President Javier Milei has successfully reduced inflation and poverty levels in Argentina, while also eradicating the budget deficit. However, the nation’s labour market remains entrenched in the crisis that he was elected to address. For a second consecutive year, the South American economy is experiencing growth; however, there is a decline in employment within the formal sector, characterised by salaried positions that include benefits and healthcare. Those job losses represent arguably the foremost threat to Milei’s re-election bid next year, with investors hoping Argentina’s political pendulum does not shift away from his pro-market approach. “What appears to be increasingly important is job creation, as surveys show this is becoming a key driver of consumer confidence,” said Pablo Goldberg. “Given this correlates with votes, the market will likely pay attention to this indicator.” Argentina has experienced a decline of 241,000 private-sector payroll jobs since Milei assumed office, representing a four percent reduction of the total workforce. Concurrently, his administration has reduced the number of state employees by 73,000, according to official figures. The number of private-sector employers has decreased to 482,000 companies, marking the lowest level since 2007, as reported by the think tank Fundar. Only one province – Neuquén, which is at the center of the nation’s energy boom – has seen an increase in businesses during Milei’s tenure. This suggests that workers are not moving from struggling sectors to more prosperous industries, according to findings from consulting firm Equilibra. “We’re living through a process that we can characterize as growth without quality job creation – jobless growth,” said Matías Maito. “The only thing that’s grown in the past two years is informal employment.”
Labour Secretary Julio Cordero did not provide a response to the interview request. For the past year, unemployment has surpassed inflation as the primary economic concern for voters, while Milei’s approval rating stands at 37 percent, approaching the lowest point of his presidency, as reported by LatAm Pulse. Part of the shift in concerns stems from Milei’s achievement in reducing inflation from triple-digit levels, and elevated unemployment does not necessarily deter voters. President Carlos Menem secured re-election in 1995 despite facing double-digit unemployment, following his successful battle against hyperinflation. However, Menem experienced annual inflation rates below two percent during his tenure; projections indicate that inflation for the upcoming year is expected to hover around 20 percent. As Milei’s policies mitigate price increases, they are concurrently contributing to certain job losses. His spending cuts, while essential, have led to a reduction in public works and an increase in utility bills, which in turn has resulted in fewer construction jobs, diminished disposable income, and lower consumer spending. With certain currency controls remaining in effect, a stronger exchange rate has rendered Argentine services, spanning technology to tourism, more costly. Milei’s measures to liberalise the economy and increase foreign competition have led to a moderation in prices; however, they have also adversely affected ageing industries. Even hiring in Argentina’s competitive sectors, from oil to mining to technology, is either down in the Milei era or flatlining, as indicated by government figures and industry reports.
Headcount at Patricio Pagani’s cloud services firm The Black Puma approximately increased its workforce to around 40 employees from the onset of the Covid-19 pandemic to the time of Milei’s Presidency. However, salaries in the private sector have doubled in dollar terms since the libertarian assumed office, thereby compressing Pagani’s margins. He is now seeking to expand his workforce in Brazil and establish a shop in Colombia, where labour costs are comparatively lower. So many experienced tech veterans are looking for work in Buenos Aires that Pagani, 48, isn’t even hiring for entry-level jobs anymore. “I see the high-skilled unemployment rate much higher than it was five years ago,” he said. “At this point, Argentina stopped being cost effective.” Unemployment in the formal economy has risen to 7.8 percent; however, this figure is obscured by a thriving informal labour market, which now constitutes 44 percent of the nation’s workforce. A study from Argentina’s UCA Catholic University revealed that workers across various education and income levels are increasingly engaged in off-the-books labour. However, economists interpret this trend as a last resort rather than a matter of choice. “Informality continues to be a second best to a salaried formal job,” though better than unemployment, said Roxana Maurizio. “At least in the big picture, it isn’t a desirable destination.”
Sergio Moreno oversaw the receipt of more than 3,500 applications for 700 positions this year at Fundación Oficios, the vocational training program he directs near Buenos Aires, which includes carpenters, electricians, and various other trades. That represents a 40 percent increase compared to the previous year, and Moreno has experienced an unprecedented volume of applications. He is constructing new classrooms in response to the increasing demand from working-class Argentines seeking employment, as many struggle to find sufficient work to meet their financial needs. “In moments of crisis, at least in Argentina, there’s a trend to go into informality because it’s cheaper, you don’t pay taxes,” Moreno said. “A lot of businesses have closed, and I’m not talking against or in favour of the government, it’s just a fact.” Rubén Barboza, 56, has faced unemployment since last November, following the closure of a furniture manufacturing firm that had previously employed him, a consequence of declining sales. The individual, previously employed in a factory, is currently participating in his second job-training program following his assertion that he submitted applications for 30 positions without receiving a single offer. He is currently relying on his wife’s income. “Working people I know, yes, inflation matters to them, but it matters less than having a job, making ends meet and putting food on the table,” said Barboza, who doesn’t support Milei. “It’s not just me. A lot of people aren’t making it to the end of the month.”
