Chile’s economy has been transformed over the three decades that have elapsed since the 1973 coup that imposed a bloody end to the country’s experiment in democratic socialism. Under the dictatorship of General Augusto Pinochet, the model of “import-substitution industrialization” that had characterized Chilean economic life for nearly half a century gave way to a radical experiment that would be emulated throughout the region during the 1990s and beyond. Whereas production had long been geared toward satisfying local demand, from the mid 1970s onward the focus shifted to export markets. To this day, in Chile as elsewhere in Latin America, “comparative advantage” trumps social objectives in determining the relative weight of different sectors of the economy.
The much vaunted “Chilean miracle”—a reference to Chile’s having maintained rates of economic growth that surpass those of virtually all of the region since the late 1980s—thus centers on successful exploitation of resources that the country possesses in abundance and for which there is demand abroad. Chile is a quintessential example of a natural resource-based economy: Copper remains central, as before, but the leading edge of the national economy consists of the production for export of such goods as fresh fruits and vegetables, wines, forestry products and seafood. If it is in these areas that wealth has been produced—though frequently not well distributed—it is no surprise that it is also here that most jobs have been created for the generation of Chileans born since the onset of military rule.
This article explores the fortunes of workers in a typical example of such an industry. I focus on fisheries, particularly in the Lakes region along the south-central coast, where salmon farming has assumed increasing prominence in recent years, and where the possibilities and contradictions of the prevailing development model emerge in particularly stark relief.
Chile’s fishing industry experienced a dramatic boom during the Pinochet period. Encouraged by the new export-oriented model and by specific policy inducements, scores of savvy capitalists entered the fresh and frozen seafood sector and began shipping fish and shellfish to consumers in East Asia, Western Europe and North America. Others invested in the fishmeal industry, renovating existing production units or building new plants. As a result, between the mid 1970s and the mid 1990s, the number of fish processing plants in the country grew from about 75 to well over 400, with seafood exports rising from negligible levels to account for 12% of Chilean export earnings. As processing plants sprung up from Arica in the north to Punta Arenas in the south, tens of thousands of people became clam shuckers, sorters, fish headers and gutters and, most of all, fishermen. One recent investigation found that the Chilean fishing sector directly provides about 200,000 jobs.
The seafood industry in the Lakes region developed in three phases. During an initial “boom” period (circa 1975-1987), draconian labor market policies, a weak economy and a repressive state combined to create a situation in which processing plant owners could take extreme advantage of their workers. Laborers in the processing plants received miserably low wages, toiled under conditions reminiscent of the industrial revolution, and were hired and fired at will, depending on their employers’ needs and the availability of raw material. Many firm owners in the processing sector earned huge profits, but they shared little with workers in the factories. Independent fishermen fared better.
Who were the workers that filled the seafood processing and exporting enterprises in the 1970s and 1980s? A large group came from the traditional agriculture sector, which had experienced two major upheavals over the preceding 20 years. The first upheaval was the radical land reform program implemented by the Frei and Allende governments in the 1960s and early 1970s. During land reform, most of the country’s big agricultural estates were expropriated, which “freed” a large number of landless agricultural laborers from the land. Those who did not receive land moved into nearby villages and towns to become part of the agricultural proletariat that eventually found its way into the fishing sector. The Pinochet government reversed the land reform, however, and dismantled the agricultural support systems that had accompanied it on the grounds that these policies were inefficient. In this second major upheaval, the withdrawal of government support relegated small-scale farmers to subsistence farming or other economic activities such as fishing.
Children of the urban proletariat represented the second major source of new seafood sector workers. The majority came from the urban working class and from agriculture, and a large fraction were women. For this group, the processing plants offered a relatively attractive new source of employment. The plants—pesqueras—offered higher pay and more respect than their main alternative, domestic service, and increased women’s sense of autonomy from husbands, fathers and boyfriends. But while women clearly enjoyed some benefits from going to work in a seafood plant, they also paid a high price for increased economic independence and “freedom.” Alongside a certain degree of freedom, autonomy and respect afforded by their jobs, adding a “second shift” of paid labor brought new pressures, stresses, and physical and emotional exhaustion into their lives.
