August 23, 2014
Teachers with many pupils
Mutinous provincial policemen may have been the big story at the end of last year and striking teachers (especially in Buenos Aires province) are now it but always against a backdrop of far more generalized labour discontent. Only the fragmentation of the trade union groupings stands in the way of the date of next month’s general strike already being defined but it is sure to come — its success in bringing the country to a halt guaranteed by the adhesion of the transport workers (despite a daily 60 million pesos of state subsidies for buses alone while this year’s steep fare hikes go a long way towards meeting wage increase demands) and dissident CGT chief Hugo Moyano’s teamsters. Rather than countering Moyano, the pro-government trade unionists are obliged to compete with him in militancy if they are to retain credibility. And if even Kirchnerite labour bosses refuse to criticize strike calls while teachers are setting an example for other state employees, how long before a generally underpaid public sector follows suit?
Yet any substantial increase there would jeopardize the precarious fiscal stability achieved over the last month, as much indirectly as directly — in the immediate term the brunt would be borne by the provinces (as already seen with both the police and teachers) whose payroll accounts for almost half their budgets while the gap between wages and pensions already badly trailing inflation would grow, increasing the pressure for more substantial improvements in retirement benefits. The only way to meet these wage and pension demands would be to print money, thus complicating the aim of pegging back interest rates as from next month (as the Central Bank plans) and avoiding a severe recession later this year — pressures for a new devaluation would then also return. Yet even an unlikely success in persuading organized labour to wage restraint (fear of job losses would be the only convincing argument here) would not necessarily ward off recession because the reduced purchasing-power would hit the domestic consumer market.
At the time, when a then electorally triumphant President Cristina Fernández de Kirchner broke her strategic alliance with Moyano over two years ago, there was an illusion that Kirchnerism could re-invent itself without the traditional Peronist trade unionist “spine” — a courageous initiative which mainstream society might be inclined to applaud in many ways, given the unsavoury nature of so many eternal labour bosses, but that illusion could be seriously tested this year.