Contributed by Bianca Fernet, an American economist in Buenos Aires, Argentina. Her blog Not Paris dives into financial and economic topics in Argentina.
Today, Friday August 10, marks day seven of the longest subway strike in Argentina’s history. The complete shutdown of the Subte, Buenos Aires’s underground transit system, began Friday night and as I write, the end is still not in sight.
A seven day subways strike in Buenos Aires is paralyzing.
Buenos Aires Metropolitan Area is home to well over 12 million people, and an average 1.123 million trips are taken on the Subte every day. Meaning that every day this week, over a million people crammed themselves onto the already crowded streets of the city into busses, taxis, and on foot. Transportation has ground to a crawl, as the bus system is unprepared to handle such a sizeable influx, and traffic chokes the streets.
The Subte workers union AGTSyP called the strike to demand a 28 percent wage increase. The complication exists when asking who is responsible to meet or negotiate these demands with the union.
Metrovias is the privately owned company that manages the Subte; however, the system is highly subsidized. In 2010, Argentina’s planning minister estimated these subsidies to be equal to 706 million pesos. Although I constantly poke fun at the fact that the peso is bleeding value at a rapid rate, that’s quite a cost. So substantial in fact that in November, the national government announced plans to hand the administration of the Subte system to the city government of Mauricio Macri.
Now I could wax poetic on this topic, but for the purposes of this post it serves to understand that President Cristina Kirchner and Mayor Mauricio Macri do NOT get along. At all. As in, seat them on different sides of the room and write about their run-ins in the tabloids.
While Kirchner and the National Government insist that the city must be responsible for the Subte, which exists within the city, Macri has responded that his administration will not take control until significant necessary investment is made. He has asked that the national authorities allow him to seek international financing, and quipped that in order to finance the project, he would have to close kindergartens.
The labor union blames first Metrovias for not using subsidy money appropriately, then the City, and finally the national government. The result of this circle of blame is millions of people a day spending an extra 2+ hours getting to and from work, which I will tell you firsthand is a truly ugly picture.
A “counterstrike” has been organized via Twitter and Facebook by the users of the Subte, who claim they are the only ones paying for the power dispute between city and national government. The community is calling for people to jump the turnstiles and take back their lost week from Monday to Friday.
But while the Subway cost and the wage increases are indeed a steep bill, who is really paying the bill?
Buenos Aires has a labor force of 4,656,000 – the majority of whom are affected by effective shutdown of transportation in the city. If we take 3.5 million to be conservative and account for people in the provinces who do not commute into the city, it’s still a substantial number. As a rough estimate, if the closed Subte and gridlocked streets add an average of two hours to each daily commute, this strike has cost the City of Buenos Aires 35 million hours in lost productivity just from Monday to Friday.
It doesn’t take a labor economist to tell you that 35 million lost hours is not good for the productivity of any city. And you only have to have spent a few hours of your life stuck in traffic to understand how universally pissed off it can make people.
At this point, the strike has gone on for seven days – and everyone involved is losing. The question remains how much longer will this go, and how big of losers will we be? Cross posted from NotParis.