Throughout the early years of the boom, the biggest winners were the owners of the seafood processing plants. Some compared the experience to “ganando la Polla Gol,” or winning the lottery—and undoubtedly owners enjoyed the lion’s share of the income generated by the industry. By contrast, wages of workers in the processing plants did not reflect overall industry prosperity. As late as 1987, the wage for a non-skilled worker was still only about $85 dollars a month including overtime. Even employers readily admitted the insufficiency of their workers’ wages. Plant owners frequently told me that “manual labor doesn’t cost a thing in Chile.” Wages were low for a number of reasons. The most obvious was the fact that workers had no bargaining power: State repression of labor unions following the 1973 coup was severe, and workers were afraid to organize in such a hostile climate. “There used to be a union here, but the plant owner threw the union organizer out and the union disappeared,” confided one worker from a plant on the island of Chiloé. “[N]obody complains now because we would be fired.”
In such circumstances, almost no one in the sector dared organize. Indeed, as late as 1997, union organizers in the seafood processing sector complained that it was hard to get workers to fight for their rights. As one lamented, “We’ve got 17 years of dictatorship weighing on us. The people are afraid and they don’t want to say anything about their conditions.”
Even if more workers had been willing to run the risk of organizing, there were institutional obstacles to doing so. The labor law put in place by the Pinochet government effectively discouraged unionization. The 1979 Labor Law allowed four different types of unions: firm-level unions, inter-firm unions, unions of independent workers and unions of construction workers. Of these, however, only firm-level unions could negotiate legally on their members’ behalf. Sector-wide collective bargaining was expressly prohibited, and the law excluded certain groups—most importantly, temporary workers—from collective bargaining altogether. This was crucial, since until the mid 1980s, temporary workers represented a large proportion of the seafood processing workforce.
In an effort to support those who owned businesses, the Pinochet government had eliminated most of the financial disincentives previously associated with hiring temporary workers. The maximum length of a temporary contract was extended from six months to two years, and employers were allowed to dismiss workers in some cases without statement of cause or appeal—another aspect of the prized “labor market flexibility.” All too frequently, when the time came that the firm was legally obliged to classify a worker as permanent, the worker would be fired, only to be rehired by the same plant a month later. The result of the preference for temporary contracts was that an extreme level of job instability and insecurity prevailed throughout the Pinochet years.
In fact, for a short period, the new labor laws permitted employers to pay their workers only for the hours they worked, which also served to hold down workers’ wages. Under the new regime, which prioritized “labor market flexibility,” employers could shift the risk of bad weather or a bad catch onto workers by calling on them when they needed them, and sending them home without pay when they did not.
Aside from the low pay and job insecurity, working conditions in the seafood processing plants were harsh. The first thing one notices when one walks into a seafood processing plant—other than the smell—is the temperature of the air. Low temperatures are vital for keeping the fish and shellfish from decaying too fast, and most phases of the production process must be done in what feels like a giant refrigerator. Part of the work involves frequent contact with cold running water, used to wash off blood and waste, and to clean the raw material. This leads to physical discomforts and in some cases, serious health problems, such as eye trouble or kidney disease.
In most seafood processing plants, workers stand on their feet all day carrying out repetitive motions, usually at breakneck speed. As researcher Priscilla Délano notes, in those seafood processing plants that have semi-automated production lines, “women [have] to perform different tasks at [such] great speed...they can hardly blink.” “We don’t even feel our feet until we get home,” one seafood worker lamented, “and then they are completely swollen.” Some workers complain that their backs start hurting before the week is halfway over. This is especially true for men whose jobs require heavy lifting. Part of the monitoring takes place through the piece rate system, which rewards workers for the number of kilos, cans, or fillets of fish and shellfish they process. Workers typically stand in long lines or around large tables, with an overseer—a capataz—standing by and watching them closely. In the event that they are found to be “too slow,” they are publicly admonished—a practice many find humiliating.
