The likely approval of Argentina's labor reform will improve hiring incentives over time and strengthen the government's broader market-oriented agenda, though the short-term economic impact will be limited by high labor costs and weak domestic demand. On Feb. 12, the Argentine Senate voted 42 to 30 with no abstentions to approve a landmark labor reform bill put forward by President Javier Milei's administration. The reform seeks to overhaul Argentina's labor law regime, much of which dates to the 1970s and has been characterized by rigid protections for workers and subject to heavy litigation. Key elements in the Senate text include reductions in severance obligations and a restructured approach to termination liabilities, more flexible working hours (which in some cases may allow workers to work for up to 12 hours), the extension of the probationary period for new workers from three to six months and an expansion of the list of...
