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Summary of the new proposed labor reform
- Thread starter bapal
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Finance Prof
Well-known member
Yes, I have to give Milei credit for this. Will be great! Wonderful they passed it.
Argentina has taken a decisive step toward modernizing its economy with the approval of President Javier Milei’s labor reform - a structural overhaul aimed squarely at restoring confidence, stimulating hiring, and unlocking private-sector growth.
For decades, rigid labor laws, high dismissal costs, and excessive litigation discouraged employers - particularly small and medium-sized enterprises — from expanding their workforce. This reform directly addresses those barriers.
The new framework reduces dismissal costs, allows severance payments to be structured in installments, and extends the probationary period to one year. These measures provide businesses with greater flexibility and predictability, enabling them to hire with confidence rather than hesitation.
Crucially, the reform also establishes legal certainty: once severance is paid in cases of dismissal without just cause, it fully extinguishes any subsequent legal or extrajudicial claims. This eliminates the long-standing practice of collecting severance and then pursuing costly lawsuits — a dynamic that has historically fueled labor litigation and deterred formal employment.
By reducing risk and modernizing employment rules, the reform aims to bring more workers into the formal economy, support entrepreneurship, and make Argentina more competitive as an investment destination.
For the business community, this represents a long-awaited shift toward a labor system that prioritizes job creation, transparency, and economic growth.
Huge win for businesses!
Argentina has taken a decisive step toward modernizing its economy with the approval of President Javier Milei’s labor reform - a structural overhaul aimed squarely at restoring confidence, stimulating hiring, and unlocking private-sector growth.
For decades, rigid labor laws, high dismissal costs, and excessive litigation discouraged employers - particularly small and medium-sized enterprises — from expanding their workforce. This reform directly addresses those barriers.
The new framework reduces dismissal costs, allows severance payments to be structured in installments, and extends the probationary period to one year. These measures provide businesses with greater flexibility and predictability, enabling them to hire with confidence rather than hesitation.
Crucially, the reform also establishes legal certainty: once severance is paid in cases of dismissal without just cause, it fully extinguishes any subsequent legal or extrajudicial claims. This eliminates the long-standing practice of collecting severance and then pursuing costly lawsuits — a dynamic that has historically fueled labor litigation and deterred formal employment.
By reducing risk and modernizing employment rules, the reform aims to bring more workers into the formal economy, support entrepreneurship, and make Argentina more competitive as an investment destination.
For the business community, this represents a long-awaited shift toward a labor system that prioritizes job creation, transparency, and economic growth.
Huge win for businesses!
import export
Well-known member
If he can stay out of trouble and scandals he can make a meaningful change in Argentina. If his sister gets caught again he needs to get rid of her. I have a feeling she will be his downfall. She can't keep her hand out of the cookie jar. Watch and see. She had almost no net worth coming into this. My hunch is she will leave with millions somehow even though her position pays very little. Still I like many of the changes.
For years, Peronism and especially Kirchnerismo kept prices and tariffs artificially suppressed. That was their model. Hold everything down through controls, subsidies, manipulation. Gas? Historically it floated between $0.75 and $1 per liter. By November 2023 it was around 30 cents USD. That’s not “cheap.” That’s distortion. And distortions always come with a bill.
Then Milei walked into a house that was basically on fire.
People say prices exploded under Milei. True — but context matters.
He inherited:
You can’t unwind that gently. You rip the band-aid off or the patient dies slowly.
Now, did Milei make communication mistakes? Absolutely. Did he steal money with Libra? Yes. Did his sister steal money from the social program? Yes. Probably much less than Cristina but they need to avoid that. He can write his own ticket to fame and fortune once he leaves office but they need to see the bigger picture and stop all of that.
When he talked about dollarization and called the peso “worth crap,” business leaders panicked. Many big companies hedged aggressively, pricing goods as if the peso would crash to 2,000 or 2,500 per dollar.
That crash never happened.
But guess what? Prices didn’t come back down either.
So what happened? You ended up with goods priced at a worst-case exchange rate that never materialized. That’s not Milei “raising prices.” That’s the private sector protecting itself — and then refusing to adjust downward.
Add to that a market structure where many industries are quasi-monopolies. Take tires. A tire that costs $40 in Paraguay or Chile costs $100-$140 in Argentina. Why? Limited competition. Milei opened imports to create pressure. Some local companies responded by importing… and still charging local monopoly prices.
That’s not libertarian reform failing. That’s decades of protected oligopolies resisting change.
And here’s the bigger point:
Milei spent his first year just stabilizing a Central Bank that Kirchnerismo left underwater. You cannot dollarize an economy without reserves. You need $20–30 billion. Today reserves are still negative territory, though improved from where he started. That’s why the “cepo” — capital controls — can’t fully disappear yet. You don’t remove the clamp until the patient can breathe on their own.
The high prices we see today are the delayed consequence of:
- Years of monetary abuse
-Artificially suppressed tariffs
-Subsidy addiction
-A bankrupt Central Bank
-And a concentrated corporate structure
Milei didn’t create those distortions. He exposed them.
