Argentina is overhauling workers’ rights with landmark legislation that is in line with President Javier Milei’s economic “shock therapy” but runs counter to decades of emphasizing workers’ benefits here.
“HISTORIC. We have labor modernization,” the tousle-haired libertarian celebrated on social media after the labor law was passed in February. The new legislation is now fully in force, after a judge’s partial suspension was overturned on procedural grounds late last month.
The reform aims to encourage productivity by simplifying labor relations and ending a culture of work-related litigation. It weakens the country’s powerful unions and makes it easier for employers to hire and fire people.
Why We Wrote This
Argentina’s overhauled labor law is meant to modernize the workforce and loosen the grip of historically powerful unions. But in an administration focused on cost-cutting, some workers find the legislation one shock too many.
From the moment Mr. Milei took office in December 2023, his brash style and cost-cutting agenda marked a sharp departure from Argentina’s tradition of social solidarity and state-provided protections. The revised labor law goes a step further, eroding historically held rights at a time of growing hardship for the middle class, as well as a dwindling patience with the high social cost of the president’s austerity measures.
“The government maintains that the labor market has changed … and that we have labor laws that protect fewer and fewer people. And it has a point,” says Lucila D’Urso, a professor at the Universidad Nacional de General Sarmiento in Buenos Aires. But, she adds, the new legislation “doesn’t seek to protect those who are currently unprotected in the labor market; instead, it takes rights away from those who already have them.”
“Argentine identity”
Mr. Milei has succeeded in reducing inflation, getting it down, to 32.6% in March from over 211% when he took office, and brought some order to the country’s public finances. But with unemployment at 7.5%, a record 43% of the workforce informally employed, real wages falling, and monthly inflation edging up again, most Argentines aren’t feeling better off.
“Formal workers like me live under the poverty line,” says Natalia Fernández, a state health administrator from Rosario, who joined a recent march in the capital. It was organized by the General Confederation of Labor (CGT) on the eve of Labor Day, May 1.
“Sometimes, we come to celebrate. … This year, we’re protesting,” she says, the air around her thick with smoke from barbecued sausages and firecrackers.
The revised labor law raises the maximum legal workday to 12 hours, reduces severance pay, and restricts the right to strike and hold assemblies.
Much of the business sector supports the overhaul, with organizations such the National Union of Entrepreneurs, Small and Medium Enterprises and Producers defending deeper change. The organization was founded in 2023 to back Mr. Milei’s labor agenda. The old legislation condemned small and medium enterprises “to operate under rules from 40, 50 years ago – that are impossible to apply in the digital, modern economy of 2026,” Exequiel Chapur, a leading member of the organization and a supermarket owner in the city of Córdoba, told local media.
Yet Ms. Fernández argues the legislation attacks the core of Argentine identity. “The workforce is the backbone of our community,” she says. “For Argentina, work is truly an important social structure, and one that is being dismantled.”
A nearby banner bears the face of Pope Francis, the late Argentine pontiff, who believed labor unions gave voice to the voiceless.
Not everyone shares Ms. Fernández’s unwavering support for unions, which initially gained social and political power almost a century ago in the populist government of Juan Domingo Perón. Many Argentines today dismiss unions as corrupt – echoing Mr. Milei, who lumps union leaders with the “caste” he abhors. And even some unionized workers are disillusioned with the leadership of traditional organizations like the CGT, considered out-of-touch with their base, says Dr. D’Urso.
Other forms of organizing, in workplace groups that are separate from traditional unions, are emerging, she says. Take Sebastián Tesoro, a unionized factory worker. He accuses the CGT of being complacent in its response to the labor reform.
“There is a lot of anger toward union leaders,” he says, adding that workers like him continue to fight for their rights without the CGT’s organizing.
Mr. Tesoro is one of more than 900 people who lost their jobs at the Fate tire factory this year. The sprawling complex in San Fernando, in Buenos Aires’ northern suburbs, closed its doors in February, in part because it was unable to keep up with competition from China after Mr. Milei lifted restrictions on imports.
A handful of workers from the SUTNA tire workers’ union, to which Mr. Tesoro belongs, have occupied the plant since, demanding its reopening.
Fate was once an icon of national industry. Its closure reflects a wider crisis in the manufacturing sector that, along with struggles in other key areas such as construction and retail, is hitting the urban middle classes the hardest.
Rodrigo Abd/AP
Looking out for each other
Even among people who voted for Mr. Milei’s free-market, small-state program, there is growing fatigue with the pace of economic recovery. The Milei government’s approval rating in April hit its lowest point so far, at 35%, according to an AtlasIntel poll. Unemployment, inflation, and the economy are top voter concerns, after corruption.
Real estate broker Eduardo Prassolo voted for Mr. Milei, but worries about the impact the president’s policies are having on Argentina’s social fabric. “He said he would adopt harsh austerity measures, and he has. But it’s not benefiting the people who need it the most,” he says, walking his dog in a leafy square in Buenos Aires’ swanky Palermo Chico neighborhood.
“I have the impression that this wave [of support for liberal and libertarian policies] is dissipating, and that labor rights, social protections, and public services are regaining historical support,” says Julia Soul, a social anthropologist and researcher at Argentina’s National Scientific and Technical Research Council.
Solidarity was on display back at the Fate tire plant, where laid-off workers organized a May Day gathering with food and music outside the shuttered gates.
“We came to support the workers. It’s not right that they’ve been left without a job,” says Paula Fernández, a local who stopped by with her husband, Eduardo Patroni. They say they consider all politicians corrupt, and don’t vote.
The couple work in private healthcare, and even with a salary four times that of a factory worker, they are struggling to make it through each month, they say. But they will buy empanadas to chip in for the workers, says Mr. Patroni, holding a plastic container of locro, a traditional stew the former Fate employees were dishing out. “People here are decent, they look out for each other.”