights. Argentine labor law passed under Perón in 1945 codified the corporatist arrangement, thereby prohibiting locals from bargaining independently of sectorial federations. Though while the UTA preserves its bureaucratic clout, the metrodelegados have been adept at maintaining a mobilized base, keeping officials honest to their members through effective direct action.

The role of rank-and-file insurgency within Argentine labor history is enormously complex. Challenges to labor’s officialdom emanated from the installation of corporatist unions and the subsequent coup in 1955 that proscribed Peronism, to which federations had been affiliated. Labor politics were subsequently shaped by Guillermo O’Donnell’s notion of the “impossible game,” whereby stability required integrating Peronist unions. Yet their re-incorporation inevitably triggered military intervention backed by business elites. Three currents emerged: a hardline faction that intransigently fought for a return to Peronist rule and against any erosion of labor’s gains; a competing current of anti-Peronists, be they in civilian or authoritarian guise; a final force comprised of radicals who not only fought for full democratic restoration, but also organized the rank and file to push beyond corporatism and toward worker control and socialism.

These tendencies have periodically realigned, and boundaries between them have been fluid. With Peronists in power, the first two have come together and, led by the most conservative elements—many of whom collaborated with repressive apparatuses during the 1976-1983 dictatorship and its volatile prologue—have even acceded to anti-labor policies such as those implemented by Ménem’s neoliberal administration. Excessive liberalization, however, has pushed orthodox Peronists into tactical alliances with leftist insurgents, as when truckers boss Hugo Moyano broke from Argentina’s largest union, the General Confederation of Labor (CGT) in 1995 to lead national stoppages with the dissident Argentine Workers’ Central Union (CTA).

Opposing orientations toward Kirchnerist policies have further confounded labor politics. The dissident CTA, after years of ambivalent support for the Kirchner model, has split into decidedly pro- and anti-Kirchner factions. Similarly, following disputed internal elections, the official CGT fractured in June 2012 when the teamsters and their allies defected and once more established a parallel CGT. Curiously, both the metrodelegados and the official UTA bureaucrats are allied to the regime—the metrodelegados affiliated with the pro-Kirchner CTA, and the official UTA with the official CGT. The 10/10 labor mobilization, in contrast, was attended by Moyano’s CGT rebels yet was rejected by the CTA faction allied with the Kirchner-Peronists.

This byzantine field in which rank-and-file activists operate is not merely confusing; intra-union politics are always hostile and often dangerous. Competition and the threat of losing privileges, union resources, and shady ventures, all promote violence against insurgents. A recent demonstration of mafia-like behavior toward dissidents occurred three years ago when members of the Ferroviaria Union (UF), the orthodox Peronist rail workers, attacked a workers’ picket organized by radical left militants. The assault was planned by powerful UF head José Pedraza and executed by a patota: an emblematic gang deployed against rank-and-file challenges. During the assault, two activists were shot—one of them, fatally. In today’s Argentina, labor officials aligned with the reformist state replicate tactics that bureaucrats tied to death squads employed during the “dirty war”—tactics that eliminated thousands of rank-and-file militants.

The UF’s deadly attack exposed the lucrative dealings that labor bureaucrats gain through collusion with employers and policymakers. Indeed, UF officials, besides protecting their own stakes in irregular work arrangements, were advancing the interests of Metrovías itself, which was awarded management of restructured privatized highways. Significantly, UF’s primary aim in attacking dissidents was to push back against the demands by tercerizados (outsourced workers) to be incorporated into the union. Given officialdom’s leading role in enforcing complete flexibility of the workforce, Pedraza was immediately offered unequivocal support by the vice-minister of labor.

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The subte strike was a manifestation of a mass rejection of 1990s-style neoliberalism and of the re-activation of popular sectors impelled by the 2001-2002 crisis. Though mobilizations have waned in intervening years, protest remains a legitimate and oft-resorted-to tactic by Argentina’s powerless. Outrage at the deadly December 2001 repression and the murder of activists in 2003, along with constant attacks from increasingly aggressive right-wing forces, both constrain the government’s range of maneuver. Since Kirchner-Peronists are forced to respond to popular insurgency to stabilize the regime, and therefore continue to depend on poor- and working-class support, organized groups understand that the state delivers, even if partially and grudgingly, when pressured.

Amid stalled economic reactivation and attempts to roll back labor’s fragile gains, unions and rank and filers will continue employing disruptive tactics that have served them well since the return to industry-wide bargaining. Their actions will not only be subject to the ambivalent relationship between the state and popular mobilization, but will also be shaped by the intra-state and intra-labor conflicts described above.

Paradoxically, these complicating factors offer opportunities for labor insurgents. When rank-and-file activists are able to weather assaults by coercive and collaborationist leaderships, they can take advantage of openings for industrial action facilitated by partisan and union rivalries. Fortunately, in post-collapse Argentina, there is no shortage of union members ready to fuel rebellion.

 


 

Rene Rojas is a Sociology PhD candidate at New York University. His research is on the labor regime in post-collapse Argentine.

 


 

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