Will Covid-19 Create a New Labor Market in Argentina?

May 29, 2020

The Covid-19 pandemic has accelerated digitization and automation processes, which will have a significant impact on work in Argentina. In the recent months, formal and informal employment deteriorated faster than ever expected. Argentina is rapidly moving toward a new reality that can either deepen informality and inequality or be witness to long-overdue exponential growth and use of technology in work.

In this commentary, the author explores the effects of social distancing during the Covid-19 pandemic in work in Argentina. He sets the current scene in Argentina, shares how the Argentinian population is reacting to the public health crisis, and highlights a series of issues that need to be addressed in the short term, including the use of evidence-based decisionmaking for policymaking, universal income sustainability, approaches to protect the most vulnerable populations from unemployment and under employment, and initial legal framework considerations for mainstreaming telework. The author bases much of his analysis off of a survey conducted by the Work of the Future Initiative of the International Network for Education and Work (RIET) in Argentina.

On Work and Telework in Argentina

The Covid-19 quarantine accelerated the integration of new information communication technologies (ICT) into work in Argentina. ICT tools like Skype, Zoom, Meet, or Hangouts previously thought of as merely entertainment tools in the past have in fact increased productivity and visibly contributed to keeping the economy moving forward. If Covid-19 had occurred 15 years ago, working remotely would not have been feasible given both the absence of tools and bandwidth.

In Latin America, automation processes were much slower than in other regions due to the lack of strategic investment in the telecom sector, ineffective labor regulations, and, perhaps, lack of leadership. This public health crisis forced a disruption. Unemployment will likely continue for those in more mechanical professions not yet automatized and modernized. These workers will lose their jobs due to the pandemic and are likely to be permanently replaced by technology. Jobs that include administrative tasks such as document printing, customer service, or collection services are also likely to be replaced. These jobs will not necessarily be those with the lowest incomes; they are likely to be the ones that focus on routine and repetitive tasks that can be replaced through use of artificial intelligence. Ironically, some low-paying jobs may become even more necessary. These include elderly care, nursing, and, undoubtedly, delivery of online purchases.

The Covid-19 pandemic is generating many changes for individuals and organizations in both the public and private sectors. Mandatory telework is having a significant effect on the way we work, the way we communicate, how we lead, and building and managing teams.

How Is the Argentinian Population Reacting?

RIET’s Work of the Future Initiative conducted a survey on “teleworking in the context of social isolation in April 2020.” The results show that 80 percent of the workforce is engaging in telework. Within this group, 11 percent were already teleworking before the mandatory isolation period started on March 19.

In this rapid response to the pandemic, many organizations are working “day-by-day”—47 percent of respondents reported receiving their “to-do” list daily from their supervisors, and 27 percent weekly. This could be the result of insufficient time to plan for this change, and it should be noted that this study was carried out during the fourth week of social isolation.

Among other capabilities, respondents who work in a full-time jobs mostly appreciate that, in the context of teleworking, their managers can trust them and provide extra flexibility. In terms of trust, many employees expressed that their supervisors are more willing to set new responsibilities and are more open to proposals and new ways of collaboration. In terms of flexibility, managers seem more open to changed deliverables and meeting times, family issues, etc. On the other hand, employees expressed concern over a lack of communication skills and emotional support from their bosses.
Even though the study is recent and based on a still-evolving event, data show that work culture in Argentina is changing. Although previously just 1 in 10 individuals teleworked, today 63 percent wish to continue teleworking post-pandemic.

Employees express two main reasons for continuing to telework. First, they argue they are more productive, which could be due to the better use of their time and goals in virtual meetings as well as the absence of unforeseen interruptions. Some previous studies provide evidence of a relationship between these aspects and productivity.

Second, teleworking saves travel time and money associated with commuting. In this case, there is a wide variation between these two aspects regarding the labor hierarchy. The highest-paid people focus on time, while the lowest-paid people focus on money. However, the shortening of commutes should be noted as a unique aspect.

