In labor markets as weak as those of Peru from the early 1970s onward, organized labor has not normally had any great bargaining power. It could affect the political balance, but it has not been able to do much to keep real earnings from falling when the economy declined. Peruvian labor has never been more than moderately organized in any case: unionization did not take off significantly until the political climate changed with the reformist military government of 1968. Labor has played a more active political role since that time, but has not so far been able to prevent deterioration of real wages (see Labor Unions , ch. 4).

Organized labor in Peru got off to a slow start in the interwar period (1919-40), compared with active unionism in Argentina, Chile, and Venezuela. Still, the textile workers, in the one sizeable industry of the time, managed to defy the government and win a famous strike in 1919. They gave the credit to a student activist who stepped in to lead them and negotiated an impressive victory. The activist, Víctor Raúl Haya de la Torre, went on at the beginning of the 1930s to found the American Popular Revolutionary Alliance (Alianza Popular Revolucionaria Americana- -APRA), the country's first mass-based political party. Haya de la Torre simultaneously promoted organization of labor through the Confederation of Peruvian Workers (Confederación de Trabajadores del Perú--CTP) and consolidated a close partnership between APRA and the CTP. The CTP was the dominant voice of labor until Haya de la Torre allied himself with the conservative side of the political spectrum during the 1960s. That move to the right then stimulated the growth of a rival Communist-led labor federation, the General Confederation of Peruvian Workers (Confederación General de Trabajadores del Perú--CGTP).

Neither APRA nor the labor movement made much headway under the conservative governments in office up to the 1960s. But after the reformist military government took power in 1968, unionization spread rapidly. More new unions were given legal recognition from 1968 to 1978 than in all prior Peruvian history: there were 2,152 recognized unions in 1968 and 4,500 by 1978. The new unions, less tied to APRA, began to strike out more on their own to undertake joint negotiations and demonstrations with community groups of all kinds. The military government began to regard unions less as allies and more as sources of opposition, and in fact labor became a center of resistance to military authority all through the 1970s.

Although the Velasco government was committed in many respects to support of popular organizations, its relationships with organized labor turned into conflicts in two fundamental ways. One was purely economic the government was initially determined to prove its ability to avoid inflation, which it identified as evidence of the inherent weakness of civilian governments. Increase in wages was seen as a threat to control of inflation, and wages in general were considered a matter to be decided by government rather than unions. The second and more general source of conflict was that the Velasco government had a strongly corporatist (see Glossary) conception of social order, in which labor unions had their place but had no business trying to change it. The government was deeply opposed to theories of class conflict. Labor and capital alike were expected to recognize that their interests had to be reconciled for the good of the society as a whole. The military welcomed and sponsored public organizations but distrusted any signs of excessive autonomy.

Once in open conflict with the two main labor confederations, the government tried to undercut them by creating a new one, the Federation of Workers of the Peruvian Revolution (Central de Trabajadores de la Revolución Peruana--CTRP see Labor Unions , ch. 4). The new confederation received government help in getting favorable wage settlements and added to the scope of labor organization but had little effect in actually weakening the more independent unions.

In the economic contraction following 1975, labor played a more active role of social protest than ever before. The first general strike in the country's history, in July 1977, seemed to herald a new epoch in labor relations in Peru. Labor's support for left-oriented parties, no longer so predominantly for APRA, became evident in the elections of 1980. In terms of wage trends, the more active role of organized labor has not seemed to make much difference. Organized labor certainly did not stop the devastating fall of real wages in the 1980s. Still, average wages for workers under collective bargaining contracts have been much higher than those for workers without them. As of December 1986, the average wage for those with contracts was 2.2 times that of workers without them. That ratio fell to 1.7 by December 1989, as everyone's real wages plunged.

Data as of September 1992