Costo laboral y competitividad en el sector manufacturero de América Latina, 1990-1998

In this paper the reduction of labor costs is examined as a factor that contributes to increase the competitiveness of manufacturing firms. It first reviews non-wage labor costs in the case of workers with indefinite labor contracts, workers with temporary contracts, and those non-registered, with the intention of showing the differences that exist in non-wage labor costs according to the type of contract or the quality of non-registered of the workers, as well as the impact of these differences on the labor costs of each type and on the average cost. It then examines the evolution of labor costs in manufacturing, and how their magnitude varies depending on the deflator that is used, given the change in relative prices that accompanied the first years of the processes of economic and commercial liberalization in the region. It then analyzes the evolution of labor costs in manufacturing according to the type of contract, as well as the changes in the average labor cost in manufacturing that resulted from the strategy of both reducing non-wage labor costs and modifying the structure of employment by type of contract; the impact of exchange rate overvaluation on the average labor cost and competitiveness is described, and estimates the possible evolution of competitiveness in the absence of the exchange overvaluation. Finally, come suggestions seeking labor competitiveness in the countries of the region are made.