Can't we all just get along? Photo via parabuenosaires.com

The ongoing tensions between the government and unions over salary increases reached (another) boiling point yesterday when Labor Minister Jorge Triaca announced that this year’s salaries would increase somewhere between 20 and 25 percent instead of the 40 percent hike most unions are asking for.

Unions, concerned about how rampant inflation will impact their salaries’ purchasing power, have said they expect no less than a 40 percent raise and warned they will take action if their demands are not met (i.e paralyze the country with strikes). To read more about how inflation has increased these past few months, check out this article by The Bubble.

The backlash generated by Triaca’s statements was so strong that a few hours later, Cabinet Chief Marcos Peña and Finance Minister Alfonso Prat-Gay had to hold a press conference to clarify the  government had stuck to 20 or 25 percent because it estimates prices will go up 25 percent this year, and not because it wanted to put a “ceiling” on salary negotiations.

Labor Minister Jorge Triaca. Photo via La Nacion.
Labor Minister Jorge Triaca. Photo via La Nacion.

But before we take a look at how they all went at each others’ throats and guess at some possible outcomes, let’s quickly explain what these union/government negotiations — which we call collective bargaining, or paritarias in Spanish — are all about.

Collective bargaining season is that time of year, usually around February or March, when major union leaders and government representatives get together to discuss yearly salary raises, in order to accommodate workers’ purchasing power in relation to inflation, which is always a threat to Argentines’ salaries. As you may have assumed, these negotiations are usually plagued by conflict since no party wants to compromise on their demands. On several occasions, inability to reach an agreement has led unions to take actions such as not beginning the school year in public schools on time or launching national transportation strikes.

Ok, now we can move on to the fun part.

Clashes between the government and union leaders started shortly after the Macri administration took office. On January 1st, Prat-Gay “requested” that unions reduce their salary demands for this year in order to avoid having to lay off workers, given the country’s precarious economic situation. “Every union knows up to what point they can ask for salary raises without jeopardizing jobs,” Prat-Gay said back then.

Predictably, this didn’t go well with union leaders such as General Labor Confederation (CGT) leader Hugo Moyano, who saw Prat-Gay’s statement as a way of making “workers pay the price of deteriorating salaries.” Moreover, he recalled the government’s decision to eliminate export taxes on both industrial goods and most grain exports — measures designed to benefit the business sector — and asked the administration to “be as generous with workers as they have been with businessmen.”

However, the topic took the backseat during the rest of the month, partly due to an implicit truce between unions and the new administration and partly due to the insane mess generated by the three fugitives who escaped the General Alvear maximum security prison. You had forgotten about that, hadn’t you? Fun times. (Not really.)

But as the moment of truth began to near (or the time to negotiate approached, if you want to be boring about it) the topic made its way back into the headlines. The government’s announcement to hike energy and gas costs also caused the end of this quasi truce.

Upon statements from different union representatives saying that they wouldn’t take a salary raise that was under 40 percent, Labor Minister Jorge Triaca said yesterday the negotiations should oscillate between a 20 and 25 percent increase. Moreover, he explained the government is working on a package of bills — which would include a raise in the income tax floor retroactive to January 1st and eliminating the IVA tax on basic food goods — aimed at helping workers by increasing their salaries’ purchasing power.

Despite the announcement of the package, his statements were the equivalent of lighting up an industrial-size box of fireworks, as union leaders took turns at the microphone to get at Triaca’s throat. This is because unions thought his position put a ceiling on the salary increase discussions (at 25 percent).

When consulted about the statements, CGT’s Moyano put on his best Vito Corleone face and said “Well, those are [Triaca’s] objectives. If the government wants to put a ceiling on collective bargaining, it should say it outright and then we’ll start speaking another language” — i.e. paralyze the country with strikes.

However, he also showed he was willing to negotiate and rejected the idea of calling a national strike just yet: “If the Minister thinks inflation will oscillate between 20 and 25, we’ll discuss those numbers.”

Hugo Moyano says unions won't bend to government pressure. Photo via politicacentral.com.ar
Hugo Moyano says unions won’t bend to government pressure. Photo via politicacentral.com.ar

Argentine Central Workers (CTA) leader Hugo Yasky expressed himself in the same way as Moyano and said it’s “unacceptable to try to put a ceiling on collective bargaining,” and that they would fight to make sure salaries accommodated their purchasing power, “which is around 35 and 40 percent without taking into account the increase in utility costs that was announced in the prior days.”

Want more? Sure, why not.

The Buenos Aires Teachers’ union and provincial government representatives are set to meet this week to discuss raises.

In Buenos Aires Province, school workers usually lead the negotiations because they represent over half the province’s 500,000 public sector workers and can bring the province to a halt by shutting down its 17,000 schools.

So much talk of ceilings, so little time. If the government and unions don’t reach an agreement, though, we risk seeing a whole lot of strikes and a whole lot of trouble these next few weeks.