The labour reform initiative advocated by President Javier Milei’s administration was framed as a mechanism to stimulate the hiring of registered employees. However, preliminary data following the bill’s approval and enactment indicates a decrease in formal employment, an increase in informal jobs, and the shutdown of additional private enterprises. Deregulation & State Transformation Minister Federico Sturzenegger has acknowledged his dissatisfaction with the business community’s reaction to the approved changes. Law 27,802, known as Milei’s “Labour Modernisation Law,” received approval last March. Since then, registered jobs have decreased by 0.9 percent, according to the data. In June of last year, the proportion of newly hired workers constituted a mere 1.6 percent of the total employed, marking the lowest rate on record. Last August, the indicator exhibited a rebound, attaining 1.8 percent, as per Labour Department data, yet it remains beneath the two percent recorded in February prior to the approval of the reform.
Furthermore, the INDEC national statistics bureau has recently released data indicating that informal employment rose by 1.8 percentage points, reaching 45 percent of the total workforce between the second quarter of 2025 and the corresponding period this year. A report highlights that registered private-sector employment has experienced a decline for 13 consecutive months. Since the commencement of the Milei administration in December 2023, the total job loss has amounted to 241,200 positions. Simultaneously, more than six million individuals are engaged in informal employment, with an estimated 348,000 such positions created in the previous year, predominantly among the self-employed, according to the IAG. The IAG experts concluded that the measures included in the reform, such as extended trial periods and the hours bank, do not appear to have achieved the goal of promoting formal hiring, according to the institute’s report.
For Sturzenegger, the brains behind the reform push, firms and employers are to blame. “I’m not happy with the business response to the labour reform,” he said in a recent interview. He also expressed regret regarding the “ultra-actividad” mechanism, which allows the clauses of a collective bargaining agreement to remain in effect beyond their expiration dates, until a new agreement is established. “Now all the agreements signed are the same because nobody wants to fight, everybody wants the state to solve the problem for you,” he complained. Sturzenegger also highlighted the significant transformations in the labour market resulting from the Covid-19 pandemic. “The labour market has changed and many people opt for much more flexible systems,” he observed. Argentina is currently facing a rise in unemployment rates. In the second quarter of this year, the rate reached 7.9 percent, as against the 7.6 percent registered in the same period last year, according to INDEC data.
Unemployment increased in the last quarter, according to INDEC, reaching its highest level since Milei assumed office in the Casa Rosada. In the private sector, formal employment has also experienced a decline, as indicated by a report from the Instituto Interdisciplinario de Economía Política think tank. It recorded a loss of 12,700 jobs in the last quarter analysed, representing a decline of 0.2 percent. Since November 2023, the sector has experienced a decline of approximately 266,000 jobs, representing a decrease of 4.2 percent. According to the study, the number of workers has returned to levels comparable to those observed in May 2014.
