The employment situation in Latin America and the Caribbean: Labour productivity and distribution issues

Although the economies of Latin America and the Caribbean grew more slowly in 2011 than in 2010, there were some improvements on the employment front. Workers benefited from the region’s satisfactory economic performance in an increasingly complex international setting. The unemployment rate fell from 7.3% in 2010 to 6.7% in 2011 thanks to a halfpercentage- point gain in the urban employment rate. Both rates are at levels that have not been seen for a long time. The proportion of formal jobs with social benefits rose as well, and underemployment declined. The average wage and the minimum wage both increased in real terms, albeit only moderately. Economic performance and the employment situation varied widely among the subregions. The unemployment rate dropped by 0.6 percentage points in South America but 0.4 percentage points in the countries of the northern part of Latin America. In the countries of the Caribbean, the employment rate was up by 0.2 percentage points. The data show that substantial labour market gaps and serious labour-market insertion issues remain. This is especially the case for women and young people, for whom unemployment rates and other labour indicators are still unfavourable. The second part of this report looks at whether the fruits of economic growth and rising productivity have been distributed equitably between workers and companies. Between 2002 and 2008 (the most recent expansionary economic cycle), wages as a percentage of GDP fell in 13 of the 21 countries of the region for which data are available and rose in just 8. This points to redistribution that is unfavourable to workers, which is worrying in a region which already has the most unequal distribution of income in the world. Underlying this trend is the fact that, worldwide, wages have grown less than productivity. Beyond the ethical dimension of this issue, it jeopardizes the social and economic sustainability of growth. For example, one of the root causes of the recent financial crisis was that households in the United States responded to declining wage income by borrowing more to pay for consumption and housing. This turned out to be unsustainable in the long run. Over time, it undermines the labour market’s contribution to the efficient allocation of resources and its distributive function, too, with negative consequences for democratic governance. Among the triggers of this distributive worsening most often cited in the global debate are market deregulation and its impact on financial globalization, technological change that favours capital over labour, and the weakening of labour institutions. What is needed here is a public policy effort to help keep wage increases from lagging behind increases in productivity. Some countries of the region, especially in South America, saw promising developments during the second half of the 2000s in the form of a positive trend reversal in wages as a percentage of GDP. One example is Brazil, where a minimum wage policy tailored to the dynamics of the domestic market is considered to be one of the factors behind an upturn in the wage share of GDP. The region needs to grow more and better. Productivity must grow at a steady pace, to serve as the basis for sustained improvements in the well-being of the populace and to narrow the gap between the economies of Latin America and the Caribbean and the more advanced economies. And inequality must be decreased; this could be achieved by closing the productivity gap between upgraded companies and the many firms whose productivity is low. As set out in this report, the region made some progress between 2002 and 2010, with labour productivity rising at the rate of 1.5% a year. But this progress falls short of that seen in other regions such as Sub-Saharan Africa (2.1%) and, above all, East Asia (8.3%, not counting Japan and the Republic of Korea). Moreover, in many of the countries of the region these gains have not been distributed equitably. Therein lies a dual challenge that must be addressed: continue to increase productivity while enhancing the mechanisms for distributing gains in a way that will encourage investment and boost worker and household income. The Economic Commission for Latin America and the Caribbean (ECLAC) and the International Labour Organization (ILO) estimate that the pace of economic growth in the region will be slightly slower in 2012 than in 2011, in a global economic scenario marked by the cooling of several of the main economic engines and a high degree of uncertainty concerning, above all, prospects for the euro zone. The region is expected to continue to hold up well to this worsening scenario, thanks to policies that leveraged more favourable conditions in the past. This will be felt in the labour markets, as well, so expectations are that unemployment will edge down by as much as two tenths of a decimal point.

Asset productivity at container terminals in Latin America and the Caribbean: 2005-2013

This issue of the FAL Bulletin shows productivity trends at container terminals in Latin America and the Caribbean during the period from 2005 to 2013, comparing them to the trend of earlier years (2000 to 2004). One of the conclusions of the study is that most terminals in the region have improved their quay productivity in recent years, although there are large differences between the three container terminal size categories analysed. However, the author identifies a number of challenges still to be met at the region’s ports.