The official schedule in the industry is a six-day, 48 hour workweek. During the 1970s and most of the 1980s, however, most people worked more when there was work, either because they had to in order to make ends meet, or because they feared losing their jobs if they didn’t. Twelve-hour days were not uncommon, and in peak seasons most production managers insisted that all the raw material be processed before their workers went home, since failure to quickly process these highly perishable goods could lead to economic losses.
Workers who did not want to stay were often pressured to do so, under threat of losing their jobs. “At night they would come looking for me to come back to the plant, after I had already worked for ten hours,” said one 22-year-old worker. “I only went back to work to avoid problems with the bosses, not for the money. If you didn’t do them the ‘favor,’ they would treat you badly.”
Those who harvested the raw material for the industry—that is, fishermen and shellfishermen—fared considerably better than processing plant workers, because of the relations of production that existed in this subsector. Fishermen and shellfishermen were independent laborers who merely sold their catch to the processing plants; this meant that their incomes and working conditions were determined largely by the availability of resources and the market for raw material supplies rather than by work contracts at the processing plants. Initially, when wild fishery stocks remained abundant and competition for raw material among processing plants was fierce, these harvesters were able to capture a substantial portion of the profits and thus bolster their incomes. Their working conditions were comparatively good because supplies of fish and shellfish remained abundant.
In the latter part of the 1980s, labor’s fortunes in the seafood processing plants started to change for the better, and the second phase of the fisheries boom began to unfold. Between 1988 and 1992, real wages for plant workers rose 55%. Other working conditions also improved as workers gained additional legal rights; employers became more reluctant to flagrantly violate labor laws; and certain unjust employment practices—like intimidating workers into working overtime—became less common. Tight labor markets gave workers more bargaining power vis-à-vis their employers. A firm that wanted to attract and retain good workers had to offer better wages and working conditions.
Meanwhile, emboldened by the new political space that opened up as the country neared its national plebiscite on whether General Pinochet should continue as head of state, seafood processing workers waged—and won—critical battles to form labor unions. As late as 1987, workers had only managed to organize themselves in two plants in the region; by 1991, however, workers had organized unions in 14 plants, and were in the process of organizing several more.
Finally, the Aylwin government in 1991 effected small changes in the country’s labor laws that contributed to better wages and working conditions. Although the central orientation of the labor market regime established by Pinochet was left intact—including its emphasis on “flexibility”—the Aylwin government did reinsert a modicum of worker protection against arbitrary dismissals into the law. Moreover, Aylwin increased the real minimum wage by nearly 10% within a few weeks of assuming office.
But above all, the growth of the economy and the development of natural resource-based production powerfully affected the demand for labor. Nationwide, employment rose almost 50% between 1985 and 1996, from 3.5 million workers to 5.3 million workers. Over this same period, agriculture and fishing absorbed some 230,000 new workers; industry, another 373,600 workers; commerce, 279,500 workers; and services, 380,000 workers. In 1992, national unemployment hit its lowest rate since the early 1970s, a remarkable 4.4%.
Yet at this very moment, two unanticipated problems appeared, ushering in the third phase of the seafood sector’s development. One was a crisis in international markets, which exerted downward pressure on seafood prices. The second was resource degradation. Virtually uncontrolled exploitation of the natural resource base for over a decade had seriously reduced the stocks of the region’s key commercial species. This meant falling catches for fishermen and rising costs for harvesters and processors alike. As the earnings of both groups fell, many fishermen abandoned the sector, and numerous processing plants went out of business. In the region around Chiloé, where I conducted field work during the 1990s, thousands of workers would have become unemployed if not for the fact that the wild fisheries sector happened to be located precisely where another new industry—salmon aquaculture—was just getting underway.
If the growth of the wild fisheries sector had been impressive, the growth of the salmon industry was dizzying. In the mid 1980s, hardly any Chileans had heard of salmon farming. Yet by 2001, Chile’s farmed salmon and trout exports accounted for over 5% of the country’s export earnings. The vast majority of salmon came from the Lakes region, where a propitious combination of geographical features—deep glacial lakes, clean and protected inland seas, and perfect water temperatures—created some of the best salmon farming conditions anywhere in the world. As more and more firms began raising and processing salmon, the demand for labor rose. Workers who had been employed in plants dedicated to processing wild fish and shellfish easily made the switch to processing salmon and trout.
