Structural reforms ensure social mobility

CRONISTA – It is an undeniable fact that our model of industrial relations created under a retrograde labor and employment law is displacing and forcing traditional employees to find jobs under different hiring methods, for instance, as freelance entrepreneurs, tech workers, typical civil servants, self-employed, state-contracted employees, remote workers, clandestine workers, and in other formats that human labor may take.

It is always imperative to differentiate between facts and stories. Let’s see the evidence. Argentina has 6 million registered workers under employment relationship at the private sector, and this figure has remained the same for more than seven years. We have not been able to increase it; no new job positions have been created to keep up with the natural increase rate, and in these last seven years 1 million people have entered the market. At the same time, work off the books is on the rise; there is a gray zone between unemployment and a traditional stable job, irregular work, freelancing and new hiring forms such as those used by UBER, RAPPI, GLOVO, PEDIDOSYA, CABIFY and similar platforms. The system is forcing traditional employees to find anomalous options with no state-of-the-art regulation, which has been postponed for the last twenty years.

This process, which means the displacement of certain social groups who have traditionally taken refuge in stable jobs and now should find other alternatives, is called structural or forced mobility.

The reasons for this migration are quite varied, including first of all the advance of new technologies and general conditions (rigid laws, high direct costs, tax burden) and specific situations (recession, inflation, credit crunch and investment) in the labor market.

A study on developed countries shows that there is a clear link between inequality and low social mobility. Of the eight countries studied -Canada, Denmark, Finland, Sweden, Norway, Germany, the UK and the US- the US had both the highest inequality and lowest mobility, especially at the lowest rungs of the socioeconomic ladder, with mobility increasing slightly as one goes up the ladder.

Studies have also found “a negative relationship” between income inequality and intergenerational mobility. Countries with low levels of inequality such as Denmark, Norway and Finland had some of the greatest mobility, while the two countries with the high level of inequality—Chile and Brazil—had some of the lowest mobility.

Recognizing the disparities between  strictly location and its educational opportunities highlights how patterns of educational mobility are influencing the capacity for individuals to experience social mobility. A substantial literature argues that there is a direct effect of social origins which cannot be explained by educational attainment.

However, other evidence suggests that, using a sufficiently fine-grained measure of educational attainment, taking on board such factors as university status and field of study, education fully mediates the link between social origins and access to top class jobs.

Another essential factor is the role of individual level mental ability in pursuit of educational attainment—professional positions require increasingly more specific educational credentials.

Mental ability can contribute to social class attainment independent of actual educational attainment, as in countries with a consolidated middle class, such as Latin American countries. This can also be seen in the case of intelligent people with no technical, tertiary or university background, individuals with higher mental ability who manage to make use of the mental ability to work their way up on the social ladder.

This study made clear that intergenerational transmission of educational attainment is one of the key ways in which social class was maintained within family, considering two or three generations.

Results suggest that social mobility has increased in recent years in Britain and other core countries. Which according to one researcher is important because an overall mobility of about 22% is needed to keep the distribution of intelligence relatively constant from one generation to the other within each occupational category.

In Argentina putting off structural reforms, such as the labor and tax reform, may lead to brain drain, stagnation and regression in social mobility, and systemic social, labor and economic decadence.

By Julian A. de Diego
Director of the postgraduate course on Human Resources at the School of Business at UCA.


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