Latin America: Total factor productivity and its components

This article applies the stochastic-frontier model to examine total factor productivity (tfp) and its components in Latin America between 1960 and 2010. The likelihood-ratio test shows that, for a selection of Latin American countries over the 50 years analysed, the macroeconomic variables of technical inefficiency included in the model generally have a significant effect; and they allow for a better understanding of technical inefficiency throughout the region. The key variables explaining technical inefficiency in the selected countries are public expenditure and the inflation rate; and there is also an inverse relation between technical inefficiency and the extent to which local prices diverge from purchasing power parity.

Does public financial support stimulate innovation and productivity? An impact evaluation

This paper contributes to the empirical literature that evaluates the effects of public financial support to innovation on innovation expenditures, innovation itself and productivity in developing countries. Propensity score matching techniques and data from Innovation Surveys are used to analyse the impacts of public financial support to innovation on Uruguayan firms. The results indicate that there is no crowding-out effect of private innovation investment by public funds and that public financial support in Uruguay seems to increase private innovation expenditures. Financial support also appears to induce increased research and development expenditures and innovative sales, with these effects being greatest for service firms. Public funds do not, however, significantly stimulate private expenditures by firms that would have carried out innovation activities even in the absence of financial support.

A comparative analysis of productivity in Brazilian and Mexican manufacturing industries

This article analyses productivity trends in Brazilian and Mexican manufacturing industries between 1995 and 2009, a period in which international competition intensified sharply. A total of 14 manufacturing industries are considered, using two methods based on: (i) the Leontief (1951) model to measure the consumption of intermediate goods used in production; and (ii) the analysis of total factor productivity (TFP). The studies performed show that manufacturing trends have diverged in the two countries. In Mexico, an increased need for imported goods and services was offset by a reduction in domestic goods and service requirements, and an increase in the TFP of production. In the case of Brazil, the fact that manufactured goods markets are more isolated from foreign trade seems to have contributed to a weak productivity performance.

Productivity, social expenditure and income distribution in Latin America

This paper discusses the role of institutions and structural change in shaping income inequality. It is argued that while social expenditure and direct redistribution are crucial for improving income distribution, sustainable equality requires structural change to create decent jobs. The relative importance of these variables in different countries is analyzed and a typology suggested. It is argued that the most equal countries in the world combine strong institutions in favor of redistribution and knowledge-intensive production structures that sustain growth and employment in the long run. Both institutions and the production structure in Latin America fail to foster equality and this explains its extremely high levels of inequality. The last decade witnessed significant advances in reducing inequality in Latin America, but these advances are threatened by slow productivity growth and weak structural change.

Alternative substrates in the production of lettuce seedlings and their productivity in the field

Based on the hypothesis that alternative substrates should improve the yield of lettuce crops by producing better quality seedlings, the objective of this work was to evaluate the effect of different substrates on the production of seedlings of this species, and their growth in the field. The study was in two stages. The first consisted of the production of lettuce seedlings, and the second assessed their development in the field. Four alternative substrates were tested, obtained by mixing together a sieved vermicompost from which all clumps had been removed, sterilized sand, charred rice husks and basalt powder. The commercial substrate, Plantmax HA®, was also tested. In the first phase, which was conducted in a completely randomised design with four replications, the height, root length, number of leaves, leaf area and dry weight of the seedlings were all evaluated 28 days after sowing. In the second phase, which was carried out in the field in a randomised block design with four replications, the plants were harvested 50 days after transplanting and the head diameter, fresh weight, number of leaves and leaf and stem dry weight were evaluated. The alternative substrates produced larger seedlings in less time than the commercial substrate, resulting in a reduction of 10 days in the total crop cycle. The reduction in the time between sowing and harvesting, together with those aspects relating to sustainability, are the main advantages of the use of alternative substrates, since in the field crop production did not differ between treatments.

