In December 2014, Chile’s Socialist president Michelle Bachelet announced a proposal for labor law reform intended to repeal the main aspects of the probusiness labor laws imposed in 1979 by Augusto Pinochet’s neoliberal dictatorship (1973 – 1990).
Pinochet’s laws were designed to restrict collective bargaining to the firm level, to allow employers to hire replacement workers during strikes, and to weaken union activity by promoting the coexistence of multiple unions within firms and the formation of firm-level “bargaining groups.”
Bargaining groups are formed solely to sign collective agreements, regardless of whether the firm has a union, without the right to strike or legal protections for the workers who joined them. For these reasons, employers have spent decades promoting the formation of these groups to discourage union membership.
The Bachelet Labor Reform (2015 – 2016)
The Bachelet bill was not the first attempt to reform the 1979 labor laws. Since the return to democracy in 1990, the center-left coalition Concertación came to power promising pro-labor reform. First in 1990 under the leadership of president Patricio Aylwin, then in 2000 under the government of Ricardo Lagos, Concertación administrations introduced labor reform bills into Congress.
However, in neither case did the government succeed in their attempts to repeal the 1979 laws. Scholars explain the failure of these reform attempts by noting center-left policymakers’ lack of resolve to implement pro-labor reforms. Others have emphasized the effect of institutional legacies from the Pinochet dictatorship which were designed to over-represent conservative views in the legislature and give right-wing parties veto powers. Likewise, labor weakness played a key role in the failure of the 1990 – 2001 labor reforms: after years of repression, and lacking the support of political allies in power, workers were simply unable to push for reforms.
Unlike the reform attempts in the previous decades, however, by mid-2010, the political conditions seemed favorable. Between 2007 and 2015, Chile witnessed a renaissance of union activism in both strategic sectors such as mining, forestry, and the port industries and in traditionally less organized industries such as retail.
Similarly, in the early 2010s, the Communist Party became the hegemonic force in Chile’s largest labor federation, the Central Única de Trabajadores (CUT). Communist workers emphasized the need to abandon the tactics of restraint and cooperation defended by Concertación labor leaders between 1990 and 2010.
In addition, in response to the 2011 anti-neoliberal protests, the center-left parties grouped in the Concertación decided to move to the left, entering into a new coalition known as the Nueva Mayoria (NM) with the Communist Party and campaigning for an ambitious reformist platform. This reformist agenda would later be characterized by an NM senator as the “backhoe” that would destroy “the underpinnings of neoliberalism.”
Thanks to this platform, in December 2013, the NM obtained a comfortable electoral victory. This victory gave Michelle Bachelet the presidency and a partisan majority in both the Senate and the Chamber of Deputies.
Nevertheless, despite more favorable conditions, the Bachelet labor reform failed to repeal the central pillars of the 1979 Labor Plan. Though pro-labor deputies had proposed provisions to facilitate sectoral collective bargaining, the executive branch quickly dropped the proposals from the bill once employers organized in the national Confederation of Production and Commerce (CPC) made it clear that they would strongly oppose them.
In addition, though the government’s original proposal aimed to restrict bargaining groups’ ability to sign collective agreements, this proposal was eventually defeated as well. After passing the Senate, right-wing opposition parties filed a successful injunction against this provision in the Constitutional Tribunal, arguing that the government proposal was unconstitutional because, if passed, it would “force” individual workers to become union members.
Finally, the 2015 – 2016 reform process failed to protect the right to strike. While formally prohibiting the replacement of strikers, the new labor law permits employers to make any “necessary modification” in non-strikers’ shifts to ensure the firm’s provision of broadly defined “minimum services.”
By the end of the reform process, the CPC used its ties to both right-wing parties and the conservative sectors of the ruling coalition (mainly the Christian Democrats), to successfully influence the policy-making process, giving employers the ability to influence (i.e. to broaden) the definition of what a “minimum service” is.
