Can Latin American Workers Dodge the Deaths of Despair?

For much of the last century, mortality rates in the United States fell steadily. But from 1998-2013, that trend reversed for a special demographic: non-Hispanic whites, aged 45-54. The problem, according to a new study by Nobel Laureate Angus Deaton, and fellow economist, Anne Case, lay in people lacking a college degree. Tens of thousands of those middle-aged whites were succumbing to “deaths of despair” from suicide, drugs, and alcohol, causing an overall decline in mortality for that demographic and, for 2014-2015, in life expectancy in the United States as a whole.

The losses, comparable to those from H.I.V/AIDS, represent a stunning reversal of progress. And they are inseparable from the decline in steady, well-paid working class jobs in manufacturing from the blue-collar peak of the 1970s, due to globalization and increasing automation. But the phenomenon extends far beyond work. People without good jobs tend to marry less, divorce more, and lose regular contact with their children. Accompanying social changes mean they are also less likely to participate in unions and the churches of their parents and grandparents. This “cumulative deprivation,” of financial strain, loss of structure, and social isolation is soul-destroying. It fuels the hopelessness that causes large numbers of people to take their lives or drink and drug themselves to death.

But it has not been universal. While the so-called “blue-collar aristocracy” of the 1970s was knocked off its perch in the United States, Latin America and especially South America seem to have undergone a transformation in the opposite direction since the early 2000s. Indeed, as pointed out in a recent blog by the IDB’s Julián Messina and Andrew Powell and in a forthcoming book on inequality by Messina and Joana Silva, globalization and free trade have very different effects in developed and developing countries. In developed countries, like the United States, the supply of skilled labor is high, and trade tends to push wages down for the relatively unskilled. Those jobs, after all, can be outsourced oversees. However, in developing countries, like those of Latin America, trade is likely to increase demand for unskilled labor, causing wages at the bottom to rise.

That is what happened in South America during the commodity boom of the 2000s. As China emerged as a major player in world commerce with a huge demand for the oil, soybeans and other commodities produced by the region, money poured into South American countries. Public and private spending increased, new factories and infrastructure were built, and people went on a spending spree, resulting in higher demand for goods that require low-skilled labor, including in construction, retail, and transport. Moreover, this was happening in a context where more and more people were going to college. As a result, the supply of low-skilled labor was less than it had been, and wages rose as overall inequality fell.

It may be foolish to speak of a “blue-collar aristocracy” in Latin America, as there had once been in the United States with all the comfort and perks of middle-class life. But the laborers of the region were getting a huge material as well as psychological lift. This was a horizon of hope rather than decline, and it put the South American laborer on an opposite trajectory as his counterpart in the United States, who had been suffering a long, slow ride down for decades.

That boom, however, is now over. The region is in retrenchment, and inequality, after falling in 16 of 17 countries studied by Messina and Silva in Latin America and the Caribbean during the 2000s, is inching back up at least in some countries.

No study seems to exist that would allow for accurate comparisons between financial well-being, disease and mortality in the United States, as in Deaton and Case’s study, and the situation farther down south. But there are at least several areas of concern. Some 56% of Latin American adults are now overweight or obese, a figure that rises to 70% in Mexico, with the poor among the phenomenon’s greatest victims, according to a 2014 report by the Overseas Development Institute. Mental health and neurological disorders, including depression, anxiety, and bipolar disorder, represent nearly a quarter of the disease burden (years lost to disease) in Latin America, with the poor again at greatest risk. And overall suicide rates in Latin America and the Caribbean, though low by global standards, appear to be on the rise.

There may be something protective for workers facing hard times in the strong family networks typical of Latin American culture. They may also have greater reason for hope. Case and Deaton, for example, document that mortality rates in the United States continue to fall for Hispanics of all income levels. Perhaps this is because, unlike whites, they aren’t yearning for a better economic situation once enjoyed in the past, as argued by Moisés Naím, a distinguished fellow at the Carnegie Endowment for International Peace, in a recent column in the Spanish Daily El País. They never had such a past and their hopes lie in a future that can only be better, says Naím. Perhaps that is true as much for Hispanics in the United States as for workers in most countries in Latin America.

Between 1900 and 2010, life expectancy in Latin America and the Caribbean increased from 29 years to 74 years, and now trails that in North America by only 4 years. Low-skilled workers recently have made significant gains in earnings and wellbeing in many countries of the region. Still, governments will have to be alert to any economic, social and healthcare policy options they have to ensure those gains are preserved and that anxiety over work amidst a downturn does not transform into deaths of despair.

 

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The Author

Steven Ambrus

Steven Ambrus worked as a correspondent for US and European media during two decades in Latin America, covering politics, education, the environment and other issues. He currently works in the communications and publications unit of the Research Department at the IDB.

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