Workers Resist Pandemic-Era Disaster Capitalism in Ecuador (In These Times)

QUITO, ECUADOR — Paula had been in quar­an­tine with her hus­band and two kids for 15 days by the end of March 2020 under Ecuador’s strict lock­down, which includ­ed a nation­wide 2 p.m. cur­few. Then, Paula’s boss called. Busi­ness was suf­fer­ing; he would have to let some peo­ple go and cut salaries. He asked Paula if she would agree to a 40% reduc­tion in her month­ly pay. 

Paula, who is using a pseu­do­nym for fear of reprisal from her employ­er, knew she would be fired if she said no, so she said yes. She is her family’s main bread­win­ner and, at age 58, she didn’t know how eas­i­ly she would find anoth­er job. By April 2020, Paula’s salary dropped to $320 a month, about $80 below the legal min­i­mum wage and well below Ecuador’s $721 aver­age month­ly cost of liv­ing for a fam­i­ly of four. Paula quick­ly fell behind on her $200 month­ly rent. 

“What one thinks at this moment is, ​‘Do I go or do I accept?’ ” Paula says. ​“But see­ing how the con­di­tions are, one has to accept because being out of work at this point is too hard.” 

Paula says her boss claimed the change would be tem­po­rary and she would only work six hours a day. Eight months and no dis­cus­sions about rein­stat­ing her salary lat­er, Paula has been work­ing eight or nine hours daily. 

As com­pa­nies strug­gle to nav­i­gate the eco­nom­ic fall­out of Covid-19, thou­sands of work­ers across Ecuador have been laid off with­out sev­er­ance or have had their con­tracts changed overnight. Labor groups say the sit­u­a­tion was made worse after Pres­i­dent Lenín Moreno’s gov­ern­ment used the pan­dem­ic to pass new laws that they claim vio­late the country’s con­sti­tu­tion­al labor pro­tec­tions. These changes include the Organ­ic Law of Human­i­tar­i­an Sup­port (LOAH) passed in June 2020, cre­at­ed on the pre­text of boost­ing the econ­o­my and pro­tect­ing jobs by lift­ing employ­ment restric­tions and offer­ing spe­cial lines of cred­it and inter­est rates to businesses. 

Despite (or because of) these laws, Ecuador’s unem­ploy­ment and under­em­ploy­ment rate was still 30% by Sep­tem­ber 2020. Though those num­bers do not include Ecuador’s thriv­ing infor­mal econ­o­my (such as street ven­dors), only 32% of peo­ple report hav­ing ade­quate employ­ment. Streets have become tense as work­ers, unions and stu­dents con­sis­tent­ly protest. The demon­stra­tions often end in con­flict with the police, who have been rein­forced and on guard since the 11-day anti-aus­ter­i­ty protests in 2019. 

Hernán Aceve­do, a labor lawyer with the Quito-based firm LexAr­tis, says the firm has seen a 200% increase in labor rights claims and law­suits dur­ing the pan­dem­ic. The cas­es have been backed up in the courts for months. As part of cost-cut­ting mea­sures, almost 500 judi­cial staff have been fired or forced into retire­ment since 2019. 

“The gov­ern­ment had an oppor­tu­ni­ty to reg­u­late this in a bet­ter way,” Aceve­do says of mass lay­offs and ille­gal con­tract nego­ti­a­tions like Paula’s, ​“but with the LOAH, they legal­ly legit­i­mat­ed these actions.” 

The LOAH allows employ­ers to rene­go­ti­ate con­tracts, includ­ing reduc­ing salaries up to 55% and work­ing hours up to 50%, with­out a medi­a­tor present and for an unspec­i­fied duration. 

The LOAH also allows employ­ers to use fixed-term con­tracts (up to one-year terms), which can be renewed once. Short-term con­tracts had been pro­hib­it­ed in Ecuador’s 2015 labor reforms as employ­ers fre­quent­ly overused them to deprive work­ers of job secu­ri­ty, the abil­i­ty to orga­nize and access to pen­sion funds (which require 25 years of unin­ter­rupt­ed employ­ment), says Richard Gómez, pres­i­dent of the Cen­tral Work­ers Fed­er­a­tion (CUT), one of Ecuador’s largest unions, which rep­re­sents elec­tri­cians, teach­ers, fire­fight­ers and others. 

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