Stabilization hurts before it heals. Quantitative tightening instead of endless money printing is painful at first — but it’s the only way out.
You can debate style. You can debate messaging. But on substance? He inherited a fiscal and monetary disaster and chose discipline over denial.
That’s not failure.
That’s reform.
For years, Peronism and especially Kirchnerismo kept prices and tariffs artificially suppressed. That was their model. Hold everything down through controls, subsidies, manipulation. Gas? Historically it floated between $0.75 and $1 per liter. By November 2023 it was around 30 cents USD. That’s not “cheap.” That’s distortion. And distortions always come with a bill.
Then Milei walked into a house that was basically on fire.
People say prices exploded under Milei. True — but context matters.
He inherited:
- A Central Bank with zero net dollar reserves
- And not just zero — actually $12 billion in debt
- Massive monetary emission
- A fake exchange rate system
- An economy addicted to subsidies and price caps
You can’t unwind that gently. You rip the band-aid off or the patient dies slowly.
Now, did Milei make communication mistakes? Absolutely. Did he steal money with Libra? Yes. Did his sister steal money from the social program? Yes. Probably much less than Cristina but they need to avoid that. He can write his own ticket to fame and fortune once he leaves office but they need to see the bigger picture and stop all of that.
When he talked about dollarization and called the peso “worth crap,” business leaders panicked. Many big companies hedged aggressively, pricing goods as if the peso would crash to 2,000 or 2,500 per dollar.
That crash never happened.
But guess what? Prices didn’t come back down either.
So what happened? You ended up with goods priced at a worst-case exchange rate that never materialized. That’s not Milei “raising prices.” That’s the private sector protecting itself — and then refusing to adjust downward.
Add to that a market structure where many industries are quasi-monopolies. Take tires. A tire that costs $40 in Paraguay or Chile costs $100-$140 in Argentina. Why? Limited competition. Milei opened imports to create pressure. Some local companies responded by importing… and still charging local monopoly prices.
That’s not libertarian reform failing. That’s decades of protected oligopolies resisting change.
And here’s the bigger point:
Milei spent his first year just stabilizing a Central Bank that Kirchnerismo left underwater. You cannot dollarize an economy without reserves. You need $20–30 billion. Today reserves are still negative territory, though improved from where he started. That’s why the “cepo” — capital controls — can’t fully disappear yet. You don’t remove the clamp until the patient can breathe on their own.
The high prices we see today are the delayed consequence of:
- Years of monetary abuse
-Artificially suppressed tariffs
-Subsidy addiction
-A bankrupt Central Bank
-And a concentrated corporate structure
Milei didn’t create those distortions. He exposed them.
Stabilization hurts before it heals. Quantitative tightening instead of endless money printing is painful at first — but it’s the only way out.
You can debate style. You can debate messaging. But on substance? He inherited a fiscal and monetary disaster and chose discipline over denial.
That’s not failure.
That’s reform.
Excellent and good points. This mess can't be turned around quickly. It will take a few years. This employment reform was needed!
This is a decisive step by Argentina toward modernizing the country’s job market and strengthening private-sector confidence. Without this I don't think foreign companies would invest here. And even with this they might want to stay on the sidelines.
With this measure, the Executive Branch advances one of the central pillars of its economic program: reducing rigid labor regulations and encouraging hiring amid a prolonged economic downturn.
The reform lowers dismissal costs, permits severance payments to be structured in installments, and extends the probationary period to one year - a move the government argues is essential to help small and medium-sized businesses overcome hiring hesitation and expand their workforce.
Importantly, the legislation clarifies that once severance is paid in cases of dismissal without just cause, it fully extinguishes any related legal or extrajudicial claims. This provides long-awaited certainty to employers and reduces the culture of excessive litigation that has historically discouraged formal employment.
All those that I know that own a company here views the reform as a necessary structural correction that simplifies labor relations, reduces legal risk, and lays the groundwork for sustainable job creation. I'm against all the corruption but I gotta give Milei credit where credit is due!
VLLC!
Betsy Ross
Well-known member
Awesome to see this push through. It gives me hope that Argentines really want change. Milei has been doing everything he said he will do. Locals knowing full well that he would drastically increase utilities and still supporting gives me faith that long term things can change.
It sounds like not everyone was happy with the bill passing. 🤣
apnews.com
www.batimes.com.ar
Argentina's Senate backs President Milei's contentious labor overhaul after protests
Argentina’s Senate has given its overall approval to a labor overhaul that is considered crucial to President Javier Milei’s shock therapy program after hours of debate that unfolded in the shadow of a mass protest outside Congress.
apnews.com
Protesters, police clash at protest over Milei's labour reform
Protesters angry over proposed labour reform clash with police outside Congress, as lawmakers debate plans to facilitate work contract flexibility and make it easier and cheaper to fire staff.
www.batimes.com.ar
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