With downward inflation, prices in Argentina are high measured in dollars. This led to a paradox. On the one hand, people complain that Salaries are low and that are not enough to reach the end of the month. On the other hand, Production sectors complain that wages are high in dollars Putting exporters already the industries that compete with imports, according to a report released this Sunday by the Institute for Argentine Social Development (IDESA). The response is found in productivity decline: it fell 22% in the last eight years along with the dollar salary that decreased 29%.
The work of this study center analyzes the problem. Consider that inducing a devaluation of weight could lower salaries in dollars, giving competitiveness to exports and industries that compete with imports. But he warns that the situation of the people will worsen for salary liquefaction.
On the contrary, Idesa points out that giving in to union pressures allowing salaries to increase could improve the purchasing capacity of remuneration, but at the expense of aggravating competitiveness problems.
Faced with this crossroads, he considers it useful to compare the current situation with some moment of the past. In this regard, according to data from the Ministry of Economy, it is observed that:
- In it 2017 The registered private salary was 500 dollars monthly and GDP by private wage earned was $ 124,000 per year.
- In it 2025 The registered private salary is 060 dollars and the GDP by private wage earner is $ 97,000.
- This implies that The salary in dollars fell by 29%, while productivity – that is the gross internal product per private employee – was reduced by 22% compared to 2017.
Thus, the data show that with respect to 2017, both salaries and productivity were significantly reduced. Consequently, “The paradox of a low salary for people, but high for producers, is explained because each employee produces less ”.
Based on what is indicated, Idesa concludes that “The main challenge of Argentina today is to improve economic efficiency so that the added value generated by each worker increases”.
Suggestive
Another “very suggestive” reference is, according to the report, that in the mid -90s the salary measured in dollars was also at around $ 1,000 at current prices. That is, level similar to the current one. But Productivity (GDP per private employee) was 60% higher.
For this reason it is warned that, beyond the legitimacy of claims to improve remuneration, in the current conditions “the Government should continue to be extremely conservative in validating increases in salaries that are decided in parity at the centralized level between the sector union and business associations. It is highly recommended that the update of salaries be defined at the level of each company in order to be consistent with their productivity not to force jobs.
It considers that to improve wages and competitiveness it is simultaneously essential to generate a more favorable environment to production. And while IDESA understands that the agenda is very wide, considers that three elements are essential and urgent:
* Improve productive infrastructure in the three levels of government;
* Improve taxesestablishing that the super VAT absorbs provincial gross income and fees to municipal sales; and
* Improve labor regulations allowing the disappointment of the SMEs of the old collective agreements signed centrally by the sectoral unions and associations of dubious representative employers.
Recovery
The registered private sector salary carried the last official data available (INDEC), three consecutive months below inflation. Different factors played in this regard, including the March inflationary rebound – the consumer price index hit 3.7% – and the official reluctance to homologate joint agreements with adjustments greater than 1% monthly.
But the situation It was reversed in May when the average of the agreements of the main peers were 2.4%almost a point above 1.5% recorded by the CPI, according to Synopsis data.
This consultant estimates that, for the current month, the increases would be 2.3%, an increase that would exceed inflation projected by private consultants for June that is around 2%.
Source: Ambito
