In June, Argentina's government published "Decree 407" (Decreto 407/2026) in the official gazette. Under it, the Labor Ministry will convene employers' associations and unions to renegotiate roughly 150 industry-wide collective agreements that had been left in a lapsed state. Coming after the labor reform law that cleared the Senate at the end of February, it is the second major redesign of how work is organized in less than a year.
What happened — February's law and June's decree
The labor reform law passed on February 28 was a sweeping package: looser dismissal rules, an extension of the maximum working day to 12 hours, reduced overtime pay, restrictions on the right to strike, and cuts to sick-leave benefits. On February 19, a nationwide strike called by the CGT (Argentina's General Confederation of Labor) brought Buenos Aires to a virtual standstill — but the bill passed.
June's Decreto 407/2026 goes a step further. The government's explanation: a cleanup of outdated agreements that have drifted away from market realities. The unions' reading: top-down state interference in labor-management autonomy. If industry-wide agreements lose their force, bargaining fragments to the company level — and workers at small and mid-sized workplaces with low union density risk being pushed into accepting worse individual terms.
Context: in the shadow of disinflation
In 2024, before the Milei administration took office, monthly inflation had reached double digits. By the end of 2025 it had fallen to the 2% range, widely reported as a "payoff" of austerity (we covered the latest price trends in an earlier report). Over the same period, however, informal employment expanded and real purchasing power was squeezed.
The IMF, in the context of its Extended Fund Facility (EFF) program, supports labor-market flexibilization. The ILO, meanwhile, has voiced concern that the reform law's restrictions on the right to strike may conflict with international standards. Even among international organizations, the verdict on this reform is split.
The question: when the wage floor gives way
Collective bargaining in Argentina has historically had a "vertical" structure, with agreements covering entire industries acting as a floor under wages. If that structure hollows out, the wage levels that have sustained the middle class could slide — the scenario labor researchers fear most. This year's May Day protests reportedly drew not only formal union members but also informal and freelance workers and young people in large numbers, a sign of how widely the effects are expected to spread.
My perspective
How you judge this reform depends on the time horizon you use. In the short run, disinflation and more flexible hiring could attract investment; in the long run, losing the wage floor could erode domestic demand and the base of the social security system. Both are plausible — which is exactly why observers need to keep both sets of indicators side by side. The Milei administration has also floated a plan to "shut down ministries that run out of budget" in the same period (earlier report); this decree sits within the same consistent design philosophy of shrinking the role of the state.
What to watch: which industry the first round of renegotiations under Decreto 407/2026 starts with, and the monthly trajectories of the real wage index and registered employment. Will the "modernization of agreements" prove compatible with lifting wages, or will the floor give way? The answer will show up in the statistics.
Glossary
convenio colectivo = collective bargaining agreement. paro nacional = nationwide strike. CGT = Argentina's General Confederation of Labor, the country's largest trade union federation.
Nothing guarantees that stopping inflation and protecting workers' livelihoods are two sides of the same policy.
References
- Argentina Senate approves contentious Milei-backed labour reforms | Al Jazeera (2026-02-28) — aljazeera.com
- Strike over labour reforms brings Argentina's capital to a near-standstill | Al Jazeera (2026-02-19) — aljazeera.com
- Milei intensifies his attacks on labour rights in Argentina | Progressive International (2026-06-20) — progressive.international
※ This article is the author’s commentary based on public information. Please confirm the latest figures, dates and procedures with governments and primary sources. Quotations are kept minimal and sources are cited.