As a result of these agreements, from the Analytica consultancy they pointed out in a report that, if other weighty unions “reach agreements within those percentages, real wages in the formal sector would grow during the second half of the year”. In any case, the firm clarified: “This good news for the workers of these activities may be clouded, in any case, by the inflationary dynamics. An analysis of a long series (1946-2021) of the relationship between the nominal wage, the real wage and inflation, allows us to observe that the current nominal wage increase percentages are followed by inflationary jumps that do not allow real wages to improve in the long run”.
“It also emerges from the analysis that these measures are effective in the short term: real wages recover without major effects on inflation. This validates our optimistic view for the coming months in relation to their effects on average growth for the year.. But in the absence of a stabilization plan, the very uncertainty in relation to the real possibilities of reducing inflation conspires against a permanent result of improvement in real wages”, added the study.
wages vs. Inflation: who will win the race
In any case, in this context and considering joint agreements around 60%, it is estimated that the wages they won’t win price race this year. Analysts also stress that the loss of purchasing power in the informal sector will be much greater.
“Wages are running down behind the inflation, which is accelerating a lot and is probably closer to 6% than 5% in April. We, and most economists, have an inflation outlook of at least 65% this year. So, although some parity of 60% approach to the rise in prices, they are not enough. And the worst thing is that this is only for the formal private sector, or those who have strong unions. The informal sector is more complicated. So, in theory, this year wages would lose against inflation, ”he pointed out to Ambit Equilibra economist Lorenzo Sigaut Gravina.
“I think that, if the paritarias close around 60%, without a doubt they will fall short. I think the estimates show that there is going to be an inflation of 65% this year. And it seems to me that next year, it will be even higher. With which, there is no way that wages will beat inflation this year”, said Aldo Abram, director of the Fundación Libertad y Progreso, who remarked: “And, in fact, there are no ways, no matter how much the parity is reopened. Above all, if you look at all wages: because it is true that by forcing parities, the wages of employees formal go up a little more; but who are in the sector informal and even in the public sector, surely most of them do not have those capacities to beat inflation. But, in any case, I don’t think the formal sector will win either.”
In this regard, according to a report prepared by Fundación Capital, it is estimated that “in the accumulated of the year, the real salary of the registered private sector would present a decrease of 0.8%”. “For its part, we foresee a loss of close to 1.8% in the purchasing power of the public sector, in the framework of a challenging fiscal goal agreed with the IMF. Likewise, we project that the real salary of informal workers will continue to decline (5.6%). In this way, salaries would culminate in 2022 with a fall in real terms of 2.4%”, highlighted the study.
Source: Ambito
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