Agustín Salvia, director of the Social Debt Observatory at the UCA, analyzes the "two-speed economy"

Agustín Salvia agreed that Argentina is undergoing a shift in its economic model, although he offered a critical perspective on its social effects. In particular, he pointed to the growth of informality and precarious employment, along with a loss of productive capacity, and argued that the process could unfold with different timelines and public policy tools.

Informality, Poverty, and Loss of Productive Capacity

Salvia agreed that Argentina is undergoing a shift in its economic model, although he offered a critical perspective on its social effects. “We should celebrate fiscal balances, even processes of productive reconversion, even the attraction of investment,” he noted, although he clarified: “I believe there is a flight toward informality, toward informal employment and precarious work.”

According to the sociologist, the phenomenon affects industrial, commercial, and service sectors. “We are destroying them,” he asserted, and warned that this implies “a loss of human capacity, capital capacity, technological capabilities, and productive and entrepreneurial experience.”

For Salvia, the transformation could unfold with different timelines and tools. “Processes of this nature could be carried out under different circumstances, at different times, with an intelligent approach and a public policy that is not necessarily subsidiary, but fundamentally guiding,” he stated.

The impact on poverty is one of the main points of his analysis. “This shift towards informality creates a poverty floor from which it will not be easy to descend,” he maintained, estimating that this level is “above 30%.”

Investment, employment, and the challenge of creating formal jobs
 

The director of the Social Debt Observatory also linked investment to the capacity to generate employment. “Without investment, there is no productive reconversion, no job creation, and an increase in poverty,” he stated.

Regarding the RIGI (Integrated Guarantee Fund), he maintained that the incentives seek to compensate for the lack of sufficient private investment: “The RIGI are precisely intended to cover what the market does not provide.”

Salvia also pointed out that informality did not begin with the current economic process, although he considered that it accelerated during the last two years. According to his data, “48% of the population does not participate in social security,” and he estimated that a significant portion of workers are outside the formal system.

The sociologist also focused on the historical evolution of employment: “In 2011, we had 6 million formal workers,” and, comparing that to the present, he stated: “There has been no job creation in Argentina.”

Finally, he warned about the social cost of the productive transformation: “I don’t believe the future will be very prosperous for the lower and middle classes in Argentina; rather, I believe it will be for the elite.”