Labor market dualism—the segmentation of workers between formal, legally protected employment and informal, unprotected status—has long drawn attention from scholars and policymakers in Latin America. This article argues that lasting patterns of economic and political segmentation of workers arose earlier in the region's history than has previously been understood, well before the classic “incorporation” period. Late‐nineteenth‐century practices for the recruitment and retention of workers shaped Latin America's first sets of labor laws, most notably those governing union organization and individual worker job stability. Subsequently, these first laws served as important templates for development, constraining and conditioning the labor codes adopted under mass‐based politics. Using historical data drawn from Chile, Peru, and Argentina, this article shows how differing recruitment practices and variation in the extension of effective suffrage rights and electoral participation shaped early legal labor market segmentation and inequality in Latin America.