Young people are the main victims of the employment crisis facing the nation, according to new data.
Estimates from UNICEF, based on data produced by the INDEC national statistics bureau from the first quarter of 2024, Argentina’s unemployment rate is approximately three times higher among those aged 18 to 24 (20.1 percent) compared to the average population (7.7 percent). Among women, it is even worse, reaching 21.7 percent for women.
In contrast, among young wage-earners, informality (informal employment or unregistered labour) is booming. As many as 57 percent of youths, nearly twice as much as the general average (36 percent), do work off the books.
Argentina has had the worst expectations of job generation in the world for over a year, while, in neighbouring Latin American countries, they have stayed at high sustained levels which even exceed the global average.
A recent report by ManpowerGroup accounts for the circumstantial problems facing Argentina’s economy. According to its data, the Net Employment Expectation (ENE) for the last quarter of 2024 increased by four percent, which actually accounts for a reduction by one percentage point in the quarterly comparison.
The data reveals a stagnation in the companies’ intentions to hire staff.
Argentina’s net employment expectation is the lowest in the world. To put things into perspective, the global average is 25 percent. In India, it stands at 37 percent, followed by Costa Rica (36 percent), USA (34 percent) and Brazil (32 percent).
At the other end of the scale, Chile, Hong Kong and Israel precede Argentina among the countries with the lowest expectations, at eight percent.
Argentina’s macroeconomic problems seem to have diverted attention from a topic inherent to our country’s competitiveness: the capacity to attract investment and generate employment.
A report by the CEPA (Centro de Economía Política Argentina) think tank, using data from the Superintendency of Occupational Hazards, shows that 9,972 small or medium sized companies have been lost. The flipside is loss of 265,000 recorded jobs, partly because of closing companies and others downsizing.
A fall in consumption has also affected commerce, while industrial production slowed by 20 and 25 percent compared to the same period in 2023. Its immediate consequence is the fall of employment in Argentina.
Fragility
Luis Guastini, director general and president of ManpowerGroup Argentina, points out Argentina’s economic situation was shaken not only by the Covid-19 pandemic, but also by a series of additional events which showed the fragility of a system needing review: the logistics crisis, extreme political movements, more than 100 active armed conflicts all over the world, and many others.
Guastini also highlighted the impact of ‘nearshoring,’ a process of productive reconfiguration which implies the relocation of production processes from Asia to closer destinations, in a move to seek greater security from supply chains.
Six out of every 10 companies in the Americas consider this as an essential part of their strategy, he warns .
Guastini mentions sectors such as energy, the automotive sector and technology as avant-garde in this transformation, especially in nations such as Mexico and Brazil, but also in others such as Colombia, Peru and the Central American region.
Nearshoring will add nearly US$78 billion in annual exports to Latin America, though almost none of this is reaching Argentina.
Argentina’s powerful agricultural industry exports nearly US$30 billion in goods a year, and if all the investments needed and announced were made in mining and oil and gas, Vaca Muerta would only reach comparable figures by 2030.
The decision to invest no longer depends only on factors such as labour cost, argues Guastini. There are other elements at stake such as the availability of human capital, macroeconomic stability, infrastructure and operating risks.
In this vein, Argentina stands out for its talent. “We’re the country with the highest level of English in Latin America, we have one of the highest rates of university graduates and scientists per inhabitant, and we have developed key technological poles which allow us to compete regionally,” he observed.
“However, we’re still in a cycle of instability which places us at a disadvantage against our competitors,” the ManpowerGroup boss added.
Corrections?
Argentina has begun a process of correction of macroeconomic variables, such as the reduction of fiscal deficit or inflation, and “has not yet managed to translate these advances into sustained growth pushed by private investments,” Guastini reflected.
The recently enacted ‘Ley de Bases’ mega-reform, which introduced the RIGI large investors incentive scheme, could be a step in the right direction to attract foreign capital, he hopes.
However, as any investor knows, no statute can replace trust, said Guastini. “This is not an abstract concept: it is built with transparency, stability, and, why not, sincerity,” he remarked.
Guastini highlights that, ultimately, the road towards economic recovery is not only about adjusting monetary policies or making use of our natural resources.
He rules out, however, that talent availability is a problem. “It’s about going back on a path of trust, which Argentina has looked down on systematically, but which is essential to ensure a prosperous future,” the executive insisted.
– TIMES/NA
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