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>> Marco Meloni owns this textile factory in Argentina, employing 105 people. Meloni's business like many others in Argentina has been hard hit by a recession.>> What we also did was reduce work hours in this plant in particular.>> Meloni is cutting shifts, but he's doing everything he can to avoid laying off workers.
The reason, he can't afford it. Reuters correspondent Ross Colvin is in the capital Buenos Aires.>> The cost of laying off workers in Argentina are among the most expensive In the world. Argentina pays workers one month of salary for every year of service plus one month for simply telling them that they're going to lay them off.
Significantly, there's no cap on the severance pay which is different from the case in many other countries.>> Reuters interviewed several business owners in textile, plastic, clothing, and paint industries. They say they're reducing hours, stopping production on some days, even asking workers to take their vacations earlier than usual, anything to avoid outright layoffs.
And that's why during this recession, while the inflation rate has soared 48% and the peso has tumbled, Argentina's unemployment rate has barely budged from 9%.>> Over the last year, only about 100,000 people have lost their jobs. Now we compare that to what happened in the great recession in the United States in 2007, 2008, when 8.7 million people lost their jobs.
That was about 6% of the US workforce. The 100,000 jobs here represents about 1% of the workforce. So you can see that that is one of the unusual features of the recession, because you would expect businesses to be shedding jobs to try and stay afloat.>> President Mauricio Macri's government is also trying additional measures to help contain job losses.
Macri announced in November that companies must give ten days notice of any plans to lay off workers, so that the government can help find ways to keep them employed.