Six proposals to create productive jobs and generate higher income

Enrique Blasco Garma
Consejero Académico en Libertad y Progreso

INFOBAE – The advantages of recovering the freedom of agreement in the labor sector.

PURPOSE AND VALUE:

The first step is to understand the purpose of contracts. Contracts are valid exclusively for their ability to meet the individual needs of the parties. In articles for Infobae, I demonstrated how the freer transactions are, the greater the value is ​​created. On the other hand, obstacles and forced impositions on those who produce, to favor those who do not, deteriorate the GDP.

Goods are valued for their capacity to satisfy personal needs. All the better when competition is structured to focus on pleasing those interested in the different contracts, discovering designs, conditions to create superior values and become increasingly satisfactory. Complex interactions to better please the participants. That is why countries are delayed when bureaucrats impose products, companies, and restrictions. Why then force proposals that so many escape?

The satisfaction of the contracting parties is the main value to be preserved, without prejudging the needs of each of the parties. The arbitrariness and uncertainties that anguish majorities confirm the advantages of agreements free of capricious regulations. However, most governments still prefer to treat the employee as a disabled person who must be defended from his own ignorance and the greed of the employer. This bias devalues ​​jobs.

The creation of income has been hampered by legislation from successive governments throughout the last 80 years, especially by the military, who founded the power of the unions and CGT.

The Iron Law of the Oligarchy, formulated by the sociologist Robert Michels, is verified. His book Political Parties warns that the emergence of an elite is inevitable. Power in organizations will always belong to a group of individuals that make it up. “Whoever speaks of organization speaks of a ruling caste, of an oligarchy.” To make matters worse, governments grant privileges to unions, increasing the power of union leaders. So much so that they changed the language of labor regulations.

The right to work (the right that no one prevents the provision of labor services) was transformed into the “right to obtain a job“, even for those who do not carry out an activity useful to third parties. It is common to allow extortion: union agents hinder work in certain companies and social organizations prevent circulation in public spaces. Furthermore, the State employs people whose remuneration exceeds their contribution.

Legislation should accept that workers, as free citizens, can waive labor rights, negotiating better benefits. Although there is a tendency for the interpretive criteria to admit abuses, inconsistencies in the behavior of the employee.

The workplace should reject the idea that the actions of workers lack legal relevance.

THE CHANGES WE NEED:

FIRST PROPOSAL: To allow the express and irrefutable waiver of labor rights. Any situation that as consented to for three months or more is consolidated and cannot give rise to subsequent claims. Eliminating automatic and unanswerable legal presumptions

The needs of the parties in a dynamic world cannot be considered immutable. Therefore, employment contracts must establish the terms to which the parties agree. There is no basis for an employment relationship to last until retirement and its termination implies a relevant cost for your employer.

SECOND PROPOSAL: To authorize the free determination of the term of employment; full recognition of privately agreed extensions.

The obligation of increasing the compensation according to the length of employment generates contingent liabilities for the private company, inciting unacceptable conflicts when the compensation to be gained from dismissal look attractive to the worker and his lawyers.

THIRD PROPOSAL: Replacing compensation for dismissal according to seniority with transitory public or private insurance, which may be complemented by the advance constitution of guarantee funds to be received by the worker in the event of termination of employment.

The regulated labor regime must be optional for the interested party, who can agree to work without a dependent relationship. It is inadmissible to presume the existence of a covert employment relationship if you provide services autonomously, even for long periods, completing the instructions of a contractor. Let each individual decide the nature of the agreed relationship.

FOURTH PROPOSAL: Validate the independent provision of services, nullifying all legal presumption to the contrary.

The remuneration system according to the formal function and the period of service provision entails notorious inequities. Each worker should be able to be remunerated according to their contributions to the creation of wealth.

FITH PROPOSAL: Allowing the free determination of assets, with the right to confidentiality.

Payment for union membership cannot be compulsory and deducted from your salary receipt. All workers may join a union enjoying autonomy either by company or groups of companies with similar characteristics and pay the charge involved freely.

PROBLEMS WITH THE CURRENT LEGISLATION

The current law prevents agreeing to the renewail of term contracts without making the relationship permanent; establishing a specific compensation amount in case of dismissal or simply waiving compensation; agreeing on schedules and remuneration modalities freely.

Collective labor agreements should be prohibited from being binding on workers who do not ratify them, particularly if they contain provisions that harm them, such as the imposition of “solidarity contributions” for trade union purposes.

SIXTH PROPOSAL: Allow collective bargaining agreements by individual companies, whatever their size, and not by activity.

James Madison, father of the US Constitution, proposed competition, under the same stable law for all, as a safeward against the corruption of institutions. This is also the ideal of the French Revolution: the same law for all people and times.

Last March, 158.5 million people had effective civilian jobs in the US, the country with the highest labor remuneration in the world, as a result of the greater freedom of employment contracts and respect for private property. The refrain that labor flexibility would enslave workers is not verified. On the contrary, every month, some 6 million people (4% of all employed persons, at a rate of 48% per year) change jobs due to incentives to improve employee and employer benefits, expanding employee job satisfaction.

In Argentina, a legislative tangle imposes contributions and regulatory obstacles in favor of unions and their social work without agreement or sufficient participation of the interested parties. Such regulations fail to comply with the principle that “there is no taxation without the vote of the obligor”.

RISING COST OF UNION POWER

Workers and companies active in different sectors are assigned by law to specified unions, obliged to pay dues and other conditions even if they are not affiliated to the union or give personal consent. Union entities receive income of more than 8% of the employee’s salary, from various contributions, including those from employers. A significant share of national income, conferred by governments. No worker or employer can oppose their dictates

Labor contracts are sanctioned by activity without the participation of a majority of employees and companies in the decisions. These laws confer enormous powers to union leaders who have competition or consensual controls. The decisions of the unions are valued laxly, going against the interests of those affected.

The long terms in office of the union leaders, who benefit from enormous power and lack of competition, are not surprising. A true parallel state concessioned to monopolistic organizations with opaque management decides the working life of the majority of Argentines.

The mobilizing power of the unions weakens constitutional authorities. Some 40% of registered salaried employees are unionized in Argentina, compared to 16% in Brazil, 14% in Chile, 9% in Mexico and 6% in Colombia. Unions mobilize crowds, expend effort and put pressure on rival authorities, companies and groups.

State-owned enterprise unions virtually co-govern them. This results in strikes, the suspension of service, discrediting the authorities to force them to grant the demands. Examples of these relationships are Aerolineas Argentinas, whose main objective is to satisfy its directors and staff with subsidies of USD 700 million a year and barriers to competition. Teachers’ unions decide ideological programs and payments to teachers supported by governments, being uninterested in teaching. State unions condition the entry of employees to having relatives inside it.

Governments devalue work when they decree wage increases, prohibit dismissals and other arbitrariness. Collusion between union and state ratifies corruption and prevents competition.

Employment benefits vary continuously throughout each particular relationship. Therefore, the conditions should be those freely agreed upon by the parties.

Employers and employees should agree at their convenience, inducing increasing efficiency and satisfaction. Free contracts between employer and employee, free affiliation to unions and social projects, supported by contributions to the entities chosen by the members and employers. Argentina claims competition for more productive jobs and income.

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