01 March 2007

Down with unemployment

The unemployment figures measured as of the last quarter of 2006 just came out, and it seems we should all be merry and cheerful: 8.7%. In almost any country such a figure would be rather high, but in Argentina employment has been a concern since the last military dictatorship.

Employment had its ups and downs... usually downs. The quality of the jobs, the rate between workers' wages and companies' profit, and the purchasing power of those wages, have all consistently decreased since the National Reorganization Process started implementing the policies which were already in practice in Pinochet's Chile, under the auspices of the late Nobel Prize Milton Friedman (may Satan pay special attention to his soul) and the IMF. When Carlos Menem began his "structural reforms" Argentina increased its exports, stabilized the value of its currency, stopped inflation, and gained productivity as it opened its markets to foreign technology. Menem's master plan had an oh-so-minor flaw: it left millions unemployed and forced many others to work under the near-slavery conditions that only a deregulated job market can offer. As the economic model, based on the ridiculous idea that the value of currency in a free market can be fixed by law, collapsed in a matter of months, unemployment and poverty skyrocketed. Inflation was eventually contained, but at the beginning of 2003 unemployment was 25%.

One of the symbolical targets chosen by the Kirchner administration was lowering the unemployment rate to a single digit. The target was nearly reached last year but then unemployment increased again. The census bureau (INDEC), currently facing popular suspicion after the government removed its head because she allegedly refused to manipulate the inflation figures, has just announced that we're finally under the target 10%. People receiving the federal welfare plan are not counted as unemployed; if they were, the rate would be 10.1%. The government counters that we should count only those welfare recipients who are actively looking for a job (unemployment means you want to work and you can't, after all), which would give 9.3%. Anyway, that's too close to 10% for comfort, so the official line will stick to 8.7%.

The announcement comes just in time for President Kirchner to congratulate himself (using the royal "we") during the opening speech of this year's Congress, as he did with remarkable consistency in 2004, 2005 and 2006. The reduction in unemployment is indeed impressive, and the expansive policies of this government have undoubtedly helped; if only they could be more modest...

Millions remain unemployed or under-employed. The striking difference between the unemployment and poverty rates show that many people who have a job (even a stable, registered job) are poor. There's been a surge of union demands, as some unions have regained power. Leaders of strong unions such as the truckers' syndicate, Hugo Moyano, are historically close to the Peronist quasi-corporatist tradition and close to the national government; others simply have found they have pressure power and have decided they won't be bought or co-opted (as they happily did for a handful of dollars in the 1990s). Those workers labouring outside their protection, however, tend to be exploited. While mob-like union bosses get outrageously high salaries for their workers, many workers scattered within the service sector (such as supermarket and shopping mall employees) lag behind, trapped in abusive jobs.

Soon, as the unemployment rate goes down a bit more every quarter, the elephant in the middle of the room that nobody in the government wants to acknowledge will be impossible to ignore: so-called structural unemployment, the mass of mostly young people who'd like to work but have zero chance to get a job, because they grew up without a half-decent education, they have no specialized skills, and (in some cases) have had a decreased intellectual development due to slight or severe malnutrition during their childhood. These guys and girls never attended school on a regular basis, or were forced to work or scrounge the trash for a living when they should be studying, and may have already turned to drug addiction or thievery; their parents and even their grandparents have always lived off state welfare, and none of them has any idea what to do with their future, or any faith in the possibility of social advancement.

One of the highlights of old-time Argentina, the one that attracted immigrants and that gave rise to a vigorous middle class, was that you could always advance with hard work and a bit of luck; if you couldn't go to college, your children would be able to, and if not, they could at least learn some technical skills and earn a decent living in a factory, or set up their own modest business, and hope that their own children would outdo them. But that dream died long ago. There are now too many poor who know they'll always be poor. Barring a real paradigm change, they'll be around forever, no matter how small figures the stats guys come up with.


  1. Anonymous21:09

    Thanks for your blog. I read all posts and gain a better insight into Argentine society thru it. The reality of your posts strikes a chord. I just obtained my one- year Argentina residency visa and plan to eventually become a dual U.S./ Argentina citizen so it is good to find the unvarnished truth.

  2. Anonymous17:04

    I agree with Mike above. This blog is so insightful and informative. I, too, read all your posts and have found them very helpful in understanding the social, political and economic issues in Argentina.
    At the moment, I'm chained to a desk in Chicago, but in a couple of years, I hope to be able to live in Latin America, probably in

    Yanki Mike in a recent blog post
    references your blog and suggests that you install a paypal button to enable us to contribute finanically to your efforts. Please do so!!! I would be delighted to make a donation to support your blogging efforts.

    Thanks again for a great blog!

    Jim M

  3. Well, there you have it. I'm now trying to understand the legal maze involved in getting a donation. With the fees and the bureaucracy in each step, I fear I may end up oweing money to PayPal!

    Thanks everyone! If I don't say that more it's because I feel embarrassed to acknowledge so much flattery from you all.

  4. Unfortunately, most countries seem not count as unemployed those people that have abandoned looking for a job, or those that have left school but have been unable to find work. These individual represent not only a loss to the country (in human terms), but also great potential for social unrest.

    But what potential opportunities are there for the growing number of unskilled workers in Argentina? I can only see that getting worse in the near future.

    The government can do some things – such as making the country hospitable to foreign investment – but until people believe again in a better future through education, nothing can improve.

    Globalization is the great leveler. In many occupations our livelihood is dependant on somebody in another country not being able to do it more cheaply.

  5. Hi Pablo,

    When I first discovered your blog, I was really surprised very few of those people who profess (on other blogs)to love Argentina read it but I was convinced that one day readers would grow tired of the one-sided and glossy presentation of this complex country with formidable problems.

    I am really happy that it seems we woke up one day, no different from any other, and it has happened. I am excited that there is now an active participation on this blog. Keep up the great work!!

    p.s. Click Paypal on any site that already has it and you'll be able to join up. Of course, the charges is a real sting.


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