Layoffs in Argentina reach 200,000 in first eight months of Macri administration.
The latest monthly labor market report published by the Center for Argentine Economic Policy (CEPA), revealed that the number of layoffs and suspensions nationwide increased by 15,137 in July, reaching a total of 194,422 since the right-wing Mauricio Macri administration took office on December 10.
July layoffs, as has been the case since the beginning of April, were accounted for almost entirely by the private sector, which shed 14,149 jobs last month. Given the ongoing pace of private-sector layoffs amid the worst recession since the 2002 crisis, total layoffs are estimated to have surpassed the 200,000 figure by August 10 - the Macri administration's eight-month milestone.
Manufacturing overtook construction as the principal source of layoffs in July, accounting for 11,391 - or 75% of the monthly total. Manufacturing layoffs were in turn led by the auto industry, whose output is down by 14% so far this year despite a sharp cut in luxury taxes decreed by President Macri last December. A total of 2,865 autoworkers were suspended in July, for a total of 10,007 since December when tires and autoparts makers are included.
Makers of steel, aluminum, and other metals were a bright spot in the report with just 385 layoffs in July; but since December this sector has shed 13,721 workers - making it the largest single source of industrial job losses.
The textile and garment sector, which had largely avoided mass layoffs until June, collapsed in July and logged 2,631 layoffs - nearly half the 5,572 total since December. Significant layoffs were also registered in the petroleum (1,353), beef (1,063), and appliance (1,042) sectors in July as the recession continues to depress demand.
Layoffs is the service sector (2,643) continued to accelerate mostly due to retail job losses. Retail stores alone shed 1,427 workers in July as store closures mount amid a fall in retail sales volume of 8.1% according to the CAME medium business chamber.
The service sector has nevertheless been a relative bulwark during the current labor market crisis: its 10,791 layoffs since December account for 0.1% of all service sector jobs in Argentina, compared to 67,392 layoffs in the public sector (just under 3%), 57,649 (over 3%) in manufacturing, and 58,590 (over 7%) in construction.
Industrial output, according to the Argentine Industrial Union (UIA), has fallen by 4% since Macri took office; but imports have risen by 9% despite the initially protectionist effects of Macri's 40% devaluation and the ongoing recession as the administration has moved to liberalize imports.
The UIA, the country's leading manufacturers' association, had endorsed Macri in last year's election after receiving assurances that import permits and regulations would be more flexible for capital goods and intermediate goods used by manufacturers but not on finished items themselves.
The combination of "free trade" policies and austerity measures have earned President Macri plaudits from the IMF, the Obama administration, and vulture fund financier Paul Singer (who in April collected an 1,180% payout from Macri on old defaulted bonds). UIA President José Urtubey recently described these measures, however, as a "perfect storm."
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