Sugarcane productivity correlated with physical-chemical attributes to create soil management zone

The socioeconomic importance of sugar cane in Brazil is unquestionable because it is the raw material for the production of ethanol and sugar. The accurate spatial intervention in the management of the crop, resulting zones of soil management, increases productivity as well as its agricultural yields. The spatial and Person's correlations between sugarcane attributes and physico-chemical attributes of a Typic Tropustalf were studied in the growing season of 2009, in Suzanápolis, State of São Paulo, Brazil (20°28'10'' S lat.; 50°49'20'' W long.), in order to obtain the one that best correlates with agricultural productivity. Thus, the geostatistical grid with 120 sampling points was installed to soil and data collection in a plot of 14.6 ha with second crop sugarcane. Due to their substantial and excellent linear and spatial correlations with the productivity of the sugarcane, the population of plants and the organic matter content of the soil, by evidencing substantial correlations, linear and spatial, with the productivity of sugarcane, were indicators of management zones strongly attached to such productivity.

Soil uses during the sugarcane fallow period: influence on soil chemical and physical properties and on sugarcane productivity

The planting of diversified crops during the sugarcane fallow period can improve the chemical and physical properties and increase the production potential of the soil for the next sugarcane cycle. The primary purpose of this study was to assess the influence of various soil uses during the sugarcane fallow period on soil chemical and physical properties and productivity after the first sugarcane harvest. The experiment was conducted in two areas located in Jaboticabal, São Paulo State, Brazil (21º 14' 05'' S, 48º 17' 09'' W) with two different soil types, namely: an eutroferric Red Latosol (RLe) with high-clay texture (clay content = 680 g kg-1) and an acric Red Latosol (RLa) with clayey texture (clay content = 440 g kg-1). A randomized block design with five replications and four treatments (crop sequences) was used. The crop sequences during the sugarcane fallow period were soybean/millet/soybean, soybean/sunn hemp/soybean, soybean/fallow/soybean, and soybean. Soil use was found not to affect chemical properties and sugarcane productivity of RLe or RLa. The soybean/millet/soybean sequence improved aggregation in the acric Latosol.

Dynamics of the chemical composition and productivity of composts for the cultivation of Agaricus bisporus strains

Two compost formulations based on oat straw (Avena sativa) and brachiaria (Brachiaria sp.) were tested for the cultivation of three Agaricus bisporus strains (ABI-07/06, ABI-05/03, and PB-1). The experimental design was a 2 x 3 factorial scheme (composts x strains) with 6 treatments and 8 repetitions (boxes containing 12 kg of compost). The chemical characterization of the compost (humidity, organic matter, carbon, nitrogen, pH, raw protein, ethereal extract, fibers, ash, cellulose, hemicellulose, and lignin) before and after the cultivation of A. bisporus and the production (basidiomata mass, productivity, and biological efficiency) were evaluated. Data were submitted to variance analysis, and averages were compared by means of the Tukey's test. According to the results obtained, the chemical and production characteristics showed that the best performances for the cultivation of A. bisporus were presented by the compost based on oat and the strain ABI-07/06.

Modalities for soil preparation and gypsum application in ultisol: stem productivity of sugarcane

O trabalho foi conduzido em área de expansão de cana-de-açúcar da Usina Vale do Paraná, no município de Suzanápolis - SP, na região do noroeste paulista. Foi utilizada a variedade de cana RB92-5345, espaçamento de 1,5 m entre linhas, em ARGISSOLO VERMELHO. O trabalho objetivou avaliar a produtividade em cana-planta e 1ª cana-soca e alguns atributos químicos de solo, em função dos métodos de preparo do solo e aplicação ou não de gesso. O delineamento experimental utilizado foi o de blocos ao acaso, com seis tratamentos, fatorial 3x2, e seis repetições. Os tratamentos principais foram preparos de solo com três equipamentos: arado de aivecas, escarificador e grade pesada, e dois tratamentos secundários com aplicação de 1 t ha-1 de gesso e sem gesso. Após cada colheita da cana, o solo foi caracterizado quanto aos indicadores de fertilidade nas camadas de 0,0-0,15; 0,15-0,30 e 0,30-0,45 m. As diferenças dos atributos químicos do solo, devido aos métodos de preparo ocorridas na cana-planta, não perduraram até a colheita da 1ª cana-soca e também não influenciaram na produtividade da cultura. A gessagem proporcionou maiores valores de ATR e produtividade de TCH, para cana-planta e 1ª cana-soca, respectivamente, confirmando a hipótese inicial.

