Paraguay Table of Contents

Paraguay's labor force surpassed 1.4 million in 1986, or approximately 37 percent of the country's estimated population. Government statistics recorded an unemployment rate of 14 percent in 1986, but that figure dropped to 8 percent in 1987. Estimates of unemployment varied widely outside Paraguayan government circles. For example, the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) estimated unemployment as high as 18 percent in 1986 with as much as 50 percent underemployment in urban areas. Males dominated the official labor force, accounting for 79 percent of registered workers. Women were visibly a much higher percentage of the work force than official statistics reflected. But, unlike in most Latin American countries, Paraguay's female labor force was not growing faster than the male labor force; males were expected to continue to constitute a disproportionate share of the labor force for some time to come.

Statistics on the distribution of labor by economic sector in 1987 showed 48 percent of workers in agriculture, 31 percent in services, and 21 percent in industry. Males dominated agricultural labor, whereas women were most prominent in the services sector. The country maintained the highest percentage of labor in agriculture in all of South America and one of the lowest services percentages on the continent. Nevertheless, according to data from the IDB, a large portion of the labor force in Asunción was in the informal sector, generally in services. In fact, Asunción ranked second among Latin American cities in the percentage of labor force in the informal sector.

Unlike most Latin American countries, the distribution of Paraguay's labor force had changed little in thirty-five years. In 1950 agriculture comprised 55 percent of the labor force, services 25 percent, and industry 20 percent. The greatest fluctuations within economic sectors during the 1980s occurred in the construction industry, which was directly affected by hydroelectric development. After the end of Itaipú's construction phase in the early 1980s, observers estimated that the number of construction workers dropped from 100,000 to 25,000, but they expected that the start-up of construction at the Yacyretá hydroelectric project would restore many of those jobs.

Comprehensive labor laws had been passed since 1961, but they were not universally enforced. Laws theoretically regulated maximum hours to be worked per week, child labor, union activities, female labor, maternity leave, holidays, and social security and established a minimum wage. Minimum wages, in effect since 1974, were set by the Labor Authority according to geographic location and task performed. Minimum wages in the 1970s and 1980s did not keep pace with inflation, and the real minimum wage was eroding. The real wages of the work force at large, however, eroded even more quickly than minimum wages over the same period. Employees typically worked from 6:00 A.M. to 8:00 P.M. with an almost universal midday siesta.

Organized labor provided the best example of the loose enforcement of labor laws. Although the country's labor laws permitted free association by labor unions, most labor movements had been thwarted by the government since 1958, the year of a major strike by the Paraguayan Confederation of Workers (Confederación Paraguaya de Trabajadores--CPT). There was a growing independent workers' movement developing in the 1980s, which was fueled mostly by dissatisfaction with the declining real wage of the Paraguayan worker. Nonetheless, unionized labor remained dominated by the CPT, which was generally more progovernment than prolabor and rarely challenged government policy.

More about the Economy of Paraguay.

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Source: U.S. Library of Congress