In Argentina There Are 55 Public Employees For Every 100 Private

LA MAÑANA – National media detailed that according to a report prepared by the Argentine Institute of Fiscal Analysis (IARAF), there was an increase from 42 public workers for every 100 private wage earners in 2012, to 55 today. In this sense, the survey indicates that from 2013 to 2017 a positive inter-annual variation of public employment was observed, greater than the total variation of employment in the country.

According to data provided by the Ministry of Labor of the Nation, in Argentina there are 1.5 million people as “monotributistas” (it is a special denomination for those who are working self-employed and don’t have a formal employer), to which some 360,000 “monotributo social” (A special category inside the monotributistas) are added. However, with the 2018 crisis and for 2019, public employment resumed an upward trend and once again showed sustained growth, added to the fact that other categories outside the public sector destroyed jobs.

It should be noted that although the growth of public employment decreases as of 2016, it never stopped growing except for a short period in 2018. Thus, it went from 2,712,800 public jobs in 2012 to reaching 3,213,000 in 2020, equivalent to a 26% growth in the last eight years and 665,000 new jobs in the state sphere.

Likewise, the study carried out by the IARAF shows that in that period of time, public employees increased their relative importance in total registered employment, going from 23.4% in 2012 to representing 27.3% in April 2020. At the same time, in 2012 registered private workers counted 6,068,500 workers and were equivalent to 55.7% of the country’s total registered employment.

After being consulted about this issue, the economist Aldo Abram, executive director of the “Libertad y Progreso” Foundation, told La Mañana that in general terms, employment in the private sector does not increase, but it does in the public sector; and evaluated that for this reason, unemployment levels did not increase in an even greater way than is currently observed (the most recent data published by the National Institute of Statistics and Censuses places unemployment at 10.4% in the first quarter of 2020).

However, the professional questioned that in recent years, the State has increased public employment instead of having promoted the creation of formal jobs in the productive private sector.

“The different levels of State, national, provincial and municipal, charge high taxes to the productive private sector. On the other hand, the private sector is ‘asphyxiated’ with numerous regulations. Entrepreneurs, small and medium-sized companies are mainly harmed, which unlike large companies, do not have the money to face such high expenses”, Abram explained to this newspaper.

“The owners of SMEs are the most affected by this situation, which is the origin of the high level of informality that exists in Argentina, with a high level of evasion. We are one of the few countries in the world in which if a small or medium-sized company decided to comply with all taxes, it would lose money. The Argentine State charges more taxes than other countries, and the public services it provides are of lower quality than in other nations”, he said.

Reduce expenses

Therefore, Abram asked the national government to implement a plan that facilitates reducing those expenditures of the State that “are not useful to society”, such as political expenses or those related to unproductive employment, through a reform that allows to lower taxes and promote creation of productive and quality employment in the private sector.

“In the current context, the ‘generous’ State provides work, generating unproductive employment, and provides subsidies. To sustain this, the public sector needs more money. Therefore, it must create more taxes, which results in less job creation in the productive private sector. We are in a vicious circle”, he warned.

“One day, this is going to generate a continuous impoverishment of society, because there will be more unproductive employment than one that generates different useful goods and services for the community. We are not a developing Nation, but a country in impoverishment”, said the specialist.