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How much did they lose salaries in the Milei era?


In December the wage index marked 8.9%, below the 25.5% inflation rate. In the interannual variation, inflation was 211.4% while salaries were lower: 152.7%.

For registered salaries, the monthly drop was 11.5%, and year-on-year, 14.8%. The public sector showed a drop in real terms of 15.9% in December and 20.2% year-on-year. But the income of the unregistered sector presented a monthly variation of 7.6% and an interannual variation of 115.3%. In real terms, the purchasing power of this sector suffered a drop of 30.9% throughout 2023.

The last update of the Minimum, Vital and Mobile Wage was made on December 1, establishing it at $156,000. However, this amount was significantly outdated compared to the 25.5% monthly inflation in December and 20.6% in January.

The relationship between the unions and the Government has been tense since the announcement of the national strike on January 24, 2024, and so far no rapprochement is perceived between both parties.

Inflation

Inflation moderated in January but in 12 months the price increase exceeds 250%, one of the highest rates in the world.

According to official figures, inflation in January reached 20.6%, below the 25.5% in December, but with an interannual rate of 254.2%.

“If you take the number alone, isolated, it is horrifying. And indeed it is, but you have to look at where we were and what the trend was,” said president Javier Milei.

The items with the greatest increases in January were goods and services, with 44.4%%, transportation (26.3%), communication (25.1%) and food and non-alcoholic beverages (20.4%), according to the institute Indec statistics officer.

“If it gave 30% it was a huge data, and it ended up giving 25%, (inflation) began to slow down. It fell 5% compared to the previous month and the drag was 6%. In other words, today inflation went from traveling 50% 15% and continues to decline,” Milei insisted.

After the 50% devaluation of the peso in December, the liberalization of almost all prices in the economy and the first adjustments in transportation and public services rates, monthly inflation remains close to the historical record of February 1991 (27%) .

“There is little to celebrate with inflation at these levels, especially because in December salaries moved below 9% and in January closer to 15%, but also below inflation,” economist Hernán Letcher summarized to the AFP.

The government had begun its administration with an inflation of 25.5% in December, which brought that of all of last year to 211.4%.

Regarding the recessionary effects of his draconian policy of cutting the fiscal deficit, Milei stated that “economic activity would have fallen much more and with a scenario of 90% poor” if he had not undertaken it.

Poverty in Argentina exceeds 45%, according to the latest official indices. “We are focusing on taking care of the most vulnerable class,” said Milei, detailing increases in social allowances.

According to Indec, a kilo of bread cost 1,214 pesos in the country (1.3 dollars at the official exchange rate), a liter of milk 842 pesos (0.95), a kilo of sugar 1,180 pesos (1.47), sunflower oil 2,630 pesos (2.98) and ground meat 3,469 pesos (3.93 dollars).

“Some things I ate before I don’t eat now, like cheese and meat,” Elsa González, a 74-year-old retiree, told AFP.

On average, the health sector registered a monthly increase of 20.55%.

“With daily medications, now I have to take half the pill or less than what I took before because of the price,” said Ramón Zamudio, 70, a person in charge of cleaning and taking care of a building in the center of Buenos Aires.

The Minister of Economy, Luis Caputo, predicted that inflation will be lower in February and March. “It’s already going down,” he said.

In its two months in office, the government launched an ambitious deregulation of the economy, seeking to reduce the role of the State to a minimum, lower inflation and achieve stability.

To this end, Milei issued a mega decree with modifications to norms and laws, including a labor chapter whose application temporarily left justice ineffective.

In parallel, he sent an omnibus law of more than 600 articles that, after arduous debates with allies and opponents, ended up shipwrecking in Congress.

Caputo assured that he will adopt other executive measures to achieve this year the goal of “zero deficit” committed to the International Monetary Fund (IMF) by reviving a credit program for 44 billion dollars.

The CGT, the country’s main union center, organized a 12-hour general strike in January and announced that it will ask for an 85% increase in the minimum wage, currently 158,000 pesos ($179.5).

This Wednesday, Indec set the basic food basket at 285,561 pesos (324.5 dollars) and the total basic basket at 596,823 pesos (674.7 dollars).





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