The stagnation of the Argentine labor market is a problem that affects us all. With a high rate of informality and persistent barriers to entry, the urgency of reform is imposed. However, the way forward is not confrontation, but rather the joint construction of a system that works for both the company and the worker. The key is to give the law a new spirit: the massive creation of registered opportunities.
The primary objective of any legislative change must be purely pragmatic: increase the number of formal workers. Today, this need becomes critical when informality exceeds 43% of the active population. The data is devastating: informality hits youth hardest, reaching almost six out of every ten young people under 29 years of age, and translates directly into poverty, since 42% of informal workers live in poor homes. This shows that the law must stop being a risk factor for the employer and become a clear incentive for hiring. We need a framework that drastically reduces uncertainty, encouraging companies to expand their payroll and actively incorporate those who are currently outside the formal circuit, as well as for the judiciary to be able to resolve conflicts and protect the constitutional rights and guarantees of citizens with speed and responsibility, prioritizing equal opportunities.
However, No reform will be sustainable if it is not accompanied by a training strategy for employability and competitiveness. The country’s productivity depends, to a large extent, on young people acquiring the skills that the current labor market demands: critical thinking, teamwork, communication, technology and adaptability. Training them not only expands their opportunities for formal insertion, but also enhances the competitiveness of companies and the production system as a whole.
In this sense, There are models that are already demonstrating positive resultssuch as the programs that are developed within the companies themselves. This modality
(implemented by organizations such as Fundación Pescar) allows young people to learn in direct contact with the world of work, incorporate real work habits and build contact networks that often become their first employment opportunities. In addition, company employees actively participate as volunteers and mentors, generating significant links and breaking down symbolic barriers between young people and companies.
The transformative thing about this experience is that The majority of these young people come from families where informal work predominatesso your time in a formal company not only impacts your personal development, but also your environment. When a young person learns up close how an organization works, the dynamics of compliance, teamwork and the possibility of growth, that learning expands: It translates into new aspirations, a different understanding of the value of registered employment and, many times, a change of horizon for the entire family..
The results of the Training and Insertion Programs (PFI) of the Pescar Foundation confirm the impact of this model: 84% job placement, 92% school completion and 70% educational continuity. Behind each number there is a young man who managed to integrate into formal work, a family that improved its perspective and a community that is beginning to break the circle of informality.
A forward-looking reform must have as its central spirit the creation of opportunities and investment in human capital, benefiting the efficiency of the system as a whole. This implies providing the market with the security and legal predictability that companies need to invest. SMEs, which represent 99.3% of employing firms and support close to 50% of registered employment, are the key driver for formalization. However, if the labor cost is up to 40% higher than the out-of-pocket salary, the current law becomes an unsustainable barrier.
Finally, system sustainability requires adaptability. Economic and technological dynamism requires legislation that does not petrify. The law must establish an umbrella of general protection, but with the intelligence of allowing social actors (employers and workers) to find, through consensus and negotiation, the most appropriate solutions to the particularities of each sector and economic moment. It is also necessary to have a judiciary and a supreme court with honest judges to guarantee the supremacy of the constitution in these matters.
True reform will not only be legal, but also cultural and educational. The formalization of employment must be understood as an act of justice and as the only viable path towards a more competitive, inclusive and sustainable economy. It is time to lay the foundations for a system where access to formal work is the natural driver of shared prosperity.
*Silvia Rueda Uranga is general director of Fundación Pescar Argentina.
by Silvia Uranga
