Padding the Payrolls

Featherbedding is a business malaise in many parts of the world, but in Latin America it is a hallowed institution enjoyed by the participants, cheered by the masses and endorsed by the politicians. Now the feather beds are getting softer than ever.

Four Men to a Job. The problem spreads across the whole range of industry. At least 5,000 of Bolivia's 25,000 mineworkers and 30,000 of Argentina's 180,000 railway workers are superfluous. Chile's creaking national railroad employs 87 men per mile of track v. 27 in Britain, where that number is considered heavy featherbedding. Brazilian 10,000-ton freighters have an average 49 crewmen each, while similar ships under other flags use only 37.* Argentina's depressed auto manufacturers, producing at scarcely 30% of capacity, are desperately trying to thin their ranks; but when Kaiser tried to do so, workers seized the plant and threatened to burn it along with management hostages trapped inside. Peru's Lima-Callao tramcar company, which recently pulled out of bankruptcy, is not permitted by the unions to fire anyone, although it has four workers for every real job.

Latin American labor unions are clamoring for still more stretching of the available work. Last week in Argentina, where payroll padding is a costly legacy from Peron's days, 2,000,000 unionists staged a paralyzing one-day walkout in hopes of pressuring the government to create still more jobs. And in Venezuela, labor unions celebrated a new contract virtually forbidding U.S.-owned oil companies to furlough any men despite automation.

Votes & Excuses. Where poverty and underemployment are everyday realities and privilege is taken for granted, self-seeking politicians underwrite featherbedding to win votes from powerful unions, and then seek out economists to provide scholarly excuses. Says Brazil's Juvenal Osorio Gomes, a government economist: "Only a violently capitalistic regime without any social sentiment would threaten workers with the abject misery of having to look for a job and not finding it. Brazil is not violently capitalistic and never will be."

But some independent economists soundly point out that costly make-work is one of the biggest barriers to desperately needed private investment, and that plucking the feathers would increase productivity, lower prices and expand exports. All of this, of course, would create more jobs and higher wages in the long run.

* In another way of seeking extra benefits, the proud and potent Brazilian dockworkers, who take home close to $500 a month but let automatic loading machines do part of the work, are demanding "shame" bonuses of 30% for handling such cargo as toilet bowls and sanitary napkins.

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