Milei Is Defying Argentina's Powerful Labor Unions

After enacting sweeping reforms in Argentina, President Javier Milei faced a major protest. Tens of thousands of people marched through the streets, hundreds of flights were grounded, and schools and businesses closed in protest of Milei's radical attempt to fix the troubled South American country.

Milei is a rarity; there aren't many self-described libertarian heads of state in history. To avert economic disaster in a country facing huge deficits and a 160 percent inflation rate (that has since spiked to over 211 percent), he told the country things would likely get worse before they could get better.

In his inaugural address on December 10, Milei acknowledged the daunting challenges ahead: "No government has received a worse inheritance than the one we are receiving….We neither seek nor desire the difficult decisions that must be made in the coming weeks. But unfortunately, we have no choice."

Ten days into his term, Milei issued a "mega-decree" of more than 300 executive measures. He abolished national rent control, which had caused a 75 percent drop in available apartments in Buenos Aires in 2022 and 2023. He repealed price controls, slashed subsidies, and fired more than 5,000 government employees. He allowed direct competition with Argentina's government-owned airline, which he plans to privatize. And he defied the country's powerful labor unions.

Milei's transformative agenda has encountered resistance, notably from Argentina's largest labor union, the General Confederation of Labor, which represents about one out of every five Argentine workers. The union called for a nationwide strike on January 24, bringing portions of Buenos Aires to a standstill.

Their main reason for protesting? Milei had issued an order ending the automatic withholding of union dues, leaving workers free to opt out of union membership. He also banned government workers in sectors such as health care and education from striking. While his measures were temporarily suspended by a court ruling, unions are making a show of force so that Milei's agenda doesn't make it through the National Congress.

Despite the economic challenges and opposition, Milei remains resolute in his pursuit of a freer, less regulated, and less debt-ridden Argentina. Addressing world leaders in Davos, Switzerland, at the World Economic Forum in January, he said the Argentina of the future will be based on libertarian principles.

"If measures are adopted that hinder the free functioning of markets, free competition, free price systems, if you hinder trade, if you attack private property, the only possible fate is poverty," Milei said.

Despite the union's opposition, Milei's main political adversaries aren't Argentina's workers. In fact, Milei is calling for increased welfare in the short term to ease the pain for the working class during this transition to a new economic model. As Argentine political economist Marcos Falcone tells Reason, Milei's actual adversaries are wealthy Argentines who have benefited from government largesse.

"Milei is going against crony capitalism, because he is basically trying to kill the businessmen that have lived off of government support," Falcone says. "We need to move forward. And the people need to be able to profit—not just companies because of regulations and privileges."

In his speech at the Davos conference, Milei encouraged business owners not to be intimidated "by the political class or by the parasites who live off the state."

"You are heroes. You are the creators of the most extraordinary period of prosperity we've ever seen," Milei continued. "Do not surrender to the advance of the state. The state is not the solution. The state is the problem itself."

Milei faces a thicket of regulations to cut and massive political resistance in Argentina. It won't be easy to carry out his nation's direly needed economic transformation. We'll have to wait and see if he picked the right chainsaw to cut through the challenges ahead.