Argentina’s Road to a Universal Wage

Abstract

Latin America is a region where high levels of inequality exist in many countries.The richest 10% captures 55% of the total national income, making Latin America one of themost unequal regions in the world. While Argentina has not had the same inequality level asothers - the richest 10% captures 30.36% of the total national income - there exists a level ofstructural income inequality that has been aggravated since 2016-2017. Today, a significantfraction of the country´s working class is living in poverty or, worse, extreme poverty.Currently, 36.5% of people are below the poverty line 1 , and 8.8% are below the extremepoverty line 2 , compared with 25.7% and 4.8% just six years ago, in 2017. Significantly, theproblem is no longer limited to unemployment but includes the new phenomenon of the"working poor", a large sector of people who, although working, do not earn enough of an income to overcome the poverty line, including those working in what is known as theeconomía popular (popular economy).These “workers in the popular economy” are becoming an increasingly important group interms of size alongside the prevailing two sectors of employed workers: registered formalemployees and unregistered, informal workers (undeclared employment). These areworkers without an employer, excluded from both the formal and informal labor market, whoperform labor-intensive activities under precarious conditions and are excluded from fullcoverage by the social security system.Originally a survival strategy that originated in the context of the crisis created byneoliberalism in the 1990s – illustrated by the well-known case of waste pickers whogathered trash for recycling (cartoneros) – this sector has persisted and grown to become astructural feature of the Argentine labour market, estimated today at a fifth of the labormarket (21.4%) which is, as is discussed later, still an underestimation.A major development of late has been the organization of this popular economy sector, fromits origins as forms of work to survive, into social movements with characteristics of tradeunions, that are fighting for these precarious jobs types of work to be transformed into legallyrecognized jobs with rights and benefits. Some of the organizations spearheading thesemovements are arguing for the state to implement a Universal Basic Wage (UBW), a policythat seeks to guarantee an income and a social protection floor for the entire adult working-age population between 18 and 64 years of age. It would cover those who are unemployed aswell as those who are working either under an unregistered salaried or self-employedrelationship, within the informal economy and in the popular economy. It would thus coverlow-income, highly vulnerable workers as well as a portion of registered salaried workers andsingle payers on lower incomes, in order to avoid possible disincentives to labor formality.The UBW is calculated to ensure a basic food basket per person, 2 with the goal of eliminatingextreme poverty in Argentina and guaranteeing a floor of social protection for the wholepopulation. The UBW is a first step on the path against inequality. If implemented, it wouldhave a profound impact on reducing inequality gaps. Once in place, it would be possible tothink of new policies that improve work, housing, and the quality of life of the population.