15 diciembre 2021

Employment projections for 2022 will be crucial. Published on

Reconciling contradictions should be the main aim of the social policy if it is true that the National Government has the strong conviction that the creation of genuine, stable and quality employment is the great solution to all the problems and social conflicts that Argentina suffers.

Article by Julián A. de Diego published on on December 14, 2021

Growth and resources to attract investment will depend on exports, the value that can be added to them, and the unrestricted promotion of all activities that generate foreign exchange flow.

The growth of the economy -quite selective right now- shows that there are sectors that expect a broad reactivation and recovery, e.g. IT companies, agriculture, meat-packing, construction, organizations working remotely, food, tourism, logistics and delivery of merchandise.

Undoubtedly, the transversal use of exponential technologies constructs a new scenario for transport services, relocation, operational decentralization and de-bureaucratization, transforming the layout of the city and causing a revolution in communications, and especially, in how each individual does their job both as a freelancer and as an employee.

In this context, it is said that registered employment has already recovered its pre-pandemic levels, and work off the books or the underground economy is reaching the same rates. There are still some sectors left behind, which have not been reactivated yet, or whose business requires government aid, such as the oil and gas industry.

As to employee pay, social groups will be making strong claims by the end of the year, compelling companies to provide food boxes or Christmas gift baskets for seasonal holidays, and in those sectors that are performing better employees may be receiving year-end bonuses, such as workers from the Teamsters’ Union.

However, wage negotiation for 2022 will depend on price freeze and its implications for each sector of the economy. With a 33% inflation rate in the National Budget and a forecast of 60% or over by the most well-known economists (Broda, Cavallo, Melconian, Picardo, Cachanosky, Spotorno, Ferreres, Artana, Mondino and others), the traditional unions belonging to CGT [Workers’ General Confederation] are expected to be making similar claims like in 2021, in an attempt to keep up with inflation. Strictly speaking, more than half of unions have agreed on pay rises that are lagging well behind inflation rate by 4% – 20% depending on the industry, service or activity.

Considering that the future economic plan should observe clear rules without contradictions, promote confidence and cause all industries to return to reasonable levels of activity, it is particularly important to pay attention to the measures that the Executive will be taking in tax and social security matters, and especially in relation to the reform of the State, public spending and public deficit.

This is why the measures taken to promote regional activities and commodity exports will play an important role, particularly in relation to labor costs, which as we all know are the highest in Latin America. Furthermore, in some regions such as Patagonia, employees get hazard pay and are governed by collective bargaining agreements with higher costs than in the City of Buenos Aires or any provincial industrial plant in the Humid Pampas.

The CGT has tried to regroup all unionized sectors, in support of President Alberto Fernández, to develop a common strategy in terms of wages, economic policy, and what could happen within the Justicialist Party. Strictly speaking, it is the only backbone of the ruling party that somehow shows unity. That is why conflicts will be limited to the discussion about wages under collective bargaining agreements, and in companies undergoing crisis, financial problems or risking possible shutdowns.

A substantive labor reform is not expected to be made, as claimed by the entire opposition, even though the National Government will have to adapt Social Distancing (DISPO) restrictions according to the evolution of the pandemic and the new variants, which means that with a new surge in cases some restrictions will have to be imposed again, like during lockdown (ASPO). Then it is essential to intensify the vaccination campaign. And measures such as double severance pay (today with a cap of ARS 500,000), and the ban on employment termination and suspension for financial reasons, force majeure events or without fair cause, effective until December 31, 2021, need to be lifted. Everything shows that the process to leave these restrictions behind will be gradual and progressive all along 2022.

Another issue to bear in mind is the increasingly widespread enforcement of the Telework Act [Ley de Teletrabajo] while companies standardize their return to the New Normal. For the time being, any reference made by the law about how to treat these issues under collective bargaining agreement has not resonated yet.

In any case, companies are returning to a temporary, hybrid work model, whereby employees work remotely three days a week and two days in the office, with expense reimbursement and a change in working time schedules according to different work and monitoring systems.

In general the market shows that office buildings have been converted; large units are vacated and go unrented; office layout has been reshaped to accommodate common areas and unassigned workspaces, where employees who go to work in person use any available workstation according to the shift assigned by the employer. In other words, job creation will depend on the sustainability of the reactivation and transformation that the economy could undergo, in a context where inflation continues to be an ever-present haunting issue.

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