Corn productivity in function of surface application of lime in differents management systems and cultural preparation

The evaluation of technologies employed at the agricultural production system such as crop rotation and soil preparation, both associated with crop-livestock integration, is crucial. Therefore, the aim of the present study was to evaluate the incorporation of lime for three no-tillage systems and cultural managements in system of crop-livestock integration, with emphasis on corn grain yield. The experiment was conducted from January 2003 to April 2005 at Selvíria city, MS, in Dystroferric Red Latosol, clay texture. The experimental design was randomized blocks with split plots consisted of three main treatments, aimed the soil physics conditioning and the incorporation of lime: PD - No-no-tillage; CM - minimum no-tillage, and PC - conventional no-tillage; and of two secondary treatments related to the management: rotation and crop succession, with four replications. Data on agronomic traits of maize were analyzed: plant height, stem diameter, height of the first spike insertion, 100 grains weight and grain yield. The results showed that the maize produced under the system of crop-livestock integration is quite feasible, showing that grain yields are comparable to averages in the region and the different soil physical conditioning and incorporation of lime did not influence the corn yield as well as the cultural managements, rotation and succession, did not affect the maize crop behavior after two years of cultivation.

Large-Scale Water Productivity Assessments with MODIS Images in a Changing Semi-Arid Environment: A Brazilian Case Study

Fundação de Amparo à Pesquisa do Estado de São Paulo (FAPESP)

Relationships between physiological traits and productivity of sugarcane in response to water deficit

The relationships between physiological variables and sugarcane productivity under water deficit conditions were investigated in field studies during 2005 and 2006 in Weslaco, Texas, USA. A total of 78 genotypes and two commercial varieties were studied, one of which was drought-tolerant (TCP93-4245) and the other drought-sensitive (TCP87-3388). All genotypes were subjected to two irrigation regimes: a control well-watered treatment (wet) and a moderate water-deficit stress (dry) treatment for a period of 90 days. Maximum quantum efficiency of photosystem II (F (v)/F (m)), estimated chlorophyll content (SPAD index), leaf temperature (LT), leaf relative water content (RWC) and productivity were measured. The productivity of all genotypes was, on average, affected negatively; however, certain genotypes did not suffer significant reduction. Under water deficit, the productivity of the genotypes was positively and significantly correlated with F (v)/F (m), SPAD index and RWC, while LT had a negative correlation. These findings suggest that genotypes exhibiting traits of high RWC values, high chlorophyll contents and high photosynthetic radiation use efficiency under low moisture availability should be targeted for selection and variety development in programmes aimed at improving sugarcane for drought prone environments.

Applying boron to coconut palm plants: effects on the soil, on the plant nutritional status and on productivity boron to coconut palm trees

Boron, one of the micronutrients frequently found in low levels in tropical soils affects nutrition and productivity of coconut palm trees essentially cultivated in tropical climates. The objective of this research study was to evaluate the effect of boron on the nutritional status of the plant and its productivity when artificially applied to the culture soil. The experiment was carried out in a four year old, artificially irrigated, dwarf coconut palm orchard in Brazil, between January, 2005 and October, 2006. The soil was a red yellow Latosol (B: 0.18 mg dm(-3)). The treatments consisted in the application of five boron dosages: zero, 1, 2, 4, and 6 kg ha(-1). In the field, the treatments were arranged according to a completely randomized block design, with four replications. Boron (borax) dosages were applied in equal halves directly into the soil in the months of January and February of 2005. Boron concentration in the soil and plant and plant productivity were evaluated. The higher palm tree production was associated to levels of 0.6mg dm(-3) of B in the soil and 23.5mg kg(-1) in leaves. Ninety five percent of palm trees maximum production was obtained with the use of a boron dosage of 2,1kg ha(-1).