Labor reform: why it would be one of the most “popular” measures of the next government

The government of Fernando De la Rúa ended up falling when he attempted a labor reform. Mauricio Macri, with that background, tried to do it almost in secret. Obviously it also failed. The new presidential adviser to President Alberto Fernández, Antonio Aracre -an economist who comes from the private sector- also proposed a labor reform, and unionism jumped straight into his jugular vein after a few hours: the President ordered him to shut up immediately and he he had to humiliate himself by tweeting his regret publicly.

Argentina has a sacred cow and that is the labor reform

As in India, cows are gods and cannot be touched. Eating beef is equivalent in Hindu colloquial language to something as horrible as “eating the mother.”

Also read: Labor reform: the new presidential adviser touched the cable that electrocuted three presidents

The cows are skinny and hungry on the street, because nobody eats them, but nobody cares about fattening them either.

The analogy is sadly perfect: Argentina became a country of hunger, misery and hopelessness, with enormous lost opportunities, and that “sacred cow” of the labor reform is at the genesis of almost all the errors that led the country to be one from the richest in the world to becoming one of the most backward in the region.

Antonio Aracre had to go out to clarify his statements about a possible labor reform. (Photo: Twitter/@tonyaracre).

The Argentine economic failure lies in the fact that in the 40s a labor law was imposed that made it more expensive and too risky for SMEs to hire staff. SMEs represent 80 percent of private employment, and if that sector does not hire, the generation of jobs becomes almost completely dependent on the State. This is how, over the decades, private employment has been replaced with public employment and -since the Kirchner governments further aggravated labor legislation- with more and more social plans.

At this point, it is clear to the opposition that could take over the government in December that without reforming the Argentine labor system, it will not be able to advance on that inflated state until it bursts with unproductive public employment, which is the main cause of the fiscal deficit and inflation, and not It brought society neither better education, nor better public health nor more security, and it only caused poverty.

But how to sacrifice a cow as sacred as the labor reform with such a historical background without generating another political earthquake? Several trade unionists, piquetero leaders and some governors would automatically put out, as they did in the past, the cry in the sky: “they want to take away their rights from the workers.”

What the surveys say about the labor reform

Now a survey is showing that reforming Argentina’s ancient labor system could be much easier than opponents of Kirchnerism believe and that, correctly explained, this labor reform would be a much more popular measure than they imagine today.

FGA, the pollster for political consultant Federico González, messed with this sacred cow by asking questions in three different ways, doing a kind of “social experiment”, and obtained a surprising result:

Asking without giving details and in a neutral way “a labor reform is necessary for employers to hire more employees”, he obtains an interesting level of total and partial agreement of 62 percent. Asking from the point of view of trade unionism, the result is quite different: “A labor reform is an excuse to take away workers’ rights”: approval drops to 40 percent and rejection is 44 percent, but explaining the reform as it would be and without hiding anything, the surprise appears: “For generate more private employment, a labor reform should respect the acquired rights of current employees in a dependency relationship, but make the hiring conditions of new ones more flexible”. That option gets more than 70 percent approval and just 17 percent disagreement.

In fact, neither De la Rúa nor Macri could have changed the conditions of current white employees (who today do not even reach half of the economically active population) with their respective and frustrated labor reform proposals, simply because the Law of Employment Contract already says on your behalf that the dependency relationship is a “contract”. And the contracts must be respected and cannot be changed unilaterally by one of the parties, without the matter reaching the courts. In Latin: “Pacta sunt servanda”.

Assuming the strange case that a law had passed through Congress to “take away the rights” of workers who today are in a dependency relationship and blank, that legislation would never have passed the test of the Supreme Court. It wouldn’t make the slightest sense.

Why did De la Rúa and Macri fail?

Very simple: they were not well advised in terms of communication for a subject as sensitive as butchering that sacred cow that is labor laws.

The FGA survey shows once again that people understand much more than they suppose the “sacred laws” of political marketing. These maxims indicate that, if an issue is thorny because it has detractors who will fight for their interests at any cost, it is better to try to pass it without debating.

The various “bibles” of Argentine political marketing do not contemplate the possibility of debating any controversial issue in public opinion, even if they have the winning arguments to prevail in the debate.

The case of the labor reform is emblematic of that lack of courage to debate and to dare to lead public opinion on the part of Argentine politicians, even when the loudest voices are against it. The lack of communicational leadership of Argentine political leaders has been a constant throughout the 40 years of democracy.

The list of enemies of a labor reform is long

Unionists from the state sector saw their power increase to the detriment of unionists with more affiliates from the private sector, because the private economy is where less registered employment has been generated in recent decades.

Even so, unionists with a majority of affiliates from the private sector are also “culturally” opposed to a labor reform. The most emblematic case is that of the Moyano family. The trucking clan has a “blood mandate” against any labor flexibility. Hugo, the patriarch, was the cornerstone in denouncing the never-proven bribes in the Senate to approve De la Rúa’s labor reform. The truck driver coined the title of “La Banelco” that the Labor Minister of that government supposedly had to “convince” the Peronist senators.

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Moyano himself led the rejection of the proposal -already much less ambitious- of Mauricio Macri in 2018, and his son, Pablo, who inherited his father’s union while alive, was in charge of jumping Aracre, the adviser, through the jugular. president who committed the heresy of proposing a labor reform in a Kirchnerist government.

Today the piquetero leaders are adding to this opposition, who would see their business of handling the huge sums that the two million social plans leave them seriously limited. But, silently, several governors do not look at a labor reform with any affection, because in their “fiefdoms” they became practically the only employers, and thus they became owners of the work and the vote of their subjects. Santa Cruz and Formosa are not the only examples.

The general secretary of Truck Drivers, Hugo Moyano, and the assistant secretary, Pablo Moyano (Photo: DAMIAN DOPACIO).

But the opposition will have no choice but to address the issue by giving it another “communication turn” if it intends to overcome the economic backwardness quickly.

Today Argentina would have to have a million SMEs, to have an amount proportionally comparable to medium-development countries, such as Chile or Uruguay, but it has less than half, because the cost and occupational risk is the most important factor for companies girls.

The SME Observatory estimates that such a reform would generate more than two million jobs in the first year alone and would promote the creation of new SMEs, in a study requested by Monapy (National SME Movement).

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Just after unlocking the labor market, a future government could face a reform of the state and begin to solve the drama of inflation and the macroeconomic disaster in Argentina.

Brazilian Fernando Henrique Cardoso, a sociologist and writer adored by the Latin American left in the 1970s and 1980s, after turning pro-market, became economy minister and president. He was the father of the real and of the profound reforms that gave Brazil the economic stability it still enjoys today.

One of his head phrases to explain the success of his government was: “to govern is to explain.” Whoever intends to solve the Argentine economic drama must start with a labor reform. But this time he will have to explain it better, as Cardoso would recommend.