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Thursday, January 1, 2015

Argentine Business

I obviously have no idea what's going on here, after all I've only been here a week, but I'm going to see if I can put two and two together. I may not get to 99, but let's see if I can get to 22.

Let's start with business. From a worker bee's perspective, the most important thing is wages. From the business owner's perspective wages paid to workers are likely to be his largest expense, but his primary concern is going to be continuation of the business, or failing that, recovery of as much capital as possible.

A good business will pay its workers at their agreed upon rate, will pay its suppliers in a timely fashion, deliver goods and / or services to their customers as promised. If it all works out, it may even return a profit to the owner.

The Argentine government seems to have a bit of a problem managing their money. There have been defaults, crises and unpleasantly high rates of inflation. These things do not make a stable platform for running a business.

One never knows how long a going business will be able to continue to operate. Your product or service may be supplanted by something new and improved, government regulations may force you to close, or your costs may increase to the point that people are no longer willing to pay you a price that will enable you to make a profit. And then there are wars and acts of God.

Starting most any kind of business requires a capital outlay (spending money). If your business fails before you have recovered your investment, you will not be able to start another business, or at least not at the same scale as this one.

Now if the money being used to run your business is fairly stable, it is less of a concern, and you might be willing to bet on things that will take longer to pay off. On the other hand, it your country's money makes you nervous, you are going to be looking for short term returns. Long term gambles come with an increased risk of failure.

Here in Argentina the money is a little flakey, so anyone who is in business is going to be looking for good short term results, and since wages are often the biggest expense, those wages are going to be under the highest pressure, which translates into things like workers being paid $2 an hour.

The kids have been here for a combined total of ten years, and they repeatedly comment on the stupid things people do in their jobs, like the taxi driver entering our destination in his GPS four times and still not getting it right. Looking at the fancy apartment I am staying in, I notice some flaws that I normally wouldn't expect to see in a place like this, like gaps in the parquet flooring, the grout in the bathroom floor covering some of the tiles, and the sloppily patched cracks in the concrete wall (this is the top floor, so I am not too concerned over structural integrity).

I suspect the problem here stems not from stupidity, but from lack of attention to detail, and that can come from a couple of places. One is not enough sleep, which is a natural result of working two jobs because one job doesn't pay enough for you to pay your bills, or two, you just don't care because you aren't getting paid enough to care.

La Presidenta Kirchner got elected by the people, but I don't think her economic policies are helping them. But like I said, I've only been here a week. Maybe any job, even a $2 an hour job, is better than the way things were.

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