Employment for 21st century Argentina, beyond quarantine

Unemployment is a phenomenon that can only be mitigated consistently to the extent that we succeed in understanding the job creation process.

In the 20th century, employment was synonymous with labor monorelations. Changing jobs used to be a failure with failure of the employment relationship, due to an employer error or due to the worker’s error with his dismissal. A worker’s decision to resign or their self-exclusion from the labor market was seen as the anomaly against the standard.

In the 21st century, employment is associated with previously unpublished words: dynamic, changing, multi-employment, multi-employment throughout the worker’s working life.

The role of the worker as such and his abilities are imposed over his own job or his workplace.

The 21st century worker is an individual who gradually has more time for personal and social tasks, who provides services during their working life under different conditions of contributions to the containment and social security systems.

Productivity

Of the current jobs, as long as they are not inserted in productive processes transferred from the 20th century, we can highlight three groups, to produce the conditions of reciprocal compensation of economic income within society, if we want sustained economic growth.

1) A group with high productivity functions, made up of those who have the capacity to subsidize the sections of the population that does not work, by age, unemployment or by particular condition.

2) Low productivity jobs, which only have the capacity to support themselves and their immediate group, with little ability to save.

3) Jobs with very low or no productivity, associated with tasks that facilitate social integration, but also provide opportunities for improving their skills and social advancement.

Solidly mitigating unemployment implies accepting that the way out of this condition will be, for the worker, a journey with stages.

A smaller portion will be able to reach the high productivity phase directly, because they have the necessary skills and the right opportunities. But a wide spectrum of people will have to be assisted to reach and sustain themselves in jobs with low, very low or no productivity.

A model that needs replacement

In the 1980s, the moderate increase in unemployment of two percent had, as a counterweight, to sustain a significant number of jobs with very low or no productivity in deficit public companies and without investments, along with excessive production costs in private activities , for tariff protections.

The lack of consistency between the production function and its capacities to absorb high-productivity jobs, together with an unsuccessful structural change, inhibited the creation of an investment cycle that would absorb a greater number of high-productivity jobs.

As the capacities of the economy to grow were exhausted, shorter conversion times were imposed in the following decade, and this increased the risks of permanent damage to groups with low and very low productivity.

In the 1990s, unemployment jumped from five to six percent as a consequence of the change in the production matrix, with a reassignment of productive factors in a disruptive way, with failures in the construction of a network of economic reintegration of disengaged workers: people with low productivity functional capabilities.

The entrance to the 21st century found Argentina with a banking crash, as a consequence of a debt crisis and a repayment capacity of the consolidated public sector. This crisis, which had the impact of shock with consequences for the entire economy, he added between five and seven points to the unemployment rate.

Its differential feature was the more than proportional increase in unemployment in the private sector versus the public sector, and this had a more marked impact on workers with very high productivity.

In the first decade of this century, when the relative prices were corrected and the consequences of the financial crash were absorbed, the rapid recovery of the economy was facilitated, as it was located on the most highly affected sectors of very high productivity: the countryside, agro-industry, competitive industry, services of added value, recreation.

This generated a virtuous circle that quickly provided the State with greater resources to: a) finance the insertion and continuity of low-productivity workers, strengthening training networks and education; b) finance direct subsidies to people with very low or no productivity, through the system of social security payments without prior contributions and the growth of social welfare plans.

This virtuous cycle allowed the unemployment rate to drop between 11 and 13 points in a solid manner in the period, but it was finally exhausted in 2011, without finding a replacement to date.

To each his own

Building a new regulatory framework that is solid and consistent over time for the employment and growth of our country will have to be done with a view to the situation of the time and without political speculation.

Each productivity group should have clear signals and policies, depending on:

1) The highly productive economic sectors that have not yet matured should agree to regularly reinvest taxes in their own activity for defined periods of two to five years, with security in the continuity of the legal conditions of their labor and commercial relations.

2) The national State should star in investment in vocational training and the employability of workers who are functionally in low-productivity sectors.

3) The provinces and municipalities should focus on organizing economic production systems whose objective is to sustain the social integration of people in working conditions and who, due to functional capacities, have very little or no productivity.

Allocating resources differentially in relation to the productivity of labor will be the key to the 21st century, for a new order in the employment of our future generations.

* Economist