To a large degree, the salmon industry has provided a more stable employment alternative to the wild fisheries, at least for processing plant workers and those hired to work in the region’s new salmon farms. Because they grow their own fish, salmon farms are not subject to the sort of resource limitations that wild fisheries are, and thus have the potential to be more sustainable, at least in terms of resource supply. But as we look to the 21st century, the future of even these workers has begun to look less secure and promising. The salmon industry turns out to have vulnerabilities of its own due to a multifaceted set of biological, structural and conjunctural pressures.
One source of threat to the industry is environmental. The development of aquaculture effectively loosened one environmental constraint on the fisheries sector (that of limited resource supply), but it simultaneously exposed the industry to another, namely, the problem of infectious diseases, organic “pollution” and other environmental risks associated with large scale industrial monoculture. Although the industry has yet to be devastated by ecosystemic changes, it has suffered acute losses due to diseases and algae blooms. Inevitably the future will bring new challenges and threats of this sort, calling into question the long-term security of Chile’s aquaculture sector workers.
A second, and more obvious, threat derives from the remarkable growth that salmon aquaculture has experienced globally over the last ten years—a trend to which the Chilean salmon industry has contributed heavily. As Chilean salmon producers doubled, tripled and then quadrupled their production, their exports helped to create a serious glut on world markets—a glut that has driven down prices and increased competition worldwide. Up until the late 1980s, most of the world’s salmon supply came from wild salmon fisheries, located in Alaska, the Pacific Northwest, Canada and Japan. Salmon supplies were limited by what could be caught during fishing season, which helped give salmon its luxury status and its correspondingly high price. But during the 1980s and 1990s, firms in Norway and Scotland, and later Chile and the United States, achieved enormous success with salmon farming and managed to raise their output dramatically. This massive increase in farmed salmon production created a significant glut in world salmon markets, with negative implications for everyone involved.
In response to these pressures, Chilean salmon farmers began to change key aspects of their operations in an effort to restore profits. Out of necessity, they transformed themselves into aggressive global marketers, traveling far and wide to seek out potential buyers. The industry also tried to stimulate demand within Chile, by increasing salmon shipments to Santiago and other national markets. Firms also made a major effort to increase the value they added to their products by selling processed salmon fillets, sushi cuts and hand-processed smoked salmon to high end, niche markets. Reflecting the success of this strategy, these “value added” products rose from a mere 5% of salmon exports in 1990 to 39% in 1996 and have grown steadily since.
Yet these industrial restructuring processes have not brought many positive changes for salmon-sector workers. In the processing plants, managers have sought to increase productivity by relying more heavily on piece rate systems, which tie worker productivity directly to earnings. By paying a worker for each salmon fillet processed, the piece rate system encourages workers to exert themselves more. Efforts to increase the productivity of labor by paying piece rates and/or simply increasing the pace of work have had mixed effects on workers. Paying workers by the piece has enabled some workers to significantly raise their take-home pay by working harder. Yet these workers have paid dearly with their bodies. As one processing plant worker told me, “You’re earning money against your body, but after a while, your body collapses.” In industries such as this one, which rely on assembly line production, increasing the work pace invariably has a negative impact on worker health and safety. Working with sharp knives at increasingly fast speeds has only made an already dangerous job even more dangerous.
The greater sensitivity to production costs is one of the reasons why wages in the seafood processing sector have leveled off. Another has to do with the loosening of the labor market since 1998, which has reduced the bargaining power of workers. Compared to a period of small but significant improvements at the beginning of the decade, workers are again afraid to fight for their rights and organize.