Associational Power and the Failure of Labor Law Reform
Why, despite the more favorable political context, did the Bachelet reform project fail to dismantle the regulations on collective bargaining, union organization, and strike activity established during the Pinochet dictatorship? In my research, I found that the disparity between capitalists’ and workers’ associational power was a central factor shaping the outcomes of this most recent reform process.
For decades, scholars analyzed the class politics of policy-making by noting that linkages between labor and center-left ruling parties are a crucial power resource that makes pro-labor reforms more likely to pass. Recent scholarship has attempted to refine our understanding of power by distinguishing types of labor’s power other than partisan linkages. Based on Erik Olin Wright’s well-known definition, scholars have thus defined associational power as the power resulting from the formation of collective associations such as unions and work councils.
Drawing upon this literature, my evidence from the Chilean case suggests that we need to extend the notion of associational power to examine both worker and employer power. In doing so, we can analyze how labor and business mobilize collective power through their organizations to advance their interests vis-à-vis the state.
My analysis of the Bachelet reform process shows that the disparity of associational power between workers and employers was key to explaining why the reform attempt failed in spite of the fact that right-wing opposition parties’ power was weaker than it had ever been and in spite of the fact that party-union linkages were strong (the CUT itself enthusiastically endorsed the government’s proposals).
A careful examination of labor’s power in Chile demonstrates that, perhaps surprisingly, labor’s partisan linkages have undermined the construction of associational power. Since at least the 1990’s, they have increased political disputes within the labor movement and have undermined the CUT’s ability to forge class-wide unity and construct collective power.
During the 2015 – 2015 reform process, partisan linkages amplified tactical and strategic conflicts within the labor movement as a result of the CUT’s unwillingness to adopt repertoires of action other than lobbying (e.g. mass mobilization tactics). Disruptive tactics had been successfully implemented during the 2007 – 2015 cycle of labor revitalization, so the CUT’s refusal to implement them was frequently criticized by leftist unions as an expression of its “subordination” to ruling center-left parties.
In contrast, CPC leaders have worked hard to overcome strategic, political or ideological intra-class conflicts—e.g. to ameliorate the conflicts between sectoral associations and between the “neoliberal” and “protectionist” wings of the Chilean capitalist class. Since employers revived the CPC to confront the threats they perceived from the democratic restoration in the late 1980s, the CPC has been a peak-level, class-wide articulator of business collective action.
Unlike the CUT, and despite more than thirty years of center-left democratic rule, the CPC has not suffered from splits or, in periods of reform, from the emergence of coalitions that openly question its leadership role. As a result, in forging and safeguarding class unity, the CPC has worked as a vehicle of associational power that in periods of reforms has allowed employers to confront governments and labor as a single block.
Lessons from the Chilean Experience
The Chilean case has two main implications for class analysts and labor activists. First, it suggests the central importance of studying worker and employer associational power simultaneously. Associational power is key for examining not only how workers and employers organize to influence the policy-making process, but also for studying the impact of other power resources (e.g. political, institutional or economic power resources) or the lack of thereof.
Focusing on these non-associational power resources, Chilean scholars contend that labor’s weakness stems from both the center-left parties’ abandonment of class politics and the persistence of the 1979 labor laws, which fragment unions and attach workers’ interests to firm-level demands. Conversely, they demonstrate that capital’s power to influence the policy-making process stems from employers’ structural (economic) power, their linkages with right-wing parties, and the adoption of neoliberalism by important center-left parties such as the Socialist Party.
Without denying the importance of these power resources, I argue that workers or employers can deploy, or compensate for weaknesses in, these power types only once they have successfully constructed associational power—i.e. only once they have forged class-wide solidarity and consciousness and are prepared to act as a class. Associational power allows us to understand why Chilean business has been so successful in defending the persistence of the 1979 labor laws, which in turn is key for understanding labor’s weakness. In other words, focusing simultaneously on worker and employer associational power allows us to examine class power as a relational phenomenon, i.e. one in which the power of one class shapes and is shaped by the power of the other.