Is informal trade a response to the economic crisis in Argentina?

In the middle of the economic crisis that plagues Argentina Street commerce seems to be positioned as an option for those who seek to save as well as for those who need to generate income in a inflation context that puts pressure and an increase in poverty.

According to data from the National Institute of Statistics and Censuses (Indec), the inflation recorded in March 2024 reached 11%, raising the interannual rate to 287.9%, which keeps the South American country at the top of the countries with the highest inflation. in the world, surpassing Lebanon and Venezuela.

This increase in prices has particularly impacted vital sectors such as education, communications and basic household services, placing them at the top of the price increase indices. While food occupies seventh place in the March ranking.

To measure the magnitude of the economic challenge that Argentines face, it is enough to consider that, as of April 2024, the total basic basket, which includes food, transportation, clothing, education and health, reaches the figure of $773,385 Argentine pesos (880 dollars) according to Indec. However, the average total basic household basket is $347,082 Argentine pesos (395 dollars) according to the most recent report.

This panorama places a large part of the population in a vulnerable situation, with 12.3 million people in poverty, which represents 41.7% of the total population, and 3.5 million Argentines in poverty. destitution situation (11.9%).

Street commerce and the resurgence of ‘barter’ in the economic context of the South American nation emerge as alternatives for both consumers and an option to generate income.

For many citizens, street commerce is presented as an option to acquire second or third-hand products at more affordable prices, and even to ensure access to low-cost food. On the other hand, for those seeking to generate income, street trading becomes an unregistered work option in an increasingly complex labor market.

Despite an average wage increase of 14.4% in February 2024, in both the private and public sectors, the unemployment rate is 5.7%, with 0.8 million people actively seeking employment , according to figures for the fourth quarter of 2023, released by Indec.

In the city of San Luis, in central Argentina, the so-called ‘barter’ gains strength in this context. Selena Paez is originally from the province of Córdoba, but she has been living in the city of San Luis for more than twelve years. At this popular fair Selina sells cosmetics and clothing products. “This is my only income and I have to pay rent, I can’t make ends meet with my income,” she lamented in dialogue with the Voice of America. And he added that “when I don’t have enough, I go out and sell more. “I am experiencing the economic situation very badly now.”

Located in the former train station of that city, this mobile market receives hundreds of people every weekend who are looking for different products and at the same time, save on their family finances.

Juan Román Vega usually goes to the fair up to twice a week. “We look for prices, it is quite accessible for us. Not only are there affordable prices, but there is also good quality, buying here helps a lot to make ends meet,” he commented to this medium.

And although this type of informal markets always generated misgivings among registered merchants, who historically demand regulations, in this scenario they are not wary.

In front of the fair, Cecilia Luján, an employee of a warehouse where she sells basic necessities and drinks, said that, “barter favors many” and explained that her business is favored by the days of the fair, given the flow of people.

Will Milei’s labor reform increase employment?

The Government of Javier Milei promotes an important labor reform, through the
called “Law of bases and starting points for the freedom of Argentines”, which was approved in the Chamber of Deputies on Tuesday, April 30 with 142 votes in favor and 106 against.

The labor reform, which the Argentine government itself has said will generate more work, has points that were questioned in its treatment among deputies, and now, we will have to wait whether or not the Senate gives its approval to convert the project into law.

This reform that was discussed in the plenary session of the Chamber had 18 articles, in this smaller version of the Base Law.

In this project, the fines that are applied to employers who fire unregistered workers are eliminated, under the law. The trial period is also extended from three to six months or one year, something that was questioned by several sectors, because the Argentine labor system only allows a trial period of three months, a period in which the worker can be fired. without the right to compensation.

While, among the articles of this reform, there is the point in which independent workers are considered service providers, if the person who hires them has less than five people in their charge, who will be considered collaborators.

And finally, the Milei government project proposes that companies and unions
replace, if they wish, compensation for dismissals with an unemployment fund.

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