Is Labour Reform Still In Argentina's Sights?
As Argentina tries to enact labour reform, it looks to its neighbour. Searching for improved competitiveness in 2017, Brazil enacted bold changes in labour legislation, looking to increase the freedom to employ and be hired on a contract basis - and putting Argentine companies on alert.
Labour costs are a major issue in Argentina, leading to much informal employment and instability in the market. The OECD's multi-dimensional economic survey, released in July 2017, praised Argentina for undertaking a bold turnaround in policies, helping to stabilise the economy and avoid another crisis. But it also urged the country to build on that progress to help lay the foundations for raising the material living standards and wellbeing of all Argentinians.
It was, however, interrupted by an election. Once the October elections were out of the way and a favourable outcome for the incumbent was secured, the government pressed on with its labour reform as 2017 came to a close.
Although Argentina's reform goes nowhere near as far as Brazil's, it still found significant objections from unions and some opposition members. Both parties argued that the approval of the reform under these conditions would imply the removal of rights and protection of Argentine workers, thus exacerbating labour relations, making terminations cheaper and generalising temporary employment.
On the other hand, local businessmen maintained that the proposed changes would facilitate an increase in formal employment. Moreover, they would also improve the sustainability of the system and the competitiveness of Argentine companies - all improvements which have been seen in Brazil.
Time for reform is still uncertain
In order to avoid increasing tension, the national government toned down its initial ambitions, changing several of the points contained in the initial version of the labour reform bill. It also...
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