December 18, 2017

Stagnation hinders efforts to boost formal labour, says report

Tuesday, April 22, 2014

Private sector accounts for only one in five jobs in north

By Francisco Aldaya
for the Herald
Only 18 percent, or fewer than one in five, registered workers in northern Argentina are employed by the private sector, compared to the 35 percent seen in Buenos Aires province and 44 percent in the capital, according to a report published by the IDESA economic consultancy based on statistics from the INDEC national statistics bureau.

The balance is made up of unregistered workers, the self-employed and the public sector.

For IDESA the growth of private sector employment is pivotal in the reduction of informal labour, with the report praising the government’s bill to promote registered labour — to be outlined in a Senate committee hearing today before debate on the floor — for recognizing that “economic growth and more controls are not enough” to address the issue.

“The government has noticed the need to change tributary law,” IDESA director Jorge Colina told the Herald.

He pointed out, however, that the bill falls short: “The proposition involves reducing employer contributions only by 20 percent, and contributions currently account for half of what employees are paid.”

That is, half of registered workers salaries are tax-deductible, which fosters the notion that both parties — employers and employees — are better off slipping pay cheques under the table.

The law would thus reduce the burden for companies to 30 percent.

However, “further reforms to labour institutions, with a special focus on small companies are needed,” the report indicates.

Colina suggested that further, more durable tax breaks for medium-sized and large companies to promote the growth of the private sector are needed to reduce under-the-table employment.

“Unregistered employment in the private sector stands at about 40 percent, and only at 10 percent in the public sector,” he emphasized.

Regionally speaking

In Patagonia, the private sector employs 36 percent of the workforce registered at the AFIP tax bureau, with the percentage dropping to 33 percent in the central region of the country.

The former region includes Tierra del Fuego, Santa Cruz, Chubut, Río Negro and Neuquén, and the latter Buenos Aires province, Santa Fe, Córdoba, Mendoza, La Pampa, San Luis, Entre Ríos and San Juan.

Tierra del Fuego, with its strong oil sector presence, boasts the highest proportion of private jobs, at more than 50 percent.

At the other end of the spectrum were Corrientes and Chaco, both weighing in at 13 percent.

In the third quarter, INDEC posted unregistered employment at 33.5 percent. The president announced the “Promotion of Registered Labour and Prevention of Labour Fraud Law” this month.


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