In all cases, however, it should be noted that the vast majority of respondents wish to partially replace the working day with teleworking (83 percent), contrasted with the overwhelming minority who want a complete replacement of the working day (7 percent).
On the other hand, among those who do not want to continue teleworking, two central arguments come up. First, they do not want family and work life to overlap. Second, they state that part of their tasks can only be carried out at the workplace. Finally, it is relevant to note that young people under 23 years old are significantly more interested in working on-site (between two and three times more than other age groups). Although this was not the focus of the study, it is possible that this position could be related to the relevance of in-person interaction as an introductory strategy to the world of work.

Some Questions Remain Unaddressed

Quarantine and social distancing during the Covid-19 pandemic will undoubtedly have a great impact on our society, particularly in the world of work. We are already beginning to see some of these effects, including increased social inequality and the expansion of telework and online training and education.

At the same time, many questions arise, both for sectors that will generate new employment opportunities and for those others where unemployment will last longer or become permanent.

It is essential that a new post-Covid-19 agenda is prioritized where opportunities for greater well-being can be accessed and enjoyed by all.

Can we guarantee decisionmaking based on reliable scientific studies?

In Latin America, a detailed analysis of government measures on the pandemic shows that too often reliable and accurate information has not been used to support distancing measures. In this context, there is a serious risk of making mistakes if mechanisms are not established to identify the social, educational, productive, and economic impact the pandemic has on the population.

Will we find ways to sustain universal basic income?

Around the world, calls for universal basic income and other forms of non-work compensation have been growing, given the potential for growing unemployment as a result of greater use of artificial intelligence tools. The pandemic has accelerated these processes. Compensations and subsidies, especially the most permanent ones, will generate debate—as is already happening in many developed countries—about the importance of employment for a society not only as a means of generating income, but as a task that offers purpose and dignity as well.

Can we protect the most vulnerable people from unemployment?

In Latin America, we are seeing growing unemployment in unreported and less-specialized sectors. Unreported employment has always been of great importance to the country’s economy. Surprisingly, to date, no national plan has been put in place to eradicate unreported employment in this pandemic. It is of crucial importance today to strengthen work transition initiatives for these jobs, which are highly precarious.

In effect, our study reflects three additional benefits in this work transition: (1) telework eliminates many of the costs associated with transportation and movement; (2) unregistered employment eases the transition to electronic money, which improves the return on money; and (3) improved digital skills increases the ability to transfer knowledge to other jobs and thus boosts employability.

What kind of education will this new labor market demand?

This “circumstantial homeschooling” has revealed different responses to the roles of schools and teaching. It undoubtedly calls into question whether in-person classrooms are the only option for quality learning. Surely, parents will value schools and teachers more, but they will also have found a new role for themselves in the education of their children. The use of digital education at all levels is here to stay. Learning occurs all the time and everywhere, not just during school hours. The pandemic has made this all the clearer. And, although this was already present before the pandemic, inequality in knowledge access has been made even more evident.

The vulnerability of certain schools and students has also become more obvious. And less access to education leads to less social mobility. Family income and parents’ formal education levels have always been factors that influence the quality of education. However, it has become clear during this pandemic that access to the internet, virtual materials, and direct contact with teachers are just as important.

Will new regulations be designed for teleworking?

For developing countries, telework is also an opportunity to increase their income from the export of services without migration or the loss of available human capital. For this to occur, it will be necessary to expand the debate on new regulations on teleworking and the workplace, digital presence, work and information security, coexistence and labor discipline, collective agreements, and much more.

Gabriel Sanchez Zinny is a senior associate (non-resident) with the Americas Program at the Center for Strategic and International Studies in Washington, D.C. Santiago Fraga is secretary of research, science, and technology at Dirección General de Cultura y Educación in Buenos Aires province.

Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

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