Institutionalizing Inequality: the Political Origins of Labor Codes in Latin America

When do labor laws protect workers from workplace risks, and when do they serve to institute or insulate the privilege of particular political and economic actors? This paper argues that Latin American labor laws are highly politicized, and have been since their early origins. In the early decades of the twentieth century, the first labor codes were formulated to favor skilled, unionized labor in key economic sectors controlled by business and governmental elites. Non-skilled labor outside of these sectors was largely locked out of the benefits of legislation. Recent efforts at market-oriented reforms, rather than creating a common (albeit weakened) norm for all workers, have only strengthened the privileges given to formal-sector, unionized workers, and widened the gap between these sectors and the unskilled workers in the informal sector. In this paper, I develop a theory of the political dynamics of labor code origins, emphasizing the explanatory role of skilled labor profiles, geographic isolation, and union organization, as well as the concentration of capital and nascent state power in the hands of a limited group of elites. I then illustrate the principal claims of the theory through a historical examination of three cases of labor law formulation: Argentina, Chile, and Peru.