Formalizing independent work. Changing labour regulation in Argentina (1998-2007)

POBLETE, LORENA

Ginebra

Congreso; 3rd Conference of the Regulating for Decent Work Network, ILO; 2013

Organización Internacional del Trabajo

In Argentina, independent workers represent 26% of those who work. These workers form a very heterogeneous group that includes employers of small companies, self-employed workers (professionals and non professionals), work cooperatives´ members and unpaid family workers. Most of them work in unregistered activities. The incidence of informality in this group of workers was always very important (more than 50%). For this reason, in 1998, as part of the Tax Reform, the "Simplified Regime for Small Taxpayers" was created, known as "Single Tax Regime". This regime seeks mainly to formalize the activities of independent workers engaged in low productivity activities (e.g. temporary workers, domestic workers, peddlers, rural labourers). In order to increase their formalization and to guarantee their access to the social security system, a single unified tax called monotributo was established. And, for the first time, the self-employed workers´ security system includes health insurance in their benefits. The aim of this paper is to analyse the changes of the "Single Tax Regime" and its consequences after 15 years of application. We note two main consequences: the formalisation without access of social protections and a particular use of this status to enhance labour flexibility. In the years following the implementation of this regime, many informal independent workers registered their activities but not all of them had access to the social security system because of the lack of social security contributions. This means that the formalization of their labour status did not reduce their vulnerability against some social risks. Also, the application of this regime has a completely unexpected consequence. This legal status was used as a tool to increase labour flexibility, even in highly regulated labour markets such as public employment. In this paper, using statistics provided by the national agencies as INDEC (Instituto Nacional de Estadísticas y Censos) and ONEP (Ofina Nacional del Empleo Público), I will particularly focus on this case in order to analyse the impact of the formalization of low-income independent workers.