Employment and working conditions in the Ecuadorian flower industry

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SAP 2.79/WP.138

Employment and working conditions
in the Ecuadorian flower industry

Introduction

1. Industry significance
    1.1 Financial
    1.2 Flower production
    1.3 Markets
    1.4 Air transport

2. Employment and working conditions
    2.1 Employment practices
        2.1.1 Direct employment
        2.1.2 Women workers
        2.1.3 Occupations
        2.1.4 Age
        2.1.5 Hiring criteria
        2.1.6 New hires versus terminations
        2.1.7 Indirect employment
        2.1.8 Temporary work
        2.1.9 Investment and employment
    2.2 Wages
        2.2.1 Sectoral wages
        2.2.2 Compensation packages
        2.2.3 Form of payment
        2.2.4 Work.hours
    2.3 Markets
        2.3.1 Main illnesses
        2.3.2 Preventive measures
        2.3.3 Limitations on risk control
        2.3.4 Accidents
    2.4 Air transport
        2.4.1 Inputs used
    2.5 Green Seal and implications
    2.6 Unions
    2.7 Training

3. Institutional framework and sectoral policies

3.1.	Industry organization and representation
3.2.	Government policies
	(a) Promotional policies (b) Macroeconomic policies (c) Anti-inflation policy (d) Foreign exchange policy (e) Tax policy (f) Financial policy (g) Trade policy (h) Labour policy

4. Conclusions

4.1. Business issues
4.2. Labour issues

List of exhibits

1. Checklist for Green Seal
2. Sample applied survey

Zonia Palán and Carlos Palán *

Working papers are preliminary documents circulated informally in
a limited number of copies mainly to stimulate discussion and obtain comments

International Labour Office, Geneva
August 1999

* Zonia Palán is at the Economics Faculty, Pontifical Catholic University. Carlos Palán is Professor, Faculty of Engineering and Chemistry, National Polytechnic School. Editorial assistance of Philippe Egger and Vali Jamal is hereby acknowledged with gratitude.

1. Introduction

Increasing unemployment and poverty are two of the most pressing problems facing the Government and society in Ecuador. Employment policies are virtually non-existent. The opening of world trade and its liberalization have resulted in significant changes in the country's production structure. International competition has triggered not only technological changes, but also skill upgrades, leading to a consequential redefinition of general employment rules as well as contract and employment conditions. Low wages and flexible employment practices offer comparative advantage for products with an export potential. However, exports, especially non-traditional exports, have constraints related to technology, quality, infrastructure, transport, procedures, promotions and markets, and to financial and political instability. Nevertheless, exports have posted an annual growth rate of 33 per cent between 1990 and 1997.

The flower industry is a new employment-generating activity in Ecuador. Its spread in rural areas has not only helped slow down the migration process, but also significantly incorporated women into the labour force and become the point of reference for regional development plans and policies.

This document will analyse the financial significance of the flower industry, its general employment practices, government policies impinging upon it, and behaviour of the principal players of the industry. Significant conclusions from a field survey of nine companies representing 6.7 per cent of the total industry exports and from interviews of two marketing companies, as well as information gathered from discussions with flower industry workers will be presented.

Updated by BR. Approved by OdVR. Last update: 28 September 2000.