The discussion about employment is closely related to productivity. Formal employment generation is essential, but it will have no real impact if it is not accompanied by a greater ability to produce more and of better quality. Labor productivity supports long-term economic growth and enhances workers’ purchasing power.
When an economy produces more value with the same or fewer resources, a surplus is created that can be converted into better wages, business profits, and investment in innovation. A virtuous circle thus forms: investment in machinery, technology or training increases efficiency; This increase enhances profitability and opens the way for rebuilding income and enhancing consumption.
However, this connection is not automatic. Often, the gap between productivity growth and wage increases shows distributional tensions, differences in bargaining power or business policies that prioritize the accumulation of profitability and ignore improvements in workers’ incomes.
Investment in machinery, technology or training increases efficiency; This increase enhances profitability and opens the way for rebuilding income and enhancing consumption
And last year, Labor productivity An increase of 5.1% per position and 5% per hour worked, along with a 6.3% growth in Gross value added (GVA). However, this average improvement hides divergent realities: some sectors have achieved important gains in efficiency thanks to investment and modernization, while others remain laggards due to a lack of scale or productive capital.
Among those that increased productivity the most were financial intermediation (25.6% per job), mining and quarrying (12.1%), manufacturing (8.8%), and trade (7.7%). This progress has been explained by increased investment in equipment, digitalization and reorganization of processes. In the construction sector, it grew by 7.2% and was linked to the intensive use of technology and reduced construction deadlines.
On the other hand, sectors such as fishing (-47.9%), electricity, gas and water (-8.1%) and domestic work (-0.1%) suffered significant declines. These are activities that have low investment, are highly informal, or have difficulties integrating technology. In these areas, productivity depends more on human effort than on progress in physical or organizational capital, which limits the generation of added value and the possibility of increasing salaries.
The sectoral gap reveals an economy moving at two speeds: one part is modern with export potential, and the other is trapped in structural bottlenecks. Reducing this gap is necessary to achieve more balanced growth, where the benefits of productivity are distributed more fairly.
Period 2017-2025 It showed that economic growth did not translate proportionately into salaries. Although labor productivity has risen, salaries represent a smaller proportion of total value added, remaining less than 50 percent.
The sectoral gap reveals an economy moving at two speeds: one part is modern with export potential, and another is stuck in structural bottlenecks.
In the second quarter of 2025, salaries accounted for 46% of the total, leaving 54% for business profits, rents, mixed income and taxes. This means, Less than half of what is produced reaches the workers. Since 2018, earnings have grown faster than wages, causing a more regressive income distribution during years of recession and inflation.
Since 2023, there has been a slight improvement, but the wage share is still far from the 50% recorded in 2017. The sectoral analysis shows notable differences. Labor-intensive or public sector activities, such as teaching, health, transportation, and construction, allocate between 50% and 100% of their value to generating salaries.
On the other hand, the most capital-intensive sectors – agriculture, mining, electricity and gas, and real estate – focus income on profits and capital income. In agriculture, profits are three times the gross wage.
the The gap between capital and labor Last year it decreased from 1.37 to 1.19, although it is still higher than the 2017 level (1.04). The manufacturing industry achieved a more balanced distribution, with the gap narrowing to 1.45, as a result of the recovery in production and higher employment rates recorded.
Restoring the share of wages in national income constitutes a requirement for equality and a condition for growth. The greater weight of salaries drives consumption, which is the main driver of aggregate demand. When productivity gains are shared more equitably, growth becomes sustainable and inclusive.
When productivity gains are shared more equitably, growth becomes sustainable and inclusive
Improving productivity should not depend on job insecurity or cost cutting. Countries that combine growth and prosperity achieve this by increasing investment, innovation, and training of their workforce. In Argentina, this challenge requires modernizing business rules to encourage formalization and competitiveness, without compromising rights.
Effective, practical reform must be the solution The bridge between productivity and salary: Reducing incentives for informal work and litigation that slow employment, and encouraging investment in technology, infrastructure and human capital. Thus, advances in efficiency lead to improved income for workers and increased profit margins for companies.
The real dilemma is not between flexibility and rights, but rather between stagnation or growth with inclusion. If the country can ensure better distribution of productivity and increased wage participation, formal employment and consumption will be able to support the virtuous circle of development. Productivity is A meeting point between capital and labor: Both must be strengthened to build a more equitable and resilient economy.
With the restoration of investment dynamism, Transforming efficiency into luxury It requires an action and production framework that translates recovery into real social progress, capable of benefiting the entire society.
The author is an economic analyst and director of Focus Market