President Javier Milei took office last December vowing to take his chainsaw to Argentina’s public sector and he has followed through on that promise, dismissing nearly 35,000 state employees over the past 12 months.
During its first year in government, the Milei administration downsized central administration, ended thousands of contracts that were up for renewal and shuttered a number of state agencies and companies.
A report issued by the newly created Deregulation & State Transformation Ministry has now highlighted the chainsaw cuts that have been delivered. Redundancies amount to 34,820, equal to a seven-percent decrease in the structure of the state. The lost jobs include both the national administration posts and roles at various companies answering to it.
Between December 2023 and October 2024, the national administration reduced its ranks by 10 percent, whereas in state-run firms, the percentage rose to 12.6 percent.
“In particular, the national administration (one of the few sectors whose jobs had grown over the last decade in Argentina) experienced a drop by over 20,000 jobs, which saved US$3.82 billion,” estimated the Ministry, which is headed by Federico Sturzenegger, the architect of many of Milei’s key reforms.
On the other hand, there was less of a slowdown in the various types of employment in the national public sector. Compared with both permanent and temporary employees, there was a 3.6 percent drop up to the tenth month of the year.
Staff hired under the Framework Law (Law 25,164) and employees under service agreements (self-employed under Decree 1109/17) experienced much sharper plunges, at 17.8 and 51.9 percent respectively.
Milei’s job chainsaw, therefore, tore through contracts issued under the Framework Law, with a decrease by US$2.06 billion. As for the permanent and temporary method, dismissals helped the government “save” US$1.13 billion, whereas in service agreements they added a further US$630 million, said the Ministry.
When it comes to calculating sums not allocated for the payment of severance, the government disclosed that “the average weighted salary as of October 2024, based on the type of contract, was calculated by applying the perpetuity concept, which estimates the value of future salaries which are no longer to be paid, after which a discount rate was applied to obtain its current value,” they added.
Officials pointed out that the elimination of state jobs “attests to the government’s commitment to reducing state spending and its determination to fulfil promises of efficiency and austerity in public administration.”
Unemployment falls
Despite the significant loss of jobs in the public sector, Argentina’s unemployment rate was 6.9 percent in the third quarter of the year – a drop from the 7.6 percent of the three previous months. However, unemployment remains 1.2 percent above last year’s level.
Assessing a breakdown of the data published by the INDEC national statistics bureau, the unemployment rate for women stands at 7.9 percent whereas for men it reached 6.2 percent.
As for the different geographical areas, those with the worst figures were Greater Buenos Aires and the Pampas, at 7.6 and 7.5 percent respectively. On the other hand, the region with the lowest unemployment rate was the Northwest, at 4.2 percent.
The INDEC report also observed that, based on the size of urban areas, the areas with the lowest population had lower unemployment rates. In conurbations with under 500,000 inhabitants, the unemployment rate was 4.9 percent of the working population, whereas in conurbations with over 500,000 inhabitants, it rose to 7.3 percent.
Finally, in relation to the educational level of unemployed people, 69.5 percent had finished secondary school, whereas 30.5 percent have technical or university degrees, or are university dropouts. In relation to the time spent looking for work, 65.4 percent have been job-hunting between less than a month and a year while 34.2 have been doing so for over a year.
– TIMES/PERFIL
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