Introduction to Javier Milei and His Relevance
Javier Milei, an Argentine economist and politician, assumed the presidency in 2024. Known for his libertarian views and advocacy for free-market policies, Milei’s administration has been closely watched by both supporters and critics. Recently, Argentina’s unemployment rate has risen for the first time since his presidency, reaching 7.9% in the first quarter of 2025, according to data released by the National Institute of Statistics and Census (INDEC).
Key Factors Behind the Rise in Unemployment
1. Growth in the Economically Active Population (PEA)
The economically active population increased by 192,000 individuals in the first quarter of 2025 compared to the same period in 2024. However, job creation did not keep pace with this growth; only 145,000 new jobs were created. This discrepancy resulted in an additional 47,000 unemployed individuals compared to the previous year.
2. Decline in Formal Employment
The proportion of people with retirement deductions (an indicator of formal employment) among the total population decreased from 21.3% to 20.6%. This interannual reduction of 2.5% is the primary cause of the employment decline, according to a report by the Center for Political Economy of Argentina (CEPA), a think tank associated with the kirchnerist opposition.
In contrast, informal employment remained stable, accounting for 11.7% of the population.
3. Increased Pressure on the Labor Market
The labor market pressure rose by one percentage point in the first quarter of 2025 compared to the same period in 2024, reaching 29.9% of the sample. This heightened pressure contributed to the rising unemployment rate.
4. Modest Employment Growth Fails to Offset PEA Increase
Although the employment rate increased slightly from 44.3% to 44.4%, and the activity rate rose from 48% to 48.2%, these improvements did not prevent the unemployment rate from increasing.
Key Questions and Answers
- What is the current unemployment rate in Argentina? The unemployment rate has risen to 7.9% in the first quarter of 2025.
- What factors contributed to the rise in unemployment? The growth in the economically active population, decline in formal employment, increased labor market pressure, and modest employment growth are the key factors.
- Who is Javier Milei and why is his administration relevant? Javier Milei is an Argentine economist and politician who assumed the presidency in 2024. His libertarian views and free-market policies have made his administration a subject of interest for both supporters and critics.
