Argentina Seeks to Shift All-Cash Workers Into Payroll Jobs

FrankPintor

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this is not fixing the actual problem.
Why do you think this is not fixing the actual problem? I think this would be a huge step forward in moving people from black market employment (and even big well-known companies employee people "en negro"... I have no idea how they can get away with it) into the formal economy. There has to be some incentive for the workers, so keeping their benefits for a year doesn't sound unreasonable.

The article is now here: https://www.batimes.com.ar/news/eco...hift-all-cash-workers-into-payroll-jobs.phtml
 

carride

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I was surprised to learn that the same number of people working unofficially “under the table”, is now equal to the number of people in the formal official sector. I cannot imagine how the government will encourage a significant percentage of businesses to convert informal workers to become formally employed.
 

ArgentinaVet

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Long time local business owner with local employees here. This plan will be a complete failure as it ignores the reason for half the labor force being unregistered and there being almost zero private employment creation (which is the root cause behind inflation in Argentina).
The reason of course are the labor and tax laws which make hiring employees in white a non starter as the unlimited liability simply presents a mathematically unappealing risk/ reward ratio for employers. The current obligatory severance pay system needs to be replaced with an unemployment insurance system similar to what exists in the USA. The current system is only working for the labor attorneys. It now takes 7-10 years for labor lawsuits to go through the labor courts so not only do the fired employees not get paid but millions of jobs are never created as a result of the inherit unlimited liability that the current severance pay laws imply.
 

jblaze5779

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First you need to ask yourself why people want to work under the table. Then fix that issue if you want to solve the problem.
 

carride

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First you need to ask yourself why people want to work under the table. Then fix that issue if you want to solve the problem.
My naive impression is that the workers do not want to work under the table. Probably because it is the only option the employers are able to offer.
 

jblaze5779

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My naive impression is that the workers do not want to work under the table. Probably because it is the only option the employers are able to offer.
They make more money in cash and don't pay taxes and then just sue the "employer" when the work is over.
 

carride

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They make more money in cash and don't pay taxes and then just sue the "employer" when the work is over.
The journalist reported "Over 80 percent of the new jobs created post-pandemic in Argentina have been informal". I have faith that if a statistically relevant number of these new jobs were taken along with some ulterior motives, then it would have been reported.
 

antipodean

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Long time local business owner with local employees here. This plan will be a complete failure as it ignores the reason for half the labor force being unregistered and there being almost zero private employment creation (which is the root cause behind inflation in Argentina).
The reason of course are the labor and tax laws which make hiring employees in white a non starter as the unlimited liability simply presents a mathematically unappealing risk/ reward ratio for employers. The current obligatory severance pay system needs to be replaced with an unemployment insurance system similar to what exists in the USA. The current system is only working for the labor attorneys. It now takes 7-10 years for labor lawsuits to go through the labor courts so not only do the fired employees not get paid but millions of jobs are never created as a result of the inherit unlimited liability that the current severance pay laws imply.
Also an employer here and I'll add that in unionized sectors (like hospitality for example) many also see a big reason to go en-negro rather than deal with the added complexity and inflexibility of unions - especially with operationally critical issues like rostering and role flexibility and added costs from needing to hire delegates, etc. Will also add that on the employee side of things the income tax, subsidy and retirement pension structure means many who can earn a "good" salary also have an incentive to keep their salaries "artificially" lower ... either by getting one part en-blanco and another en-negro or going all en-negro. But for most workers, it comes down to the simple fact that if you earn in pesos, living in Argentina is expensive and if getting an extra 10k in their hand means keeping quiet and going informal or semi-formal, many will gladly do it.

Unfortunately, all this simply pours fuel on the flames meaning that the state is able to tax less and needs to spend more each time someone goes informal, while they also know cracking down on informality would lead to mass unemployment issues and unrest, especially since the country is not attracting new investment that creates jobs. This means all those local companies that currently enjoy the state protection by keeping much of that new investment out, would end up on a one-way track to losing that protection or seeing their margins reduced through competition, and that kind of direction simply doesn't fund election campaigns in this country. It's a catch-22 for any government best solved by a fresh coat of lipstick on an ever fatter pig.
 
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