ABSTRACT
This chapter examines the response of organized labor to official austerity programs during the 1976-1984 period in seven Latin American countries —Argentina, Brazil, Chile, Colombia, Mexico, Peru, and Venezuela —where labor organization historically has been large and important. In the late 1980s, austerity policies express the accumulated effects of the energy price shocks of 1973 and 1979 on prices, the foreign debt crisis that emerged in the early 1980s, and the decline of export markets in the worldwide recession that followed. The total magnitude of austerity has varied among the seven countries examined, from Argentina’s average of 14.3 percent decline for each of the five years of central government spending cuts there to the 6.5 percent figure for the four Chilean years of reductions. With the twin economic crises of 1976 and 1982 and the austerity policies introduced by the Jose Lopez Portillo and Miguel de la Madrid governments, labor was forced to accept falling real wages.
