The labor reform project circulated by the Government attacks the health and future of workers. The initiative, which they will want to discuss in extraordinary sessions during the summer, makes a significant change in the financing of the compensation regime for dismissals: the creation of the Labor Assistance Funds (FAL), from which the resources will come from a part of the mandatory pension contribution of companies equivalent to 3% of the wage bill.
In article 76 of the reform, the benefit to the Government’s employers is explicit, which in this way will transfer to the State the cost of layoffs and generates a drop in the collection destined to pay retirements and pensions of the Argentine Integrated Pension System (SIPA) of Anses.
According to private calculations, this definancing would be around US$2,600 (if the average gross salary for August reported to SIPA is considered, according to the data collected by the Ministry of Labor) and would reach 4.7 billion dollars per year if the remuneration for salaried work reported in the National Accounts system compiled by INDEC is taken into account. Comparing with national budget execution data from the Congressional Budget Office, this amount is equivalent to 1 month’s total retirement and pension spending.
Furthermore, the Government will further defund the ANSES with the permanent reduction of 3% in employer contributions on the salary of formal workers destined for the Social Security subsystems (SIPA, Family Allowances regime, National Employment Fund and PAMI).
In article 148, in sections a and b, the rates are replaced by making a differentiated reduction in employer contributions: from 20.40% to 17.40% in the case of employers in the services and commerce sectors, while for the rest of the private sector employers the reduction will be from 18% to 15%. These benefits imply a drop in income for social security of around US$3 billion a year.
But even more so, the reform foresees another reduction in employer contributions, lowering from 6% to 5% what is allocated to the social works of current registered workers. This would imply a loss in revenue equivalent to around 1,000 million dollars annually for the system, and For workers in a dependency relationship who derive their contributions from private medical companies, they must cover the difference with their own pockets.
Additionally, in title XIX of the project, the New Employment Incentive Regime (RIFL) is created with new benefits for employers, establishing a series of preferential rates for employer contributions of those employers who hire new workers as long as they meet the requirements established by the initiative. The impact in terms of income to the social security subsystems will depend on the number of firms that join the regime.
The Government gives benefits to employers, arguing that lowering costs would create more employment. An old resource that was used during Menemism with dire consequences both in labor matters, with a jump in unemployment and precariousness, as well as in the emptying of the pension system, the money of retirees.
Source: www.laizquierdadiario.com
