Argentina’s Milei lays off 5,000 government employees

This Tuesday, after the Christmas recess, Argentine President Javier Milei resumed working on his goal of dismantling the State. In just his third week of government, the far-right president has signed a decree that terminates the contracts of government employees hired in 2023. The government estimates that “more than 5,000″ workers are affected, while other sources, such as the Association of State Workers (ATE), estimate that the figure exceeds 7,000. Nevertheless, that number could grow, since the government will also review in the next 90 days the contracts of government employees hired before January 1, 2023. Needless to say, the unions are on alert.

The decree, published this Tuesday in the Official Gazette, establishes that government workers hired since January 1, 2023, will not have their contracts renewed. The measure does lay out some exceptions: for example, workers who are part of “quotas regulated by law or other types of special protections,” such as people with disabilities, or personnel who are considered “indispensable.” The text also anticipates that the rest of government contracts will be subject to “an exhaustive review” in the next 90 days.

In his first speech as president, Milei had already anticipated that the changes his administration would embark on would be heavily paid for by the State, not by the private sector. The cutbacks began with the Cabinet of Ministers: the far-right leader cut the positions down to just nine, half of those of the previous administration. And Minister of Economy Luis Caputo announced, as part of the first economic measures, the reduction of the State workforce. The decree published this Tuesday is one more step in the government’s roadmap and aims to lead to a “better functioning” public administration.

The Argentine public sector has almost 3.5 million salaried employees, according to the latest data from the Ministry of Labor, of which one tenth work for the federal administration. 2.2% of the country’s GDP is spent on paying federal workers, according to a report by the consulting firm Ieral-Fundación Mediterránea, a percentage that has been reduced since 2015, when it accounted for 3.3% of the country’s GDP. According to that analysis, the share of public employment in the budget is similar “to Scandinavian countries” and “Japan and Germany.”

In a statement, the Association of State Workers (ATE) described the move as an “aggression” and expressed that public employees “perform tasks that are indispensable.” “Let no one expect us to accept even a single dismissal,” warned Rodolfo Aguiar, secretary general of the ATE.

Protests have been called for this Wednesday, as unions prepare to demonstrate against this decree and the one Milei signed a week ago, which included 300 measures to scale back the State. The Dec. 21 decree repeals laws, eliminates dozens of state regulations, enables the privatization of state companies such as the oil giant YPF, and opens the door to operations in dollars. The move also kick-started the process to make the country’s labor market and the health system more flexible.

Workers — who consider that the consequences of Milei’s reforms fall on the shoulders of the most vulnerable sectors of the population — will take to the streets despite the fact that the president’s administration has instituted new protocols against street blockades during demonstrations. The new security plan — announced by Minister of Security Patricia Bullrich almost simultaneously with the economic measures — was first put into practice on December 20, when tens of thousands of people came out to protest surrounded by heavy security measures.

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