There are several possible measures to grant workers’ rights and stimulate the economy.

During the last regional meeting in Lima, ILO stated that, despite the favourable international context, informality remains being very high in Latin America. Argentina is no exception.

Even though informality has multiple causes, one of the most important factors is labour regulations that discriminate less qualified workers. There is a need to develop new strategies that give priority to lower social security taxes –which tax lower salaries- before reducing income taxes and to encourage non traditional formal employment forms.

ILO’s publication on informality issues in Latin America caused quite a controversy in Argentina. Actually, such controversy took place only among pro-government politicians, as common people do not pay attention to percentages: they already know informality is very high.

Disrespectful controversy workers rights, a very sensitive issue, was focused on methodological aspects. While in Argentina informality is only measured on employment, the ILO added also on solo traders. It is worth mentioning that the ILO is a tripartite organization represented by governments, employers and workers. Every ILO meeting is attended by representatives of the three parties.

Clearly, these discussions eclipse the most important message. ILO is warning that informality, though a very favourable global context, is still extremely high in the entire region. This situation is a major challenge as a less promising international context seems to be coming in the near future.

In Argentina, data from INDEC provides certain clues to understand the causes of informality. Among those workers who have a superior education level, informality dropped from 31% to 24%. Among workers with a secondary school degree, informality decreased from 49% to 40%. However, among workers who have not finished high-school, informality remains ate 61%.

Even within context of great economic growth, 6 out of 10 workers with low education levels are still under informal conditions.
Certainly, several factors cause this phenomenon. The first factor to consider is that employment creation over the past decade was propelled by the liquefaction of labour costs caused by the mega devaluation of 2002. The strongest impact occurred among qualified workers but have little influence on less qualified people as, in their case labour costs’ liquefaction was not enough to compensate the prevailing low productivity levels.

A second possible explanation is that there are very few advantages in formalizing lower levels. An informal worker. An informal worker may access to a similar pension than a formal worker, he can have allowances thank to the Child Universal Allowance, if he loses his job he can have social services for a higher amount than formal workers’ unemployment benefits and health services provided by health insurers are similar to those provided by public hospitals. Is this the correct way of implementing the social justice concept?

To revert high informality levels, low productivity levels and high labour costs must be improved. Formality must be promoted through every non traditional employment way that involves labour or commercial relationships that comply with the law. There are ILO conventions, such as no 181 on private employment agencies, which are an adequate procedure of control over the compliance of non traditional formal employment forms.

Productivity demands improvements in education, creating effective formation towards employment, particularly among the most vulnerable groups, and elevating the productive investment rate.

Lowering labour costs is possible by re-designing social benefits, reducing taxes on salaries, particularly on lower salaries. This might be achieved by adding minimum non taxable amounts to social security to compensate the lack of upgrading of the minimum income taxable amount.

Argentina faces the opportunity of starting a new economic cycle with concepts that are more adequate to modern labour markets. The labour world has changed, new generations intending to enter the labour market have very different expectations to those of the 1940’s generation. With adequate control and regulations, more and better jobs can be created. Decent work demanded by ILO for the entire World.