Claudia Di Fonzo says the $5 a day she earns in her temporary job as a cashier in a Buenos Aires supermarket is exploitation but she has no other choice.

The 26-year-old high school graduate takes solace in the fact at least she is able to feed herself and pay her bills.

Like many in Argentina, Di Fonzo is neither fully employed nor totally jobless. She gets by on odd jobs and temporary work, hoping to make it through the worst crisis that has ever hit South America's second-largest economy. "I'm fighting to survive," she says.

While it may be cold comfort, Di Fonzo is hardly alone. The crisis has pushed 17,500 of her compatriots below the poverty line each day for the past six months, according to a recent study, making them struggle to meet basic needs.

About half the nation's 36 million people are caught in such circumstances, victims of a four-year recession that has crushed demand and sent the formal economy's once-dominant services sector into a tailspin.

The situation became acute with January's devaluation, which sent the peso currency tumbling more than 70 per cent against the dollar after a decade of being pegged at one-to-one with the greenback.

This forced the economy into a traumatic transformation. As people were left with little money to spend, service industries such as banks and restaurants shrank while industries such as meat packers found new export opportunities as the peso has weakened.

The shift has forced Argentina's relatively well-educated workers to acquire new skills even as they struggle to put food on the table.

"I want to learn English and computer skills but the hours I work and time I spend looking for work don't allow me to study," said Di Fonzo, a single woman who was laid off from a staff job at another supermarket in October after months of pay cuts.

Experts reckon that 20 per cent of Argentina's 14 million-strong work force is "underemployed." Another 24 per cent are completely out of work.

Part of the problem is that the underground economy, the "unemployment shock absorber," as one expert described it, has virtually dried up along with the official economy.

A six-month freeze on cash withdrawals, imposed in December to stop a run on banks that threatened to collapse the financial system, has made it difficult to pay cash wages.

"I'm not entitled to an unemployment subsidy and I don't know if my last employer will give me any severance," said Luis Lamas, who worked off the books at a warehouse up to March and now gets by with help from his family. "I can't find work anywhere."

"We have had a lot more people applying for placements," said Paula Hollmann of temporary job agency Complementos Empresarios SA.

"But fewer of these employers are coming to us since the crisis began," she said in an office cramped by a file cabinet bulging with service and administrative job requests.

Argentines are applying for jobs they once disdained, including serving in a military discredited by human rights abuses in the 1976-1983 dictatorship. It now sounds attractive, offering room, board and health care, plus 350 pesos ($97) pay a month and professional training.

Eight times as many people applied this year than last. "The most surprising trend is that about six in 10 of the applicants had completed high school. That is a much higher level of education than usual," one army officer said.

Alternatives for the unemployed are few. Some apply for a government handout of 150 pesos ($41) a month. Others line up for days for a work visa issued by one of the embassies of the ancestral homelands of this nation of European immigrants.

In a sign of the times for those who stay, the official statistics agency now counts as partially employed the up to five million people bartering goods and services in an estimated 4,500 "trueque" or barter markets.

The peso's plunge this year has made imports prohibitively expensive while labour costs, in dollar terms, to manufacture goods locally are much lower.

Renewed market access for South America's No. 2 beef exporter to the European Union, approved earlier this year after foot-and-mouth disease was brought under control, is behind a recovery in the local meat packing industry.

Cabinet Chief Alfredo Atanasof said Argentina was negotiating to add another 10,000 tonnes to its EU beef export quota.

"Once this deal is done the meat packing industry will reach a historic level of employment," he told reporters.

But aid workers and experts agree the recession has not yet hit bottom.

"We are feeding 400,000 people a day at soup kitchens around the country and I expect most companies to keep laying off," said Jorge Berthet, an agricultural engineer who sits on the national committee of Catholic church aid group Caritas.

Sociologist and poverty expert Artemio Lopez said he expects Argentina's unemployment rate to rise to 30 per cent by the end of this year and under-employment to reach 25 per cent, levels, which are likely to remain high for a long time.

The transformation of the near-bankrupt financial services sector will cut employment there by half while most industries will at best remain the same in size, with only marginal job gains in the export and import substitution sectors, he said.

"The auto sector produces in one day what it sells in a month. And how can you manufacture substitutes for sophisticated imports like pharmaceuticals?" Lopez said.

An estimated 70 per cent of Argentina's 36 million people do not have the disposable income to buy anything more than their basic essentials in an economy where domestic consumption until last year accounted for 80 percent of output, he said.

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