Life in Debt. Clara Han
revenue from increasing the impuesto de valor agregado, or value added tax. The 1993 Tax Agreement made between the Concertación parties and the right-wing Renovación Nacional Party stipulated a fixed ceiling on social spending, so that the growth of budgetary spending for social policies would by law always be lower than the growth of the gross domestic product (Fazio 1996). In terms of real pesos, public spending rose progressively during the transition. Notably, when measured as a percentage of the GDP, social spending actually decreased in relation to economic growth during the transition.2
What have been the consequences of the “growth with equity” principle for the poor? Notably, poverty, as measured by the monthly income required to satisfy basic necessities, has declined, from 45 percent of the population in 1988 to 13.7 percent in 2006, while indigence, as measured by the monthly income required to satisfy basic alimentation, has decreased from 12.9 percent to 3.2 percent (Raczynski 2008).3 With national statistics showing a significant decrease in poverty, and after official acknowledgments of human rights violations and the institution of constitutional reforms, President Ricardo Lagos declared on a state visit to Australia in 2005 that the “transition” had concluded: “Twenty years ago, there was a national accord/agreement to achieve a more democratic country, 15 years ago the democratic governments started and now we can say that the Chilean transition has concluded” (quoted in Agencias 2005).
Yet in poor urban neighborhoods, this now-paid social debt continues to generate questions about the “actual justice” of the transition. That is, the justice that is empirically accounted for through poverty programs and statistics on poverty. In the everyday workings of poverty programs, the criteria to gain entrance into such programs, and social workers' visions of the poor, obscure the dynamics of pervasive economic precariousness. Experiences of poverty are shaped by the irregularity of cash flow produced by temporary and unstable forms of labor. Yet, in these programs, women contend with an assumption that recipients of state aid embody a certain kind of moral subject, as well as contend with a reading of material objects as denoting economic status abstracted from concrete circumstances. Let me turn to Valentina and Pato.
CRITICAL MOMENTS
Valentina was thirty-seven years old and Pato thirty-eight years old when I met them in 2004. Valentina stopped me outside the primary care center, where she sold used clothes strung from a rope between the trees. She wanted to sell me a pair of jeans. We ended up chatting. Her husband, Pato, was a taxi driver. The week that I met her, they were late on their dividend for their house and had withdrawn a cash advance from Líder Supermarket to buy groceries. She explained the situation to me: “It gives me despair, but one doesn't walk around crying for pity.” She resorted to selling off their clothes. Valentina had recently been diagnosed with depression and was receiving free fluoxetine and group therapy in the local primary care center. (This program is discussed in chapter 6.) I asked if I could interview her, and she invited me to her home for tea.
When I arrived at their house, Valentina came out to greet me. Through the front window, I could see her husband turning off the TV. The silver fifty-inch Panasonic TV extended from the living room's corner to its center. It rested on a table, under which a large silver Sony sound system flashed its red and green lights. Two overstuffed tan armchairs sat close to the TV. Valentina guided me past the living area to the dining table, where teacups were set out. While Valentina prepared tea in the kitchen, I asked Pato about his work history. Pato had been a taxi driver for the past two years. Fifteen years earlier, however, he had started working at the Machasa textile factory.4 During that time, he said, he was earning well. His monthly income was 250,000 pesos (USD 410). Machasa provided the basis for this house, he explained, because it was a “time of stable work…. The company treated the workers well. There were benefits to working there, respect for the worker. Machasa was a Chilean company, but it went bankrupt.”
After eight years of employment, Pato moved to Sodimac, a manufacturer of transformers and lighting fixtures. There, he worked in a parttime trucking job, transporting goods from warehouse to stores. His starting monthly income was 60,000 pesos (USD 100). “From 250,000 to 60,000, just like that,” he told me. “It was virtually impossible to live during this time. We were paying dividends [on the house] of 25,000, then paying for school for the children, and the rest of the bills. No alcance para comer.” (It isn't enough to eat.)
Then, after six years of working for Sodimac, Pato renounced his work. The company had hired an external subcontractor to find workers, “un contratista [subcontractor] who receives his income for each worker that he brings to work, 5,000 pesos per worker, but pays the worker the minimum 115,000 pesos. Two months before I left work, the contratista came up to me and asked me to work with him, but for half the income, and it wasn't acceptable to me [no me convenía], so I left.” He told me that work is like this “everywhere now. You have to work for a contratista, who can tell you to sign a contract for two months, then two months more, afterward another month. And if you work for a while, you pass to an indefinite contract without signing anything, but when they throw you out, they pay a smaller indemnity, because all of those months when you had a definite contract do not count. The system now is like this. El mano de obra [manual labor] now is very cheap.”
Pato analyzed how labor laws generated new labor hierarchies and everyday instability. As an outcome of Pinochet's Labor Plan, as historian Peter Winn discusses, regimes of flexible labor continue to exert one of the most detrimental effects on the livelihoods of the poor (Winn 2004). Consisting of a series of decree laws designed primarily by Pinochet's labor minister, José Piñera, the Labor Plan worked in three broad directions.5 First, Decree Law 2.200 (1979) and Law 18.018 institutionalized new forms of unstable labor by giving the employer the power to terminate contracts with thirty days' notice, without justification, and to unilaterally change the nature of the work or the actual work site (Silva 2007; Winn 2004). Second, Decree Law 16.757 (1979) amplified the role and scope of subcontracting to all areas of a company's labor, allowing companies to subcontract out labor inherent to principal production, such as equipment maintenance and repair (Silva 2007, 4). Third, Decree Laws 2.758 (1979) and 3.648 (1981) severely restricted collective bargaining by allowing companies to replace striking workers after fifty-nine days and by abolishing specialized labor courts (Winn 2004).
Starting with the Aylwin administration, successive Concertación governments attempted to reform the Labor Code. As sociologist Volker Frank has pointed out, however, the Labor Code has produced “an ever increasing tendency to substitute permanent contract workers with temporary and subcontracted labor, a lowering of income for the total labor force, a decrease in fixed individual incomes for Chile's workers, and an increase in incomes tied to productivity gains, bonuses, and other ‘incentives’” (Frank 2004, 74; see also Henríquez and Riquelme 2006). For historian Gabriel Salazar, this “logic of employment,” in which “no work contract should be permanent and every worker, according to business interests, is dispensable,” has become “the third vertex of the ‘social pact’ of neoliberalism” (Salazar Vergara 2005, 88).
Indeed, by 2005, the Decree Laws' legacy in the current Labor Code produced an extremely precarious labor situation in which more than 93 percent of new work contracts lasted less than one year, and 50 percent lasted less than four months (Riesco 2005, 59). In La Pincoya, this high turnover and limited lifetime of the work contract tied into new hierarchies between local contratistas and their neighbors. These contratistas reap substantially higher incomes through subcontracting neighbors on “definite,” or time-delimited, contracts that last less than twelve months, typically two to three months, depending on the type of work. For the urban poor, the state's regulatory environment has institutionalized work as discontinuous and unpredictable.
Valentina returned to the table with bread, margarine, and cold cuts. Pato continued talking, spreading margarine on a piece of bread. After Sodimac, he decided to become a taxi driver. His family lent him money to buy a car. But, he told me, this work is even more unstable. “I don't know if this day will go well or badly for me. During the week, I can earn 20,000 to 30,000 pesos, and this is not sufficient for the house. So, I go to work on the weekends, Friday at night, Saturday at night, to equilibrate the week.” Pato returned to commenting on