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Libertarian interventions in the Argentine labor market (second part)

Libertarian interventions in the Argentine labor market (second part)

Today there is a marked difference between the evolution of wages and inflation. According to a survey of Marina Dal Pogetto From 2018 to 2023 the salary rose 13 times, while the prices of goods and services rose 15 times.

Likewise, to analyze the last months, we can point out that the salaries of formal workers accumulated a 17% drop in purchasing power (that is, the prices of goods and services increased more than salaries). In relation to the above, on May 11 of this year a survey was published by the consulting firm Circuitos where 90.4% of those interviewed demanded that salaries equal or beat the price increase. This shows that the climate “on the street” is univocal and the clamor is noticeable, regarding the notable wage delay in the Argentine labor market.

What were the interventions carried out by the current government

  • Intervention on free salary negotiations

The interesting thing about the issue is that within a political paradigm installed by the Government where “the market is perfect” according to our President, that is, where supply and demand negotiate freely until reaching an equilibrium price, the Secretary of Labor of the Nation It refused to approve a joint venture (Truckers Union) and put pressure on others (Oil Workers) because it considered the negotiated values ​​high and above inflation.

That is, the joint venture is the place where the working party (represented by the Union or group of Unions with union status grouped in a Union or Federation) negotiate freely with the employing party (represented by one or more chambers of the sector) until an agreement is reached that includes salary values, bonuses, additional benefits, working conditions, etc.

This area was intervened by the Government for the purposes of setting maximum prices, tending downwards above what was negotiated.

The truth then is that the negotiation is not as free as it seems, because despite the parties having agreed, the State, through the Ministry of Labor of the Nation, intervenes to stop said agreements.

  • Intervention on the price of the minimum wage (SMVM)

We cannot ignore the price of the Minimum Living and Mobile Wage that is set by the National Council of Employment, Productivity and the Minimum, Vital and Mobile Wagewhich also depends on the Secretary of Labor of the Nation and it has an impact on a lot of benefits that take this value as a reference (it serves as a witness value to define some social benefits such as the Empower Work or the Progresar scholarships, as well as the limits for the payment of Income Tax).

In this particular case, in December 2023 it was $156,000 and by May 1, 2024 it reached the sum of $234,315, this means that it had an increase of 50.2%, while INDEC inflation for the same period it was 107.04%. That is to say, the state intervention on the price of the minimum wage was more violent, since It took away 57.02% of its purchasing power in the same respect to inflationary evolution.

Consequences for workers

Libertarian interventions in the Argentine labor market present a panorama of chiaroscuro. Well, on the one hand, they release (in whole or in part) the rest of the prices of the national economy (food, education, energy, fuel, prepaid medicine), while keeping the salary price capped.

This has as a necessary consequence a poorer working class and a more disparate society with greater concentration of economic capital in the hands of increasingly few. The consequences of the worsening of these policies will be greater poverty, greater exclusion, lower consumption, greater recession, further factory closures and mass layoffs.

It remains to analyze possible adjustments and alternatives to current policies, perhaps the labor reform – currently being processed in the Senate – seeking a balance that favors both economic growth and the well-being of Argentine workers.

Nahuel Altieri is a lawyer, President of Abogados del Fuero and professor of Labor Law at the Faculty of Law of the University of Buenos Aires.

Source: Ambito

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