Ecuador Internacional

Why Labor Day Is the “Day of Resistance” in Ecuador

Confiscatory Taxes, Reneged Commitments Incite the Ire of Workers

PanAm Post - Rebeca Morla 01/05/2015

Supporters and opponents of the government of President Rafael Correa will demonstrate in the streets of Guayaquil, Quito, Cuenca, and other cities in Ecuador on May 1. (Plan V)

Supporters and opponents of the government of President Rafael Correa will demonstrate in the streets of Guayaquil, Quito, Cuenca, and other cities in Ecuador on May 1. (Plan V)

This Labor Day in Ecuador can be described as intense, to say the least. On Friday, May 1, two opposing demonstrations will take to the streets of the major cities in the country.

On the one hand, it will be a “day of resistance” for civil-society organizations, labor unions, and indigenous groups, against the oppressive regime of President Rafael Correa. On the other, it will be an opportunity to defend the Citizens’ Revolution promoted by the government.

But what reasons have led Ecuadorians to initiate nationwide, large-scale demonstrations?

Law on Labor Justice

On Monday, April 20, the Law on Labor Justice entered into force, replacing three previous laws on labor and social security.

Passed with 91 votes (out of 137) in the National Assembly and followed by President Correa’s immediate approval, the new legislation establishes several changes that have been rejected both by workers and retirees.

The document establishes a ceiling or cap on corporate profit sharing with private workers. Earnings that exceed the stipulated amount – more than US$8,500 per year — must be delivered to the Ecuadorian Institute of Social Security (IESS), in what amounts to a 100 percent marginal tax. The new law also expands the social-security system to include those not engaged in formal employment, such as housewives — although participation is voluntary for the time being.

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