Textile industry reportedly extends wage-relief deal to contain layoffs

Argentina’s textile industry, the government and labor unions have reportedly extended an agreement that reduces companies’ labor costs for another three months, as the sector confronts what industry representatives describe as an extreme crisis.

The arrangement would apply to wages for August, September and October, paid in September, October and November. It keeps the same terms as the previous period, under which 70% of a worker’s salary is treated as non-remunerative. That lowers the base used to calculate employer contributions and other social-security payments.

The mechanism does not reduce workers’ take-home pay. The remunerative portion of the salary cannot fall below Argentina’s statutory minimum wage. In return for the relief, about 70 companies that joined the agreement committed not to carry out dismissals without justified cause or impose suspensions for economic or force majeure reasons while the deal remains in effect.

“

Extreme gravity.

The government still needs to formally approve the extension. Industry sources told La Nación they expect that step to proceed, subject to administrative timing. The arrangement was first introduced for February, March and April by the Labor Secretariat under Julio Cordero, together with industry chambers and the UCI, Setia and Soiva unions. It was then renewed for May, June and July.

The benefit gives companies temporary relief but also reduces state revenue during its application. The Argentine Industrial Chamber of Apparel hopes it will continue through the end of the year, citing the “extreme gravity” of the situation. “The government does not understand what is happening in the real economy,” the chamber told La Nación, arguing that the main problem is not only imports but also the collapse in consumers’ purchasing power. FITA says the sector is operating at its lowest levels in three years.

“

The government does not understand what is happening in the real economy.