Only skilled workers, for whom the labor market remains fairly tight, seem to have escaped the costs of the industry’s restructuring, and may even have received a boost as the sector has grown in size and international stature. But the size of this group is small, and promises to remain so in the future. Moreover, even as many salmon companies move toward staffing their operations with more highly skilled workers, the farms themselves do not employ that many people. The bulk of the sector’s employment is in fish processing, where unskilled workers outnumber their skilled counterparts by seven-to-one.
The last 25 years have brought significant change for the workers in Chile’s new export-oriented seafood industry. For most workers, movement into the seafood sector was made not by choice, but by necessity. This does not mean that their situations did not improve with this occupational shift, for in some cases they did, and quite substantially. Their fortunes in the industry rose or fell depending on the political economy and ecology of fishing, seafood processing, and later, salmon farming. The distinct experiences of different groups of workers were conditioned by their particular location in the industry, the ecological health of the fisheries, and conditions in the wild seafood and salmon aquaculture industries.
Chile’s “successful” integration into the new global economy on the basis of its natural resources has certainly had advantages for many entrepreneurs and workers, but it has also generated important new sources of vulnerability, deriving from exposure to world market competition, rapid price and market changes, and uncontrollable and unpredictable environmental threats. As in all countries in which labor is fully exposed to the market and cannot depend on the state for protection against such “natural” industry swings, we can expect workers to bear the brunt of these risks and vulnerabilities.
The radical changes the Pinochet government made in Chile’s labor market regime powerfully influenced the way industry workers experienced—and will continue to experience—these new local/global relations. Labor market flexibility, the central organizing principle of this new regulatory framework, has been highly detrimental to seafood processing workers. It has allowed employers to impose the rhythms, and shift the risk of nature-based production on to processing plant workers.
Other elements of the dictatorship’s labor legislation have made it far more difficult for workers to organize labor unions than in the past, and thus to advance their own interests. Although the situation of organized labor has improved since the transition to formal democracy, Chile’s successive civilian governments have not reversed the laws that gave employers a high degree of flexibility. Perhaps even more importantly, just as the neoliberal architects of this legislation envisioned, neither the state nor labor unions are in a position to protect workers from changes in global industry conditions.
ABOUT THE AUTHOR
Rachel Schurman teaches sociology at the University of Illinois at Urbana. She thanks Eric Hershberg for his help in the preparation of this article. A different version of the article will appear in Peter Winn, ed., Victims of the Chilean Miracle: Workers and Neoliberalism in the Pinochet Era, Duke University Press, 2004.
1. Ministerio de Agricultura, Servicio Agrícola y Ganadero, Anuario Estadístico de Pesca 1976 (Santiago: Ministerio de Agricultura, 1976); Servicio Nacional de Pesca (hereafter known as SERNAPESCA), Anuario Estadístico de Pesca 1995 (Santiago: Republica de Chile, 1996), p. 4. According to SERNAPESCA, there were 433 processing plants in Chile in 1995.
2. Employment in the fish processing industry rose from 6,400 workers in 1975 to 17,400 in 1990, to 24,700 in 1995. By 1997, according to the Encuesta Nacional de la Industria Manufacturera, seafood processing employment increased to 32,000 workers. The former figures include fishmeal and fish oil processing plants, and come from the Anuarios de Industrias Manufactureras, Instituto Nacional de Estadísticas (hereafter referred to as INE): Santiago, 1975, 1990, 1995. Data for 1997 are reported in Celina Carrasco, et al. “Cultivando el Mar: Para La Calidad de las Condiciones de Trabajo,” Cuaderno de Investigación No. 13 (Organización Internacional del Trabajo, December 2000), p. 29. The number of artisanal fishermen, which is the largest group of fishermen, increased from about 17,000 in 1975 to just under 39,000 in 1995. See Eduardo Bitran, “Desarrollo y Perspectivas del Sector Pesquero en Chile,” Documento de Trabajo No. 7, Centro de Estudios de Desarrollo, October 1983, and SERNAPESCA, Anuario Estadístico de Pesca 1995, p. 2. I use the gendered term “fishermen” throughout this article because the vast majority of the people who work at sea are male.
