Argentina's Labor Reform: Senate Approval Looms as Union Confrontation Escalates

6 predicted events · 5 source articles analyzed · Model: claude-sonnet-4-5-20250929

# Argentina's Labor Reform: What Happens After the Lower House Victory

Current Situation

Argentina stands at a critical juncture as President Javier Milei's controversial labor reform bill advances through Congress despite massive popular resistance. After a marathon 12-hour session, the Chamber of Deputies narrowly approved the legislation 135-115 in the early hours of February 20, 2026, according to Article 1. This vote came immediately following Argentina's fourth general strike under Milei's presidency, which brought Buenos Aires to a near-standstill with widespread closures of businesses, schools, banks, and transportation systems. The reform package represents a fundamental restructuring of Argentina's labor framework, dismantling protections that have existed since the 1940s. Key provisions include extending workdays from 8 to 12 hours, reducing severance pay, limiting collective bargaining power, restricting the right to strike, and making it easier for companies to fire workers. As Article 3 notes, the bill will now return to the Senate for a final vote on the modifications made by the lower house before becoming law.

Key Trends and Signals

Several critical patterns emerge from the current crisis that will shape what happens next: **Narrow But Stable Support**: The 135-115 vote margin in the lower house, combined with the Senate's prior approval last week, indicates Milei has assembled a working coalition with center-right allies sufficient to pass his agenda despite lacking a majority on his own. **Escalating Labor Militancy**: The General Confederation of Labor (CGT), one of Argentina's largest unions, has demonstrated its capacity to paralyze major cities and inflict economic damage. Article 4 reports that the February 19 strike resulted in 255 cancelled flights and $300 million in losses for Aerolineas Argentinas alone. The unions' statement that "rights are not negotiable" signals no retreat from confrontation. **Limited Procedural Obstacles**: Since the Senate already passed an earlier version of the bill, the return for final approval of lower house modifications represents a formality rather than a substantial hurdle. Article 1 indicates the government expects the bill to become law "before the end of the month." **Economic Desperation**: The underlying context of nearly 40% informal employment (Article 3) and economic conditions forcing citizens to take loans for food (Article 1) creates pressure for dramatic policy action, even as it fuels popular discontent.

Predictions

### Senate Approval Within Days The Senate will almost certainly approve the modified labor reform bill within 7-10 days, likely before the end of February 2026. The procedural nature of this vote, combined with the Senate's previous approval and Milei's demonstrated coalition strength, makes this outcome highly probable. The government's confidence that the bill will become law "before the end of the month" reflects their vote count certainty. ### Immediate Union Response: Fifth General Strike Within two weeks of the bill becoming law, Argentina will experience its fifth general strike under Milei. The CGT's vow to fight "in the streets, in Congress, in the courts and in every workplace" (Article 5) indicates a multi-front strategy. Having already demonstrated the capacity to shut down major cities, unions will view a post-passage strike as essential to maintaining credibility with their base and attempting to force modifications through implementation pressure. ### Legal Challenges in Constitutional Courts The unions' explicit mention of fighting "in the courts" (Article 5) foreshadows immediate constitutional challenges within the first month after passage. Labor organizations will argue the reforms violate fundamental worker protections and international labor conventions to which Argentina is signatory. While unlikely to overturn the law entirely, litigation could delay implementation of specific provisions. ### Investor Response: Cautious Optimism Multinational corporations and international investors will respond positively within 1-3 months, announcing expansion plans and new investments in Argentina. The business community has long criticized Argentina's rigid labor laws as obstacles to investment. However, this optimism will be tempered by concerns about implementation amid labor unrest and political instability. ### Workplace-Level Resistance and Compliance Issues Even after legal passage, implementation will prove chaotic over the next 3-6 months. Expect widespread non-compliance in unionized sectors, workplace occupations, and targeted strikes at companies attempting to invoke new firing or workday extension provisions. The gap between law and practice will remain substantial in sectors with strong union presence. ### Electoral Consequences Begin Materializing Milei's approval ratings will face renewed pressure in the coming months, particularly if the reforms fail to quickly generate the promised formal employment growth while visible worker hardship increases. The narrow vote margin suggests political vulnerability that opposition parties will exploit in advance of future electoral contests.

The Path Forward

Argentina is entering a period of sustained labor conflict that will define Milei's presidency. While the libertarian president has secured a legislative victory that seemed impossible given Argentina's historically powerful unions, the real test lies in implementation. The coming months will reveal whether Milei's bet that economic modernization requires breaking union power will generate the investment and formal employment he promises, or whether resistance will render the reforms unworkable in practice. The international community, particularly the IMF and foreign investors, will watch closely to see if Argentina can actually transform its labor market—a goal that has eluded previous reform efforts for decades.