July 24, 2014
Jobs or wages?
Among all the uphill challenges facing the government already this year, maintaining current employment levels usually takes a back seat and yet in many ways this could be the stiffest task facing the Cristina Fernández de Kirchner administration — especially by its own standards since job protection has been arguably the most outstanding achievement throughout all three Kirchnerite presidential terms (even if the job creation of the initial years has faltered). The introduction of the Progresar subsidy for youth who neither work nor study just three weeks ago was perhaps an early anticipation of problems to come. In contrast to the 2003-7 Néstor Kirchner presidency (when the private sector was still creating jobs as it picked up slack from the 2001-2 meltdown), the CFK administration has managed to keep serious unemployment at bay in the last six years largely by steady expansion of the public sector, but already last year that process was losing steam. Since the public sector accounts for about 20 percent of the national workforce, it would need to hire at four times the pace of the rest of the economy to defend employment levels single-handed (and there are scant grounds for optimism from a private sector grappling with devaluation and price crackdowns) but with the federal and (even more) provincial fiscal constraints looming for this year, this source of work stands to dry up even more.
The Río Negro provincial government has already pioneered job cuts on a minor scale and this trend could always mushroom for devaluation-hit provinces in particular but for now the bigger danger is a relatively underpaid majority of the state workforce feeling obliged to seek higher pay increases than ever (with the teacher demand for 61 percent leading the way and with the sinister precedent of last December’s provincial police extortion) in order to cope with the acceleration of inflation — now officially recognized with the 3.7 percent nationwide figure announced last Thursday for January. Indeed within this context fear of job losses might well become the main (even the only) inhibiting factor in collective bargaining to moderate pay demands. Some officials might hope that the division of organized labour into at least five major umbrella groupings might create scope for “divide and rule” tactics but this fragmentation is more likely to lead to competing militancy.
Peronist governments and organized labour have always protected each other in the past — are we now approaching a parting of the ways?