The urban poor were concentrated among the unemployed, those working in the informal sector of the economy, unskilled laborers, and retired persons. Official unemployment figures for Montevideo fluctuated from around 8 percent to 15 percent in the 1980s. Estimates of the proportion of the labor force in the informal sector were, by definition, hard to find. But the proportion has certainly been rising since the 1960s. At the height of the building boom of the late 1970s and early 1980s, about 6 percent of the labor force was employed in construction, a highly cyclical (and thus unstable) source of jobs. In addition, the real value of state pensions was severely eroded in the 1960s and 1970s, leading to widespread misery among the elderly.

Since 1985 the level of unemployment has remained below 10 percent in Montevideo, and the government has made modest efforts to restore some of the erosion in the real value of pensions (see The Sanguinetti Government , ch. 3). However, the informal sector of the economy has continued to grow.

Data as of December 1990