La Salada. Dismantling the fair will not solve the precarious situation.
SANKT GELLEN, Switzerland
La Salada is a peculiar phenomenon. Its periodic appearance in public debate often stirs prejudices, reproducing myths and sentiments that seem to exaggerate its true nature: an informal clothing market located just a kilometer outside the city of Buenos Aires. In this article, I propose to challenge several of these commonplaces, certain that, to achieve different results and stop thinking of La Salada as a criminal phenomenon, a more cautious and comprehensive perspective is needed.
For politics, formalizing the fair has been an electoral risk and not an opportunity.
La Salada exists because a majority of Argentine society suffers from a severe problem of access to formally produced clothing. It is, therefore, a phenomenon closely associated with growing social inequality. And, as such, it is not an Argentine phenomenon, as exactly the same or even larger markets exist in Brazil (Feira da Madrugada) or Italy (Macrolotto). The problem of access to clothing is likely due to a set of factors such as, for example, the cost of labor, the tax burden, or low wages. To understand the problem, it is important to note that, for a long time now, most families have been unable to obtain clothing solely from shopping malls or "brand-name" stores. The flip side of this difficulty is, then, a widespread demand for affordable clothing, which La Salada meets. Two clarifications are in order here. First, La Salada is no longer "the shopping mall of the poor," as Jorge Ossona once wrote. All segments of Argentine society—high, middle, and low—buy clothing sold through La Salada. You, the reader, might say, "But I've never been to La Salada!" The second clarification is in response to your comment: knowingly or not, you've been buying clothes from La Salada, which is something of a central clothing market: the garments displayed there are resold at other fairs—the famous "saladitas"—and also in countless neighborhood stores in every city in the country.
At this point, it's quite clear that La Salada is much more than a property located in Lomas de Zamora. The three markets in this complex—Punta Mogote, Ocean, and Urkupiña—are just the first link in the distribution chain for clothing manufactured in some 24,000 workshops scattered throughout the Buenos Aires metropolitan area. The garments that emerge from these workshops are sold through the 8,000 stalls that the fair rents to thousands of manufacturers eager to showcase their creations. And, if we look at the distribution chain, the nearly 200 long-distance buses that arrive daily at La Salada transport clothing that is then resold throughout the country, including some 500 "saladitas" (small salads) that replicate the business model. As if this weren't enough, this economy has stimulated other activities, such as transportation, the sale of supplies for clothing production, street vending, real estate, and so on. It is therefore a gigantic economy that even generates more jobs than the formal clothing sector.
Informality and costs
The garments sold through La Salada are accessible because they are the fruit of an informal economy from start to finish, from production to the final consumer. This is the central feature of informality in this economy: noncompliance with a wide variety of regulations at both the production and distribution stages. Although the flat tax system is widespread, regulations related to workshop and business permits, worker registration, and safety measures are violated, and various types of taxes and fees are evaded. But it is precisely this noncompliance that allows costs to be reduced and transforms La Salada into an economy capable of offering affordable products. If all actors in this economy complied with all the required regulations, this fair would collapse.
Finally, before addressing government responses, I would like to address the criticism for which La Salada is often in the news: illegality. I've already mentioned that it's an informal economy, something no different from other sectors of the Argentine economy. But popular concern seems to go further and focus on "brand counterfeiting." In La Salada, half of the garments for sale display logos that violate the trademark law. The other half doesn't display counterfeit brands and therefore doesn't violate the law. What's more, many manufacturers have developed their own brands. But the idea of counterfeiting is also misleading, as in La Salada, very few garments are exactly the same as the original from a famous brand. The latter are garments whose value arises precisely from producing an exact replica, for example, an Argentine national team jersey. In the workshops I have visited, garments are designed according to various criteria, such as customer preferences, fabric availability, fashion trends, etc. Ultimately, counterfeiting manifests itself in the misuse of famous brand logos, which are added for one reason only: because people want them and buy them. Thus, the emphasis on the illegality of La Salada seems to be part of a double standard: illegality is denounced and "order" is demanded, while clothing with counterfeit logos is purchased at prices only possible if rules are broken.
Government responses
La Salada began to develop in the 1990s, fueled by a peg to the dollar that, while contributing to the dismantling of the national apparel industry, acted as a magnet for migrants from neighboring countries. Around 2001, unlike the formal economy, La Salada was experiencing its heyday. Over the years, this market became an effective refuge from the ups and downs of the formal economy: both those needing to generate income through production or resale, and an increasingly broad segment of the population seeking affordable clothing, flocked there.
From the 1990s until now, the government's response to this phenomenon has been based on the belief that a free market in La Salada will bring well-being and progress. This may seem paradoxical, but the Peronist, Cambiemos, or La Libertad Avanza administrations have not invested in formalization processes that take into account the entrepreneurial capabilities of thousands of entrepreneurs, the heterogeneity of the sector, or the reality of the business model that prevails in La Salada. No strategies have been developed, for example, aimed at the technological development of workshops, improving infrastructure, or creating special tax regimes. Far from solutions that tend toward formalization based on the valorization of the willingness to work and creativity in this sector, the free market has been chosen as a mechanism to correct the price of clothing, but also as a way to discipline a stigmatized sector of society.
Faith in the free market has been implemented in two ways. The first is through what we might call "strategic government tolerance," which consists of not enforcing the law in a variety of areas of this economy. National, provincial, and municipal governments have refused to control, carry out inspections, or apply regulations, believing that the market logic of La Salada would not only help them win elections but would also solve problems such as unemployment, access to clothing, or potential protests. Formalization, as a public policy strategy aimed at ensuring the exercise of rights and creating a more egalitarian society, has been perceived as an electoral risk rather than an opportunity. But this faith in the free market does not even include a minimal state, as the neoliberal creed proclaims. On the contrary, the economy of La Salada has embraced the informal and brutal side of the state to solve its problems, such as extortion for the purpose of raising funds for political campaigns.
Trade liberalization is the second form of this belief that the free market alone can solve the problem of access to clothing and informality in La Salada. Reducing import tariffs on clothing and footwear, fabrics, and yarns, as is currently the case, adds pressure to an economy that already operates with high levels of unpaid family labor, low skills, and intensive use of labor. The influx of imports is a poor solution for the simple reason that it penalizes an already vulnerable population.
Changing this landscape presents challenges that are not insurmountable. First, it is necessary to accept that all actors involved in this phenomenon have very little incentive to generate change. Refusing to control, supervise, and, ultimately, formalize this sector for electoral reasons should lead to a strategic vision that is also electorally profitable. This is a necessary step to modify the incentives of manufacturers and merchants who have little or no interest in promoting change; ultimately, their sources of income depend precisely on the possibility of breaking regulations. The same can be said of market owners whose business is renting out stalls to a legion of manufacturers in need of space to display their garments. Various state agencies, such as the police, also lack incentives, which have historically captured resources from this economy. The second challenge is a change of perspective: ensuring that political, business, and, why not, journalistic leaders can differentiate between criminals and an economic sector populated by entrepreneurs who, in an extremely hostile environment, manage to provide clothing for an entire country.
Sociologist and professor of Latin American Studies at the University of St. Gallen, Switzerland; author of The Clandestine Order: Politics, Security Forces, and Illegal Markets in Argentina
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