– Argentina doesn’t do things too different from the rest of the region. The main policy is the AUH, a money transfer program similar to those applied in most of Latin America. It’s a welcome policy because of the low level of filtration for homes that don’t need it and because it minimizes patronage. Furthermore, it has an immediate impact on the well-being of the beneficiaries through monetary transfer and, according to several evaluations, helps to improve the accumulation of human capital in the education and health of the beneficiaries, which improves their prospects in the medium and long term. Logically, that’s not enough.
– Over time, a series of “employment programmes” have begun to gain importance, but they work in the orbit of Social Development, with more discretionary characteristics and where the granting of benefits is not automatic but rather through intermediaries . This does not imply that they are bad in themselves, and perhaps intermediation manages to resolve, even partially, the problems of scarce information and territorial management capacity that the State has to face. But they are less transparent programs and there are almost no evaluations of their functioning and their impact on beneficiaries. The maintenance and expansion of this type of policy over time suggests that the state no longer sees it as a tool to solve a temporary problem, but rather as a way to dilute its responsibility in solving an increasingly structural problem. . Furthermore, there is the misconception that social policy can and should be based on almost all economic policies. The most paradigmatic case is that of energy subsidies. Attempting to implement social and/or income distribution policy with these tools ends up being counterproductive from all points of view.
– Logically, the instability of our country’s economy, with high inflation as a salient feature of this phenomenon, makes it difficult to monitor and evaluate the functioning of policies. But I think this is not the main impediment for the state to understand and control which things work and which don’t. The role that public information on the functioning of policies, the evaluation of their impacts and the continuous improvements in the design of these policies should play ends up being largely replaced by the “good intentions” with which the different policies are implemented. To put it another way: many times more value is given to the initial objective with which a policy is implemented than to the actual results.
– Unemployment has actually decreased in 2022. And it did so in a context in which labor participation has increased, a factor which often tends to drive up unemployment. But, in this case, the increase in employment has more than compensated for this increase in labor participation. The negative part of this story is the composition of that increase in employment: it was mostly informal, dependent or self-employed work. In part, the explanation for the increase in employment could be that the de facto flexibility that has occurred due to the fall in real wages, combined with the growth of the economy in the first part of the year, has led to the hiring of additional workers .now relatively cheaper, but part of this increase in employment, especially self-employment, is also explained by the need for households to generate more income in this context of declining real wages. I don’t see it very likely that employment will continue to grow too much in 2023. On the one hand, everything seems to indicate that economic activity will not have a very virtuous momentum this year, so the probability that the demand for labor will show significant growth is very low. On the other hand, the employment rate is at fairly high levels in historical terms, so one would not expect it to continue growing.
– This month INDEC will report on the value corresponding to the second half of 2022, and everything seems to indicate that it will be a value above 39%, it is even possible that it is close to 40%. It is difficult to predict how poverty will end in 2023, but this does not seem to be a very good year to expect a significant reduction, especially considering that it is possible that the corrections mentioned will drive it even higher. In any case, it will depend on how much inflation will be in 2023. If it is close to the number that the government is targeting (60%), we are likely to end the year with a poverty rate below 40%, if it gets close private forecasts (90-100%) surely the current administration will end up with a poverty rate above 40%.
– The opening processes, and the policies that accompany these phases, generate variations in relative prices and this necessarily involves changes in the production structure, with reallocation of production between sectors, i.e. of what is produced, and with changes in the way of producing within within all sectors, i.e. how it is produced, with a bias towards processes that incorporate more capital and technology and use more skilled labour, and with changes in the place of production, where it is produced. This happened largely in the 90s.
– Is that processes of this type are not neutral from a social point of view, they generate winners and losers, both between groups of workers and between productive sectors and regions of the country. The negative impact this can have on socioeconomic conditions can be significant in the short term, particularly for unskilled workers, and the extent of this “short term” depends on how quickly factors of production are reallocated between sectors . , which in turn depends on the speed of the opening process and on the policies that accompany the consequent productive reconversion process. In general, the available evidence indicates that the conversion takes time, that it doesn’t complete quickly and automatically.
In this sense, the legitimacy and social sustainability, and ultimately the feasibility of an economic restructuring process, will certainly depend on the policies that will be put in place to protect the losers in the short term and to facilitate their reintegration in the medium term. In other words, the feasibility of opening up the economy will depend on social policy and for this we will continue to need social policies that have existed for a long time today, and we will make them more efficient by improving their design.
Source: Clarin
