Dominican Republic - Labor

Informal Sector

Many Dominicans escaped formal government data collection, but nonetheless played a major economic role, particularly in the urban economy. Estimates of the size of the informal urban economy in the late 1980s ranged from 20 percent to 50 percent of the total urban labor force. Workers in the informal sector included self-employed people, unpaid family workers, domestic servants, and very small businesses or "microenterprises" of only a few workers in manufacturing and assorted services. Although little reliable data existed on the country's informal sector, many in that sector received economic assistance from the United States Agency for International Development (AID), the InterAmerican Foundation, and other development agencies to promote their expansion into the formal sector. Some observers believed that the growth of the informal sector was a response to the complex legal framework for business, restrictive exchange-rate controls, widespread informal financial markets, pricing and tax policies, and the often-cited Dominican preference for highly personal relations.

Labor

According to official statistics, the Dominican labor force had grown to 2.8 million by 1988. The labor force equaled about 74 percent of the nation's 3.8 million economically active citizens, a group that included all those between the ages of 15 and 64. Official unemployment stood at 26 percent, but like many of the country's labor statistics, this measure was only an approximation. More than 80,000 workers entered the job market annually in the 1980s. Unemployment declined slightly in the late 1980s, and it was expected to continue to drop because of the explosive growth of free-zone manufacturing jobs. The seasonal nature of jobs in agriculture and tourism, however, created patterns of structural underemployment that affected a quarter of the labor force. Half of the economically active population suffered from either unemployment or underemployment.

The structure of the labor force had changed significantly during the post-Trujillo era as agriculture's share of output diminished. In 1950 agriculture had employed 73 percent of Dominican labor, but by the end of the 1980s it accounted for as little as 35 percent. Industry and services had incorporated approximately 20 percent and 45 percent, respectively, of displaced agricultural labor. As a consequence of gaps in the labor statistics, official estimates of the female segment of the economically active population varied widely, from 15 to 30 percent of the labor force. Whatever the total figures, the role of women, particularly in the urban economy, was growing by the late 1980s. Seventy percent of the employees in free zones were women; as greater numbers of free zones opened in the late 1980s, the rate of employment for females more than doubled the rate of employment for males. This shift represented a major transformation in the labor force; previously, the percentage of women in the Dominican work force had been lower than that for any other Latin American country. Men continued to dominate agricultural jobs in the late 1980s. These were among the lowestpaid jobs in the country. The highest salaries were earned in mining, private utilities, financial services, and commerce. The distribution of income among workers was highly skewed; the top 10 percent earned 39 percent of national income, while the bottom 50 percent garnered only 19 percent.

Dominican labor laws dated back to the Labor Code of 1951. Among the many matters on which the code ruled were the maximum number of foreigners that could be employed in a workplace, guidelines for labor unions, child labor practices, the minimum wage, the length of the workweek, vacations, holiday pay, Christmas bonuses, overtime, social security, and other benefits. No government agency enforced labor legislation, however, which reduced the actual power of most workers vis-�-vis management.

In the 1980s, the most controversial labor law was the one governing the national minimum wage. Although the Congress of the Republic increased minimum wages on several occasions throughout the decade, unusually high inflation usually outpaced these increases, which reduced the real wages of workers. General strikes or other confrontations between labor and government frequently resulted. Government officials were reluctant to grant frequent raises in the minimum wage, in part, because they felt the need to keep Dominican wages competitive with those of other developing countries. Dominican wages did indeed remain lower than those in other Caribbean Basin countries, with the exception of impoverished Haiti.

Organized labor represented between 12 percent and 15 percent of the labor force in the late 1980s. The number of active union members ranged somewhere between the government's estimate of 250,000 and labor's figure of more than 500,000. Thousands of unions were syndicated into eight major labor confederations; nearly 100,000 Dominicans also belonged to independent unions. Scores of peasant-based movements and organizations were also active. Thirty-two percent of the eight labor confederations' member unions were affiliated with the International Confederation of Free Trade Unions, 16 percent with the World Confederation of Labor, and slightly more than half with international communist unions. Unions appeared only after the Trujillo era, and in the 1980s they were still young, weak, poorly financed, and politically divided. The issues most important to Dominican labor included rising prices, the declining real minimum wage, and collective bargaining. Industrial disputes increased noticeably in the late 1980s. In particular, these took the form of general strikes and intensified activism among professionals. Organized labor had begun to establish a foothold in the free zones, and disputes over unionization in these areas loomed as the fundamental labor issue of the future.

Labor Law in the Dominican Republic - Guzm�n Ariza
Labor Law - Employment and HR - Dominican Republic
Dominican Republic Labor Force | Moody's Analytics
Dominican Republic Labor Stats: NationMaster.com
Dominican Republic - 9.2-Labor | export.gov