Labor informality is one of the main liabilities of the Argentine economy. According to the latest data from INDEC, 43.2% of workers are the main liability of Argentina’s economy. laborer He works without donations or social coverage. This is the highest figure since 2008 and reflects that six in 10 young people and three in 10 adults are not registered. In this regard, the government is promoting: Work style reform reduce informality, employment Blank.
Flexibility does not mean a ‘rollback’ of rights, but is intended to foster sustainable job creation. The challenges are enormous, but necessary to foster economic growth.
Argentina’s labor market has a weak ability to create registered employment even during periods of expansion; structural factors. among them, High tax pressure: Argentina is one of the three countries with the highest tax burden on employment. Personal and employer contributions account for 34.6% of total labor costs, compared to the average for OECD countries of 21.6%. In other words, using white goods costs almost 60% more than in developed countries.
This difference further increases the costs of lack of regulatory predictability and disputes between parties. This discourages formal employment and encourages small and medium-sized enterprises, which are the main job creators, to operate informally or under more flexible systems. The result is Dual market: Registered minorities support the rest of the economy, but they have a negative impact on productivity, incomes, and system stability.
of Regional inequalities exacerbate the problem. Patagonia has the lowest percentage of black workers, while the northwest and northeast have levels above 48%. At sector level, the most affected sectors are construction and domestic work, where three out of four employees lack contribution.
Impact on pension system
The increase in the number of dictators reflects: “Secret” informality. Over the past 13 years, this category has increased by 65%, while registered private employment has increased by only 3%. Of the 2 million new formal positions created during this period, 85% were in the public and exclusive sectors, and only 9% in the private sector.
This structure not only puts pressure on finances, but also yesYoprediction system,but also, Worrying trends: Job creation is concentrated in more precarious means or in those with a lower contribution. It takes 27 monopolists to match dependent worker contributions, and the income of those enrolled only covers 70% of their retirement benefits.
A combination of low productivity, high tax burdens and regional disparities forms the core of the structural problem. Solving this problem requires not only legal reform, but also changes in economic incentives that allow companies to grow and hire blanks without imposing unsustainable additional costs. This leads to a decline in competitiveness for companies.
In addition to being limited by the structural factors mentioned above, formal job creation also depends on the pace of economic growth and the extent to which this growth is reflected in new jobs. The latter is known as the employment-GDP elasticity.
In economies like Argentina, registered employment is less sensitive to products in the short run, but jobs become more cyclical in the long run. Sustained expansion of activity accelerates recruitment and strengthens the relationship between growth and work.
A practical example to illustrate this is: If the economy grew by 4% in the first year, 3.5% in the second year, and 3% in the next three years, with an elasticity between 0.4 and 0.75, more than 1.1 million new jobs would be created over five years. The response will be moderate in the first few years (1.2-1.6% per year), but as the expansion strengthens, job creation could double.
This could improve the creation of genuine jobs
Sectors with the potential to create real jobs
This behavior indicates that For reforms to show real results, they need to be accompanied by sustained growth. Even if it expands slowly, Argentina’s economy could consistently create empty jobs again.
The success of modernizing the workforce ultimately depends on the contribution of different sectors to increasing the number of white-collar jobs. Construction, agribusiness, energy, the knowledge economy, and manufacturing can thrive with the right incentives. Up to 250,000 new positions will be created each year.
What each field can contribute
In other words, labor reform should be understood as follows. Tools to facilitate investment and formalizationNot as a setback of political goals or rights.
At stake is the possibility of structural changes that could rebuild the foundations of public labor and envision a more prosperous Argentina, in the nexus between reform, growth and jobs.
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