If something characterized the Argentine economy in recent decades, it was the permanent roller coaster dynamic in which it is immersed with increasing frequency. It is an incontrovertible fact that distorted many parameters and defense mechanisms of the economy. But the belief also spread that a bad season was just that and we would only have to wait for the economy to rebound to stabilize the affected variables. However, The structural damage intensified with each of these ups and downs.
Go up and down. According to an analysis by the economist Fernando Marull, In the last 54 years there have been 21 recessions (that is, two consecutive quarters of declines), which is one every 2.6 years. But since 2010, Argentine GDP has stagnated and recessions have become more frequent. So much so that stability, lost, appeared on the horizon as a goal in itself. “But stability may be insufficient for growth. Argentine economic history offers enough examples of periods of relative calm, based on a certain macroeconomic stability, that did not lead to sustained growth.points out the IAE Business School professor, Lucas Pussetto. In his opinion, short-term growth (for a couple of years) can arise from the recovery of idle capacity, the normalization of expectations or the recomposition of consumption. Instead, the Long-term growth requires deeper transformations, linked to capital accumulation and increased productivity.. Also, since the drivers of sustained growth are no longer a mystery, the economies that manage to maintain trajectories of prolonged expansion do so because they generate an environment where private investment finds incentives to innovate, employ and scale production.
It is also worth noting that productivity increases when technology is incorporated (a key aspect in times of AI), labor informality is reduced, competition is promoted and resources are reallocated towards more efficient sectors. “Sorting the accounts does not guarantee this process, but it does provide predictability; and in that framework, improvements in investment and productivity are much more likely”concludes Pussetto.
Labor impact. By linking the need to implement changes to provide sustainability to a program that only regained oxygen with the October election results, the Government proposed to undertake three reforms that it considers essential to lay the foundations for sustained growth: labor, tax and pensions. With them or at least with what it can achieve in the legislative negotiations, it seeks to eliminate the specter of the projection of a chronic fiscal deficit when the political equation or the pressures from the sectors (and jurisdictions) that have been suffering from the pruning of spending change.
In the case of the proclaimed need to reform the legal framework of labor, the objective is to change the composition of the market, which was gradually deteriorating until almost half of the workforce is informal or precarious. Jorge Vasconceloschief economist of the IERALpoints out that the key to the new regulations in the labor, tax and pension order is that they are designed as embedded pieces, although they are not approved at the same time. “There should be no prejudices, since it is increasingly evident that the lack of these reforms (along with inconsistent macro policies) is what explains Argentina’s stagnation compared to the rest of the region”he adds. At the same time, it highlights that not all the situation affects all provinces equally. With formal private employment stagnating at 6 million workers nationwide, there is a marked asymmetry in the participation of private employment in relation to the population of each province. Thus, while in Formosa and Santiago del Estero there are less than 50 private jobs per 1,000 inhabitants, there are provinces such as Tucumán and Buenos Aires, in which this ratio is between 90 and 110.while Córdoba, Santa Fé, Neuquén and CABA are in a range of more than 130 private jobs per 1,000 inhabitants.
Another worrying indicator is the growing labor conflict shown in the number of lawsuits that are accumulating and that in some way shows the rigidity of the Argentine labor market. According to an analysis by the consulting firm Empiria on official data, last July they had accumulated 305,595 unresolved cases initiated. “High litigation makes formal hiring more expensive and discourages, and ends up expelling workers into informality and self-employment (de facto flexibility),” they detail.
Jorge Colina, IDESA economist, also observes that the labor market in Argentina is in deep deterioration and shows it with data. More than half of the workers (52%) are informal or self-employed, in low-productivity occupations and with incomes that represent, on average, half of what those who have a formal job receive. Only 31% of the workforce has a registered private job, the remaining 17% works in the public sector and 22% of people of working age do not participate in the market: they do not have a job nor are they looking for one.
“What is relevant is that not even in the years of strong economic expansion, such as those of the first decade of the period, was it possible to reverse this dynamic. Growth allowed employment to increase, but did not change its structural composition,” he explains. Informality remained high, public employment functioned as containment, and self-employment grew more due to lack of alternatives than due to entrepreneurial dynamism. “These data clearly show that growth, by itself, does not solve the employment problem in Argentina. Without profound reforms in the productive structure, education and the institutional framework that regulates work, quality employment will continue to be a scarce commodity, even when the economy grows,” he concludes.
All these views converge on a knot that until now was difficult to untie: labor reform appears as an important piece within a broader package of transformations: necessary but insufficient on its own.
The salary. In the latest INDEC report on the evolution of salaries that analyzes Nadin Argañarazpresident of IARAF, marks a plateau, but with heterogeneity: registered private salaries (+1.4%) grew less than monthly inflation (+2.1%) and in the public sector it grew by 1.1% nominally. In year-on-year terms, inflation was 31.8% and if the real year-on-year variation in salaries is considered, there is an increase in the public sector (+2.5%) and an increase in the registered private sector (0.9%). On the other hand, if the partial real variation in salaries in the first nine months of 2025 is considered, there is an increase in the public sector of +5.5% (-18.9% compared to 2023) and an increase in the registered private sector of +7.1% (-2.7% compared to 2023). “If these real levels are maintained during the rest of the year, annual registered private salaries could end the year with a real growth of 5.0% and public salaries with 4.3%,” projects.
With inflation unlikely to break through the 2% floor again, as was the intention of the economic team before the dollar rally in the third quarter, the recovery of real wages will be more subject to the performance of certain sectors (mining or energy, for example) than to a general improvement. It is the burden that inhibits the market from its greatest virtue, which is to facilitate the creation of senior jobs in good times and cushion conflicts in the inevitable lean years. The resulting, slow but inexorable, is the gradual slowdown and even greater precariousness of an increasingly smaller space.
by Tristán Rodríguez Loredo
