Worker in functions.
The national government took a further step towards deregulating the economy. In line with the RIGI and the policies being developed in the Ministry of Deregulation and State Transformation, Federico Sturzenegger's portfolio refined the details and the labor legislation that came in the package of the Bases Law came into force.
Initially, under the title of promotion of registered employment, a scheme similar to that of the laundering of capital was advanced, allowing employers to regularize the labor situation of workers who were hired before July 8, at a cost ranging from 10% to 30% of the total social security debts, depending on the type of company, thus seeking to reintegrate millions of people who had been left out due to regulations from the last century.
According to CIPPEC, 46% of Argentine workers are developing informally.
The opportunity costs generated by an informal labor market are enormous; the billions of pesos lost in collection mean that the tax burden is greater for current taxpayers. Let us bear in mind that the more taxpayers we have, the lower the cost of the state will be for each one. Let's use the example of dividing the cost of a cake: the cost of an eighty-peso cake for one person is not the same as the cost of those eighty pesos divided among eight. That is why this entry of millions of people into the system is important.
On the other hand, the financial system is waiting for these potential clients who could have a significant impact on a sector that has been experiencing a demand for pesos that it hasn't seen in many years; a green signal for the economy.
Secondly, the title of labor modernization, the most ambitious of the two and from which the most results are expected, seeks to strongly deregulate the labor market with the following points:
1. Simplification of labor registration: The time and bureaucracy involved in the process is reduced, allowing registration via the Internet.
2. Increase in the probation period: Between 6 months to 1 year, depending on the number of employees the company has.
3. Blockades and occupations as grounds for dismissal: It seeks to eliminate criminal protest methods practiced by some unions.
4. Termination fund: Replaces indemnity and will provide greater predictability for companies in decision-making.
The last point is the most interesting, as it will function as a driver for the economy, injecting money into the capital market, money that will serve for financing investment projects instead of being unproductive money, as indemnities once were.
The national government expects these measures to continue promoting Argentina as an attractive destination for investments. They are no longer just offering tax benefits but also legal security and a competitive labor market with valuable human capital that provides companies with greater predictability and workers with more opportunities when it comes to finding employment.
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