Why the employment level does not show recovery

Although some macroeconomic indicators suggest signs of recovery, the Argentine labor market remains strained and stagnant. In the first quarter, figures show superficial stability: the employment rate remains virtually unchanged from the same period last year, with unemployment at 7.9% and an activity rate of 48.2%.

However, behind this static picture, structural transformations are deepening that affect the quality of employment and the sustainability of the labor system , says Laura Caullo, lead researcher in the Employment and Social Policy Area of ​​the Mediterranean Foundation.

The problem is no longer the number of jobs, but their composition. Informal employment continues to rise : it represents 42% of the total employed, compared to 40.8% in 2024. At the same time, registered salaried employment in the private sector remains stagnant , at 6.2 million workers. This duality reinforces a fragmented market, with deep inequalities in access to rights and working conditions.

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The weakness is also reflected in the evolution of income : real wages have not yet recovered to levels prior to the start of the current administration, limiting the impact of employment on improving purchasing power and domestic demand.

This scenario is sustained by a network of outdated labor regulations , high costs of formal hiring, and a judicial system that, far from resolving conflicts, actually multiplies them. In this context, informality and self-employment become survival strategies for employers and workers , trapped in a system that penalizes formality and rewards conflict.

A critical example of this dynamic is the occupational hazards system. Over the last decade, labor litigation has escalated to the point of jeopardizing its viability.

In 2017, with the passage of Law 27,348, an attempt was made to ease the burden on the courts by establishing Medical Commissions as the first instance for resolving disputes between workers and Workers' Compensation Insurance Companies (ART). Initially, the measure was effective: lawsuits fell by 36% between March 2017 and March 2018.

However, over time, the partial implementation of the law and the lack of structural reforms diluted its impact. Although workplace accidents are trending downward, lawsuits have risen again .

In the first quarter of 2025 alone, 25,472 new lawsuits were reported, while in March, more than 300,000 cases were pending in the courts. According to estimates by the Workers' Compensation Insurance Union (UART) , some 130,000 lawsuits could be filed this year, a record number.

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The heart of the problem lies in the provincial courts' expert system. Medical experts charge fees that increase according to the percentage of disability they determine, which encourages inflated evaluations and costly lawsuits. Minor cases can turn into multi-million-dollar lawsuits if they reach the courts.

Far from requiring new legislative reform, the solution lies in fully implementing what the law already provides: the creation of independent and impartial forensic medical bodies and a fee system linked to the work performed, not the outcome of the report.

High levels of labor litigation not only burden the justice system; it also impacts the real economy. Companies, especially SMEs, must allocate increasing resources to protect themselves against potential conflicts, which discourages formal hiring .

In an environment of an appreciated real exchange rate and open trade, these additional costs affect competitiveness and limit the capacity of registered employment to expand. In many cases, the fear of a lawsuit can be the difference between hiring a worker or not.