[Argentina] Push to move welfare recipients from cash jobs onto payroll

In Argentina a new job market programme aimed at addressing informal labour will be introduced in an attempt to lower government spending, Buenos Aires Times reports.

On August 30 a government decree created the “puente” - or bridge programme - by which social welfare recipients can continue to receive their handouts for a year after starting a formal, payroll job. The government will also cover all employer contributions during that period. The policy aims to target welfare recipients who opt for informal, all-cash jobs to avoid losing government benefits and persuade them to stay in the system. 

The measure reportedly comes as Argentina’s labour market diverges from its social outlook, highlighting deepening inequality. The unemployment rate in the formal job market is down to its lowest level since 2015 yet poverty is expected to rise this year as low-wage, informal workers outside the traditional labour market have their incomes wiped out by inflation soaring above 70 per cent.

It also comes at a time when the country is seeking to cut overall government spending to comply with a US$44-billion programme with the International Monetary Fund that calls for a primary fiscal deficit of 2.5 per cent. Social assistance programmes are expected to top 2.6 trillion pesos (US$18.8 billion) this year, according to Argentina’s most recent IMF review.

The most recent report on the subject from the UN-backed International Labor Organization reveals that more than 80 per cent of the new jobs created post-pandemic in Argentina have been informal. 

Countries such as Argentina across Latin America have spent decades dealing with high levels of all-cash jobs where workers don’t pay income taxes, don’t have healthcare and are more likely to receive social welfare payments. The pandemic reportedly exacerbated that trend as companies closed and others opted for freelancers amid high volatility. 

Argentina banned companies from firing workers for about two years and the measure shielded some jobs but it also contributed to a surge of informal work. Between the private and public sectors combined, the country now has around the same amount of salaried payroll jobs as informal, all-cash gigs.

Source: Buenos Aires Times

In Argentina a new job market programme aimed at addressing informal labour will be introduced in an attempt to lower government spending, Buenos Aires Times reports.

On August 30 a government decree created the “puente” - or bridge programme - by which social welfare recipients can continue to receive their handouts for a year after starting a formal, payroll job. The government will also cover all employer contributions during that period. The policy aims to target welfare recipients who opt for informal, all-cash jobs to avoid losing government benefits and persuade them to stay in the system. 

The measure reportedly comes as Argentina’s labour market diverges from its social outlook, highlighting deepening inequality. The unemployment rate in the formal job market is down to its lowest level since 2015 yet poverty is expected to rise this year as low-wage, informal workers outside the traditional labour market have their incomes wiped out by inflation soaring above 70 per cent.

It also comes at a time when the country is seeking to cut overall government spending to comply with a US$44-billion programme with the International Monetary Fund that calls for a primary fiscal deficit of 2.5 per cent. Social assistance programmes are expected to top 2.6 trillion pesos (US$18.8 billion) this year, according to Argentina’s most recent IMF review.

The most recent report on the subject from the UN-backed International Labor Organization reveals that more than 80 per cent of the new jobs created post-pandemic in Argentina have been informal. 

Countries such as Argentina across Latin America have spent decades dealing with high levels of all-cash jobs where workers don’t pay income taxes, don’t have healthcare and are more likely to receive social welfare payments. The pandemic reportedly exacerbated that trend as companies closed and others opted for freelancers amid high volatility. 

Argentina banned companies from firing workers for about two years and the measure shielded some jobs but it also contributed to a surge of informal work. Between the private and public sectors combined, the country now has around the same amount of salaried payroll jobs as informal, all-cash gigs.

Source: Buenos Aires Times