23 noviembre 2021

Urgent Demands of the Labor Market After Elections. Published on

The results of the mid-term elections revive the main criticism about the failure of the different governments and the current administration in last couple of years, and revalidate the need for reform that will make Argentina find the path to growth and prosperity.

Article by Julián A. de Diego published on on November 23, 2021

Nothing will be possible if we stick to the old recipes that have led to failure over and over again. Curiously enough, several of the new lawmakers from the opposition, such as Ricardo Lopez Murphy, José Luis Espert, Facundo Manes and Javier Milei, encourage reforming and shrinking the State, reformulating tax policy (substituting regressive taxes), and designing new labor laws based on the new models of industrial relations.

State policies on public security (including police prevention and the efficiency of the judicial and prison systems) and education, which essentially requires a digital learning revolution connecting students with the productive sector, are now urgent demands in an attempt to recover from the paralysis caused by the pandemic.

In times of selective reactivation of the economy and widespread uncertainty about what the future will look like, the Telework Act No. 27555 and its regulatory EO No. 27/2021 regain full force and relevance, especially now that companies are returning to the NEW NORMAL, which is so different from our life before March 20, 2020 when the pandemic struck and the Executive ordered lockdown [ASPO].

We can leave aside electoral promises, even though we should not forget them in order to demand results from our candidates, who should deliver on all the things they said they would do.

But in the short term, all the scenarios call for emergency measures for the labor market that are essential and can be summarized as follows:

  1. Welfare programs should be transformed into mixed education and training systems linked to job promotion mechanisms that attract the most vulnerable groups and provide them with effective and quality job opportunities;
  2. Labor and employment laws should be comprehensively reviewed, building on what has already been built, without regression or retaliation, associating human labor with new technologies, and especially offering incentives for hiring new workers with viable competitive costs;
  3. Reformulate payroll taxes, which are the highest in Latin America, both in terms of social security and the absurd application of Income Tax to wages and severance pay, thus reducing living income, and therefore shift the tax focus of the State;
  4. Eliminate Income Tax on pensions, which is actually confiscatory double taxation, because it affects the income of retired workers who no longer work and need to secure a decent standard of living and health care in a quite deficient public health system, with a deficient supply of medicines;
  5. Create once and for all the Termination and Unemployment Fund, to be funded by deriving existing contributions, such as the existing unemployment assistance scheme (National Unemployment Fund) and the family allowance system, which has surplus , ensuring collection of severance pay to all workers regardless of their employer’s financial situation by adding surcharges like in Brazil in case of employment termination without cause;
  6. Promote collective bargaining, in particular for the grassroots, in order to regulate industrial relations in each particular case with the use of the tools imposed by new technologies;
  7. Return to all forms of coordination between primary, secondary, and tertiary education with industries, businesses, services and new technologies, at the private, public or mixed sectors, such as dual education, IT training and apprenticeships, with the aim of ensuring students’ qualification and training, skills certification, and firmly condemning child labor and free employment of workers receiving government assistance;
  8. Establish special job promotion systems in all activities undergoing an economic growth process, in order to encourage hiring with competitive costs;
  9. Set out new guidelines to combat work off the books to put an end to the lawsuit industry that not only fails to resolve the underlying issue but also aggravates it with higher costs for companies;
  10. Finally, exponential technologies call for New Labor Laws in accordance with the new demands of entrepreneurs, incubators, and the special launch of exponential ventures.  

What the future will bring does not accept long wait, delay, unfulfilled promises or thinking processes that may take too long. On the contrary, considering the lost time, immediate actions are essential to reverse outdated systems, revitalize the market and boost growth, and put an end to counterproductive speculation with a corrupt system of welfare programs or protection mechanisms that mean higher costs for the community and hamper consumption.

The new legislators have the duty to lead this process of change, find a way out of prostration and decadence, and stand up to face all the challenges that can get us back on a path to progress, growth and prosperity.

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