How precarious employment influences, the shortage of prices

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The Argentine social reality, with its dose of economic informality, makes it more difficult than in other countries to apply drastic measures

Alberto Fernández is experiencing first hand the old definition of politics as “the art of the possible”. And he already noted that in Argentina, the margin of the possible can be much more limited than in other places in the world.

In admitting that the possibility of a total stoppage of activities for 10 days is being analyzed, the president warned about the reasons that lead him to doubt. The first, as he said explicitly, is because that measure “has economic consequences.”

And then he gave a glimpse of what the social limitations are: he said that “we are looking for the moment” and acknowledged that they can only miss work and stay at home “if they tolerate their absence at work”.

And there the president outlined the social and cultural weakness of countries with a fragile economy. With double-digit unemployment and a job informality that reaches 30% of the population, the goal of having everyone paralyze their activities is simply not practical.

In fact, only employees in a dependency relationship, who work in the administration and services area and who work in companies where international standard practices are applied, can think of a massive transition to teleworking. And, even so, many have difficulties from a technological point of view, as the experts in networks and home office have already warned.

But, how to propose the week of preventive stoppage by the antivirus to a monotributista, or to a commercial employee or to someone who has a trade and is without income the week that he does not work?

Certain attitudes that seem clear and easy to take when you are in a Twitter discussion are not so easy when someone feels that their job stability is at stake or that their income level may be jeopardized.

It is one of the great challenges of the Government, which ranges from appealing to the good will of the population or imposing compulsory measures with threats of sanction. How already happened with the quarantine for those returning from a trip abroad.

What has been seen so far is that the Government has not been able to avoid the feeling of running behind the events. The suspension of classes It happened when a good part of the educational system had already adopted this measure in fact and when there was pressure from worried parents.

And as for the movement of people, the signs indicate that it will be difficult to move beyond the exemption of state employees to attend their offices, which is one of the measures considered inevitable.

The return of old ghosts

But the problems do not end there, but rather begin. Because then there is the management of the collective fear of shortages of essential products, something that was already evident this weekend.

For now, chinstraps and gel alcohols became the most difficult objects of desire to obtain, with a virtual lack in the pharmacies of large urban centers.

And the hysteria spread to supermarkets, too, where scenes of long lines were seen this past weekend at meat-cutting counters, as well as large-scale supplies of toilet paper, hygiene products, and canned foods.

The challenge for the next few days in the internal trade area will be to prevent the logistics chain from being strained to the point that it breaks and there are shortages of key products just when the population is most nervous and in which it is not supposed You should be exposed to a long time in public places.

Furthermore, as history has shown on countless occasions, these are the moments prone to inflationary peaks and relative price distortions, in the face of sudden increases in demand and bottlenecks in production.

The President announced price caps for products such as alcohol gel, and possibly applying similar measures in the drawer if the shortage were to transfer to food. But also in those cases, history has shown that the ideal conditions for flourishing of black markets, something that today’s technological possibilities exacerbate in a way never seen before.

As proof of this, in recent days the offer of chinstrap at astronomical prices has already been seen in the most popular e-commerce sites.

But perhaps worst of all is the uncertainty about how long the epidemic will last and its distortion of social and economic life. At the moment, the authorities act as if the problem is going to have its maximum point of tension in the coming days and could be solved with a stoppage of activities for one or two weeks.

But the truth is that no one knows if this will happen. In Europe, with a collapsed health system, no one dares to forecast that the crisis is on its downward curve, and there plays in favor the perspective that the arrival of spring will ease the situation.

Here, however, the worst was not yet seen.

Looking at the “little machine”

Meanwhile, Alberto Fernández observes what his colleagues from other parts of the world are doing and tries to apply drastic measures to the sensitive Argentine reality. On Sunday, while Olivos was discussing the suspension of classes, from the United States it was announced that the Federal Reserve would implement a new injection of dollars – quantitative easing, in financial jargon – to prevent a relapse in economic health.

Which exacerbates at the Argentine level the debate on whether to follow this example or maintain caution. As Cristina Kirchner warned long ago, the little machine for issuing dollars is only in the United States, which makes that type of expansion not so easy to emulate without the foreseeable inflationary consequences.

But the truth is that in crises priorities change. And when all the factors work against it, it does not seem that a monetary discipline against the world will be among the President’s central concerns.

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