Report Nº: 111430/03/2025
The unemployment rate remained relatively stable, but this is due to lower quality jobs than to job growth. This fact shows that the most important thing is to speed up the structural reforms. In the case of jobs, it means the modernization of labor institutions.
In the 4th quarter of 2024, there was an increase in labor participation and a slight increase in employment, which was insufficient to absorb the growth of labor participation. Compared to the last quarter of 2023 labor participation grew by about 250 thousand people. On the employment side, registered salaried workers fell by 200 thousand people, unregistered salaried workers remained stable and self-employed workers increased by 300 thousand people. Thus, employment increased by 100 thousand people due to self-employment and unemployment rose by 150 thousand people.
Although the number of unemployed increased, the unemployment rate remained at a relatively low level, going from 5.7% to 6.4% between the 4th quarter of 2023 and 2024. This is not in line with the perception of most people that employment problems are serious and growing.
The question is whether there is indeed a lack of employment. According to INDEC data, between the 4th quarter of 2024 and the same period of the previous year, it is observed that:
These data show that the lack of employment is not so much reflected in unemployed people as in people who are employed and need more work but cannot find it. Among the people who claim to need to work, the growth in the number of employed and available job seekers is double that of the unemployed. If we add that among the jobs that have increased is self-employment, it can be concluded that the employment problem in Argentina is more of quality (precarious and poorly paid jobs) than of quantity.
The reason for low unemployment, even in times of crisis, is the strong expansion of self-employment. When a person is unable to find a job in a formal company, he or she generally resorts to self-employment. This type of labor insertion is facilitated by new technologies. He uses his car to transport people, his motorcycle or bicycle to make deliveries or sell products through social networks. The loss of good quality jobs (formal salaried workers) is compensated by the increase in self-employment.
Digital platforms are a quick source of labor for both people who are out of work and those who want to enter from inactivity. But if there were better labor institutions, many could get better quality jobs. So far there have been partial advances in eliminating some of the most severe distortions of labor legislation, such as the multiplication of severance pay. However, obsolete regulations and bad practices within the labor justice are still in force.
To promote more quality jobs generation, a comprehensive reform in labor regulations is not necessary. Three specific changes could have a strong impact: allowing SMEs to disengage from sectorial collective bargaining agreements, reducing wage taxes in SMEs by establishing a non-taxable minimum on the wage bill for employer contributions, and getting the provincial judiciaries to incorporate medical experts to evaluate labor accidents and sickness lawsuits.
The loss of reserves of the Central Bank warns of a new storm front. Expectations are placed on the agreement with the IMF and specifically on the amount of financing and the new exchange rate rule. However, more decisive is a comprehensive process of structural reforms. For this, the will of the national government alone is not enough. It requires the support of Congress, provincial governors and the provincial judiciaries.