3. Beatriz Corbo, “Cuotas Pesqueras,” El Mercurio, July 12, 1999, p. A-2.
4. This discussion is based on my own interviews, as well as upon Priscilla Délano’s unpublished doctoral dissertation, Women and Work in Chile: A Case Study of the Fish Processing Industry on the Island of Chiloé, University of Cambridge, 1993. See also Priscilla Délano and David Lehmann, “Women Workers in Labor Intensive Factories: The Case of Chile’s Fishing Industry,” The European Journal of Development Research, Vol. 5, No. 2 (1993), pp. 43-67.
5. Unfortunately, it is difficult to get historical data on wages in the seafood processing industry, since firm owners are unwilling to share financial information in this highly competitive industry. These figures come from a very large plant in the region, with over 600 workers.
6. Personal interviews in the seafood processing industry, 1990 and 1991.
7. Interview with a member of the Women’s Department of the Federación de Sindicatos de Trabajadores de Industrias Pesqueras, Puerto Montt, April 4, 1997.
8. Jaime Ruíz-Tagle, El Sindicalismo Chileno Después del Plan Laboral, (Santiago: Programa de Economía del Trabajo, 1985); Pilar Romaguera, Cristian Echevarría, and Pablo González , “Chile,” Chapter 3 in Gustavo Márquez, ed., Reforming the Labor Market in a Liberalized Economy, (Washington, D.C.: Johns Hopkins University Press, 1995).
9. In 1981, this law was modified so that temporary contracts could only be renewed once; if renewed a second time, they were automatically converted into indefinite contracts, meaning that the worker would become a “permanent” rather than “temporary” employee; see Ruíz-Tagle, El Sindicalismo Chileno Después del Plan Laboral, p. 64. However, even with this more labor-friendly reform, in practice a worker could be hired under temporary contract for up to two years.
10. Personal interviews with workers in the seafood processing industry.
11. For a description and critique of labor market flexibility, see Fernando Ignacio Leíva and Rafael Agacino, Mercado de Trabajo Flexible, Pobreza y Desintegración Social en Chile, 1990-1994 (Santiago: Universidad Arcis, 1994). Labor market flexibility is also discussed by Ruíz-Tagle, El Sindicalismo Chileno Después del Plan Laboral, and Romaguera et al., “Chile.”
12. Priscilla Délano A., “Women and Work in Chile.” 1993.
13. Priscilla Délano A., “Women and Work in Chile.” 1993.
14. Personal interview in the seafood processing sector, Puerto Montt, 1991.
15. These figures were calculated on the basis of data provided in INE’s Anuario de Industrias Manufactureras (various years), and were price deflated using the Central Bank’s consumer price index. These estimates are based on wages per worker. Thus, if average hours per worker have grown, the figures will be biased upward.
16. These observations are based on interviews in the seafood processing industry, April 1994.
17. Personal interviews with seafood processing workers, 1991.
18. See Leíva and Agacino, Mercado de Trabajo Flexible, Pobreza y Desintegración Social en Chile; Alejandra Mizala and Pilar Romaguera, “Flexibilidad del Mercado de Trabajo: El Impacto del Ajuste y Los Requisitos del Crecimiento Económico,” Colección Estudios CIEPLAN No. 43 Número Especial (Sept. 1996) pp. 15-48.
19. Data came from the INE, and represent the third trimester of each year. Reprinted in PET, Informe Anual, 1997-1998, Cuadro 7, (Santiago: PET, 1998).
20. The best early history of the salmon industry in Chile is Ricardo Méndez and Clara Munita O., La Salmonicultura en Chile (Santiago: Fundación Chile, 1989).
21. This discussion and the quotations that follow are based on interviews conducted with approximately a dozen salmon farm managers in Puerto Montt during 1994 and 1997.
22. See “Salmonideos Generaron el 30.3% de los Ingresos de las Exportaciones Pesqueras,” in Salmonoticias, official publication of the salmon industry of Chile, Asociación de Productores de Salmón y Trucha de Chile (January 1997), p. 13.
23. See the discussion in Estrella Díaz A., “Mejoramiento de Estandares Laborales, especially pp. 33-39.