Warren Buffett, one of the world’s most renowned billionaire financiers, famously declared in 2011: “Of course there is a class struggle, but it is my class - the rich class - that is waging this war. And we are winning it.” The labour reform bill promoted by the Argentine Executive Branch is proof of this. It is not something new, much less something modern as it is claimed, but rather another link in a chain that seeks to drag labour relations back to the 19th century in order to subject the workforce to the dictates of the capitalist class.

Specifically, the bill currently being debated in Parliament follows the path set by the Decree of Necessity and Urgency of December 2023 and Law No. 27,742 of last year (the “Bases” law). The objectives are clear: to reduce wage and non-wage compensation linked to the employment contract, dismantling the benefits created to protect the working class in the asymmetrical labour relationship between capital and labour.

This asymmetry is evident and widely recognized. Those who demand market labour have greater freedom and power, as they possess capital or income to cover their expenses (and can also hire others if they wish). In contrast, those who offer their labour have no choice because market employment is the only way to earn a living, unless they engage in criminal activities (which, incidentally, tend to thrive where this asymmetry is most pronounced). It is often said that the time spent in market employment is “exploitation,” while the rest is “free time.” Therefore, labour regulations that aim to increase people’s real freedom should increase the power and free time of the most vulnerable group.

This asymmetry is key to understanding the likely effects of this project if it becomes law. Under the false guise of greater “freedom,” the rhythm of the daily workday is allowed to be “agreed upon,” enabling a kind of “bank of hours” that, based on an annual amount and breaks between shifts, would allow for extending the daily schedule without overtime pay and establishing the distribution of vacation time.

Given the power imbalance between the contracting parties, this will allow employers to manage the workforce’s time according to their interests (and will very likely reduce total compensation without hiring new workers). It will also increase the workload for employees and make it more difficult to balance their work time with their personal lives in other areas, such as home and community life. In this scenario, both employed and unemployed people will share certain characteristics: exhaustion, anxiety, stress, frustration, and unstable lives.

“...these reforms imply less protection for the working class in their jobs, lower wages, a shift in costs from employers to workers and society as a whole, and a significant reduction in the bargaining power of workers.”

Similarly, repealing the Teleworking Law would create a legal vacuum regarding aspects not currently regulated, reducing costs without compensation or protections for workers. This would reinforce the non-employment status of so-called platform work, and the employment relationship would be masked by the supposed obligation to provide employees with accident insurance: the responsibility for providing this insurance, and the associated costs, would be subject to “free agreement” between the parties involved. In other words, by not establishing exclusive responsibility for either party, the employer will neither pay for it nor bear any responsibility.

To make matters worse, the so-called Labor Assistance Fund (FAL) would be created, its acronym a clear symbol of its purpose. The FAL would be funded by a monthly employer contribution of 3% of total payroll. However, since the rate of social security contributions would be reduced by a similar percentage at the same time, there would be a cost for those who laid off staff. Furthermore, employers would also see their contributions to social security funds reduced from 6% to 5%.

In this way, with this weapon, the State would fully subsidize dismissals without cause and further defund social security, which is already suffering severe budget cuts. Argentina would thus become a country with no restrictions or costs for dismissing employees, while continuing to promote the decline of the public social security and healthcare systems.

The above is reinforced by other measures to further weaken the workforce. For example, participation in blockades or takeovers of establishments is included as grounds for justified dismissal (i.e., without severance pay). Collective bargaining agreements are also weakened, as lower-level agreements (regional, company-level) will prevail over higher-level agreements (industry, regional). This is reinforced by the promotion of company-level unions and the declaration that deducting union dues from wages is not mandatory. Furthermore, the probationary period is extended from three to six months, and the notice period for those in this situation is eliminated.

“It’s not wrong to make labour practices more flexible to adapt them to new technologies; what’s wrong is doing it for the exclusive benefit of capital.”

To make matters worse, there is continued pressure to limit the right to strike. Among other things, coverage of 75% of benefits must be guaranteed in services considered “essential,” for which a long list of activities has been added. Thus, in addition to telecommunications, commercial aviation, childcare and educational services, and waste collection, activities such as pharmaceutical production, the rest of the transportation sector, the entire food industry and its value chain, banking, financial, and hotel services, and other activities related to export commitments are now included.

In summary, the proposed reforms imply less job security for the working class, lower wages, and a shift in costs from employers to the workforce and society as a whole. They also entail a significant reduction in the bargaining power and ability of the workforce to fight for its rights, making layoffs easier and leading to greater job and income instability. This labour reform would further blur the lines between formal and informal employment, especially given the current recession and falling demand in the country: instead of formalizing informal employment, it will likely further informalize the already limited formal employment available.

This regression in labour rights is neither modern nor does it contribute to greater productivity in the economic system; rather, it deepens the power imbalance in a highly conflictive social relationship that is crucial for economic efficiency. In this way, it runs counter to historical trends. Capitalist democratic systems have traditionally addressed the power imbalance in the labour market through measures such as minimum wages, limits on working hours, leave and rest periods, health and safety standards, contract durations, workers’ compensation coverage, and so on.

The advancement of these regulations fostered the prosperity of postwar capitalist economies, enabling the construction of more just and productive societies. Among other positive impacts, these regulations incentivize capitalists to reap profits from investment and productivity gains through technological advancements, at the expense of increased exploitation of the workforce. This is why most of the most developed countries managed to combine labour and social protections with international competitiveness and improved well-being.

In recent decades, this trend has been reversing, and the labour reform project in Argentina is another link in this chain. Lately, most productivity growth has been captured by corporate profits and the upper echelons of the labour hierarchy, while job insecurity has increased, with over-employment, underemployment, unemployment, fictitious employment, and overpaid “prestige” jobs, among other things. This has not boosted economic growth or investment in recent times, which are much lower than during the period of greater labour and social protection.

The increased exploitation of labour as a method of economic competition is yet another falsehood within hegemonic economic dogmas, especially in an international context where profits are accelerating due to technological advances that demand a more educated, healthy, and creative workforce. Making labour practices more flexible to adapt to new technologies is not wrong; what is wrong is increasing labour exploitation instead of promoting investment in training, health, and technological innovation. This bill will not increase productive investment but rather social conflict and the hardships faced by the majority of the population, while failing to create more quality jobs.

If the goal is to modernize labour legislation to adapt to rapid technological and social changes, the path forward is different: legally reducing working hours, increasing paid vacations, exchanging working hours for jobs, job sharing, greater employee participation in the company, and so on. The mechanisms and incentives for these reforms are varied, including taxes not per unit of labour but on the total number of hours worked in the production unit. Overtime should be reduced, but while maintaining working conditions and promoting new hires.

It is also important to expand access to universal social services that reduce household spending in areas where collective efficiency has been proven, such as health, education, housing, care services, transportation, and so on. All of these activities also have the potential to generate genuine, formal employment, and none of them will be promoted by this labour project. On the contrary, they will be further degraded than they already are.

The proposed labour reform bill in Argentina runs counter to these modernizing trends, reinforcing domination and punitive measures in favour of less productive capital. Thus, individual freedom does not advance, but rather regresses centuries without generating incentives for greater productivity and economic efficiency.

It is not only the national Executive branch that is responsible for this setback. Much of the supposed opposition also bears responsibility, as it does not hesitate to harm the working class by negotiating perks, meagre revenue sharing, and short-term, private agreements that maintain unjust and infuriating privileges.

The author is an Economist, President and researcher Ciepp

Courtesy

https://lacritica.ar/post/reforma-laboral-en-argentina-y-tiempo-de-vida/