With Strikes CGT Is Planning its Action within the Electoral Campaign

Everything is affected or tainted by the electoral year, and the Workers’ General Confederation (CGT) is likely to start designing its strategy for 2019 based on the needs of the different groups to which it is related in the political arena in the electoral campaign.

Published in El Cronista on February 19, 2019
Union leaders have been skillful at reaching out to other spheres that are alien to them, such as the legislature, governors’ and mayors’ campaigns, and the judiciary. At all levels, mayors and union representatives or supporters will back their candidates with strategic, logistic, financial and personal resources.

As it is known, CGT and Justicialist legislators firmly reject any initiative by the Executive in relation to the labor reform, so at least in Congress it is impossible to introduce any bill in this regard.

Collective bargaining begins in March and April, effective as from the second four-month period, and again rumor has it that a new bonus may be granted on account to mitigate the effects of inflation on the first quarter that will have a negative impact on the food basket.

Remember that with a few exceptions, pay rises were given in the second half of last year and increased according to revision clauses (before, escalator clauses) in January 2019 based on inflation rate or in installments. For 37% of the unions only, workers’ wages could keep pace with inflation; the rest of the unions managed to agree on a 34%-40% raise, below the INDEC CPI.

As a matter of fact, any average family used to need ARS 25,000 net for subsistence minimum and now they will need ARS 30,000 by midyear. There is a debt from the past in many collective bargaining agreements that failed to keep up with inflation in 2018, even with revision clauses.

Many unions will claim debt, like the teachers’ union. As per the widespread consensus among union leaders, no union will accept a minimum pay category under collective bargaining agreement below the value of the food basket. If the food basket in June or July is around ARS 30,000 net, the gross minimum amount under collective bargaining agreement will be around ARS 37,000. Even though these figures are aspirational, they follow a basic logic, under collective bargaining agreements wages cannot be below subsistence minimum, i.e. below the poverty line.

Ironically, the Adjustable Minimum Living Wage (ARS 11,300) is below the poverty level and is worth less than half of the food basket published by INDEC. This amount is allegedly the subsistence minimum to meet the needs of an average family.

At all levels the National Government has a lot on its plate. For CGT another bonus is unacceptable because at least in part it disrupts wage negotiation under collective bargaining, which will play a decisive role, as explained above.

Bills of labor reform have failed twice, and now they will face outright rejection if CGT asks legislators not to discuss them.

It is pretty unknown how the initiative may be brought without need for support by the opposition, but undoubtedly if the National Government wants to fulfill any goal, it will have to validate and legitimate the proposal on its own.

Finally, one of the key issues of the opposition campaign is the results of the economic policy and the targets set for inflation, fiscal deficit and economic reactivation. In this scenario, general strikes will return with a high-voltage political component in the search for widespread support and in particular trying to urge the rebellion of the middle classes that are still hesitating over their vote.

Labor disputes will haunt companies in crisis, in relation to terminal situations and the negotiation of collective bargaining agreements whereby wages can recover the losses from last year inflation rate and keep pace with inflation in 2019.

Considering the strike actions organized by CGT, strikes for layoffs, crises or wage negotiations, this will be a year with extremely high potential for conflict.

By Julian A. de Diego
Director of the postgraduate course on Human Resources at the School of Business at UCA.