Peru repeals youth labor law amid protests

LIMA - Lawmakers repealed a controversial youth labor law following a series of violent student protests, dealing a hammer blow to the government.

Legislators voted 91-18 on Monday in favor of rescinding the law passed in December that set to tackle informal work conditions and unemployment for Peru’s youth. Five abstained.

The reversal dents the authority of President Ollanta Humala’s Nationalist party, already reeling from a defection of a lawmaker Sunday that left it with one seat less in Congress than main opposition, Fuerza Popular.

According to a Jan. 25 survey by pollster Gfk, three in four Peruvians opposed the law that cut employment benefits for workers aged 18 to 24 as part of a stimulus package to boost the economy.

The legislation would have brought 2 million young adults into the formal economy through lowered costs to hire them, according to the government.

Peru’s nine out of 10 youth who work informally would have received state-paid work insurance, though lose annual bonuses and see annual leave halved to 15 days.

"We no longer have this law, but what Congress has lacked to do is give an alternative," Humala said, according to La Republica newspaper.

Students marched on the capital of Lima for a fifth time during Congress’ five-hour debate, celebrating the repeal of the law known pejoratively as the "Pulpin Law."

Pulpin, a fruit juice brand aimed at children, has taken on connotations of innocent youngsters who can be exploited.

Demonstrations on Jan. 14 saw violent clashes with 20 arrested and 16 police officers injured, as the thousands-strong rally turned fraught.

"This law was disastrous for work rights," opposition congressmen Yonhy Lescano said. "This law only made work more precarious and mistreated young people."

But the revoking of the law puts in doubt reform of Peru’s sclerotic labor market, badly needed according to Peru's business community.

"The repeal of the law is a symbol that intermediate reforms can’t be done in Peru," labor lawyer Jorge Toyama said in comments to Gestion newspaper. "This was going to be the first attempt to make the market a little more flexible, but now the chances of that are remote."

Peru has the 15th most rigid labor market out of 144 countries worldwide, according to World Economic Forum figures. Only Venezuela is higher in the region.

The main private business federation, Confiep, gave its full backing to the law and saw its headquarters targeted by protesters on past marches.

Peru’s main trade union, CGTP, thanked "the Peruvian youth for the political triumph of achieving the repeal of the Pulpin Law," in comments on Twitter.

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