This represented a slight decline from the previous year. In 1993, the situation reversed itself again, with employment in the informal economy rising to 40.8 percent. A new labor law, which expanded many previously existing benefits, came into effect on May 1, 1991. The law resembles a lengthy and detailed collective contract and embodies the view that large businesses must provide correspondingly large benefits. Under certain circumstances, employers are responsible for the transportation costs of workers, as well as their housing, medical care and education.
Dismissals continue to be closely regulated.
Critics of this legislation claim that its lack of flexibility limits the ability of both employers and unions to adapt to individual circumstances. The most controversial aspect of the new labor law concerns a change that employers unsuccessfully sought to include. Designed during a period of low inflation, this lump sum retirement benefit throws the burden for inflation adjustments entirely on the employer, and has become a large and increasing component of wage bills during the past four years of relatively high inflation. Government, business, and organized labor agree that the present system should be re-examined, but have not yet reached consensus on an alternative. About 30 percent of all workers are covered by collective contracts, but the number of workers who hold union membership is almost certainly somewhat smaller.