Population, territory and sustainable development

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Box IV.6 (concluded)
These and other observations lay behind this project, whose aim was to discover what was happening in the
rural labour market, on the hypothesis that the market’s workings were partly to blame for its poor performance in
relation to poverty reduction, inasmuch as the rural labour market was clearly not distributing the benefits of growth,
particularly among the rural poor. The five case studies showed that in some of the countries, over half of ruraldwellers
are poor and, in all five countries except Chile, poverty is higher in rural than in urban areas. The authors
note that there are multiple causes for this, but focus on determining those origins of poverty that lie in the labour
market, specifically in wage work which is where the labour market operates. The study’s main findings are
summarized below.
Most of the rural employed work mainly in agriculture —except for in Costa Rica and El Salvador—
but non-agricultural rural employment, especially in commerce and services, is nonetheless significant. This is
important when it comes to analysing poverty, since non-agricultural rural activities generate higher income
than agricultural activities. Occupational structure shows that most of the rural employed are wage workers in
Costa Rica and Chile and, to a lesser extent, in El Salvador. In Peru few rural employed work for wages, but
those that do are mainly on the coast. Brazil has a slightly higher proportion of rural wage workers than Peru,
but they are concentrated in certain activities such as the growing of sugar cane and export fruit and a few other
activities. In addition, the percentage of urban-dwelling wage workers employed in agriculture has risen: almost
half of workers employed in agriculture in Chile and around a third in Brazil. Taken together with the tendency
for rural employment to be increasingly seasonal, it becomes clear why poverty is more widespread among
seasonal workers living in urban areas. Seasonal workers make up two thirds of those employed in agriculture in
El Salvador and three fifths in Chile, and in all five countries seasonal workers, when employed, earn between
65% and 75% of the income of permanent workers. So any attempt to understand rural poverty must focus on
primary activities.
From analysis of the operation of the main labour market institutions, it is clear that their poor
performance and coverage explain much of rural poverty. First of all, with the exception of Chile, avoidance of
legal minimum wages is widespread, especially when it comes to poor workers: poor workers are poor because
they do not earn what the law says they should and this is the responsibility of the firms which hire labour and the
State which ought to ensure compliance with the law. Many wage workers earning below the legal minimum
actually work longer hours than the normal working day; this occurs in Brazil. This is simply exploitation. Second,
employment informality —i.e. where workers have no contract or social security provision— is also very common,
especially among rural women. In all the countries studied, job informality rates are between 54% and 98% among
the poor, and between 23% and 85% among the non-poor. In other words, there is a clear, direct link between
employment informality —an avoidance issue for which employers and the State are responsible— and rural
poverty. Trends in labour intermediation and subcontracting, which have been observed in some countries, are also
influencing the increasingly precarious conditions of employment and the consequent increase in poverty rates.
Naturally, comprehension of rural poverty dynamics also requires analysis of other labour-related processes
occurring in the labour market, and the case of child labour is perhaps the clearest: it takes children out of
education, their work contributes little to the family income and it passes poverty on from one generation to the
next since the link between poverty and low level of schooling has been highlighted in many case studies. Also, in
poor households few members work, and this is crucial because among the poor labour income forms the bulk of
total household income. A related point is that poor households have a much larger number of people who are
economically dependent on each employed household member than non-poor households, which explains their low
per capita income. One of the reasons for this is women’s rate of participation in paid employment, which is
generally lower than that of men; and rural women have a lower economic participation rate than urban women.
Lastly, the authors note that, since the study examined the operation of the labour market, the reasons for the
poverty of the rural poor not participating in that market must be sought in other variables, such as production
resources, technology, spatial integration and other factors.
Source: Food and Agriculture Organization of the United Nations Economic Commission for Latin America and the
Caribbean/International Labour Organization (FAO/ECLAC/ILO), Políticas de mercado de trabajo y pobreza rural en
América Latina, Santiago, Chile, 2010.