After the government threatened to eliminate the unions' control of their membership dues, the dominant wing of the General Confederation of Labor (CGT) officialdom consented to the takebacks. This latest crisis of the labor officialdom led to its fracturing. A section of the bureaucracy has set up a parallel CGT, taking its distance from the government in order to stem anger among the ranks.

De la Rúa was inaugurated December 10 at the head of the so-called Alliance, an electoral coalition of the traditional liberal Radical Party and another bourgeois formation called FREPASO. It defeated the Peronist party, which under the presidency of Carlos Menem had governed Argentina for more than a decade. While De la Rúa did not offer any major policy differences with Menem's party, many voters viewed him as a new face and lesser evil.

From day one, De la Rúa has worked overtime to satisfy the demands of foreign investors and creditors as well as domestic capitalists. Big business has called for slashing the social wage and other gains won by the working class over decades of struggle.

The rulers of Argentina are striving to improve their competitiveness in relation to capitalists in neighboring Brazil. U.S. and other foreign capitalists have clamored for "labor flexibility" and "reducing the budget deficit," which means gutting union power and cutting social entitlements.

Last year the Argentine economy shrank by 3 percent, in a recession aggravated by Brazil's devaluation. About 60 manufacturers, including foreign auto and rubber companies, have transferred production from Argentina to Brazil in recent months, seeking lower wages and better tax breaks. The Argentine ruling class is seeking to recapture some of this lost foreign investment.  
 

De la Rúa steps up assault

In his first month in office, De la Rúa pushed through Congress a package of budget cuts and consumer tax hikes affecting mainly working people and the middle classes. He restricted funding for the impoverished provinces. The International Monetary Fund rewarded the government with a $7.4 billion loan. Argentina's foreign debt is now equal to half its gross domestic product.

In another salvo, the president issued a decree in January ending union control of the workers' health-care fund, putting it in the hands of the health ministry.

In face of government pressure, CGT officials backed away from a threatened general strike over the antilabor bill. They accepted De la Rúa's blackmail offer of agreeing to the "labor reform" in exchange for the government dropping its threat to eliminate the labor movement's control over union dues. The lower house of Congress approved the bill February 24. It now awaits a vote in the Senate.

The bill would end industry-wide bargaining, which workers won through their battles to organize powerful industrial unions following World War II. Employers would be able to negotiate agreements plant by plant. Industry-wide bargaining has already been undermined over the years by concession contracts in auto and other industries.

The measure would give employers more leeway to fire workers by lengthening probation for new employees--from one month to six, with bosses having the option to extend it another six months. The law would also end the automatic renewal of union contracts during negotiations after the expiration of existing contracts.  
 

Fracturing of union federation

The day Congress approved the antilabor package, a dissident wing of the CGT officialdom, headed by truckers union president Hugo Moyano, organized a demonstration to repudiate it. Some 20,000 angry workers turned out. The Argentine Workers Federation (CTA), a smaller trade union organization, held a separate protest. Both criticized the top leadership of the CGT headed by Rodolfo Daer.

On March 16 the breakup of the main trade union federation was formalized when the Moyano wing held a meeting of 600 delegates and voted to declare a parallel CGT, denouncing the other wing with militant-sounding rhetoric. Despite talk about desiring unity, the leaderships of both CGTs have since been maneuvering to take over the union headquarters.

While wealthy investors are toasting to rosy prospects for them, the majority in Argentina face deteriorating social and economic conditions. Unemployment stands officially at 13.8 percent, but many working people are among the ranks of the "informal sector" of chronically underemployed. The sell-off of state-owned industries during the Menem years led to mass layoffs.

Union membership, for decades one of the highest in the capitalist world, has plunged from 70 percent in 1985 to 40 percent in 1997, and is probably even less now.  
 

Pundits misestimate workers

Incapable of leading a fight against this assault, the union bureaucracy's structures are shattering, like other post-World War II institutions. The unions have been hog-tied by their long-standing political subordination to the Peronist party, a bourgeois nationalist party that for years posed as a champion of the dispossessed and even as a critic of U.S. imperialism, with Bonapartist figure Juan Perón as its symbol.

Under Menem, the Peronists shifted sharply away from this posture. Meanwhile, the allegiance of the working class to the Peronists has steadily loosened. The election of De la Rúa confirms this pattern.

The big-business press interprets these developments by describing working people in Argentina as more conservative. "Some 73 percent of Argentines do not trust the unions," a reporter from the Financial Times of London smugly declared, citing an opinion poll. Left-wing middle-class commentators echo this view.

But resistance among workers and farmers in the South American nation continues to bubble, sometimes exploding unexpectedly. The anger is often directed at the traditional political parties and institutions that have failed to offer solutions to the deep-going social crisis.

The most recent social explosion took place in the northeastern province of Corrientes, where workers at state-owned enterprises, infuriated because they had not been paid for months, blocked a bridge--a key international trade link--and waged a pitched battle with federal police, who killed two workers. The national government has been running the province since then.

Some 100 workers at the Lumbrera y Prarizzi poultry plant, near the industrial center of Rosario, began the millennium by taking over their factory and blocking a highway January 5. They prevented the bosses, who were pleading bankruptcy, from removing machinery from the plant and closing it down without paying wages. Government officials hastily intervened and worked out a deal to keep the plant running for the time being.  
 
 
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