They warn that wages (with exceptions) will lose race against inflation

Facing what may happen in the second half of the year with this indicator, from the firm they remarked that “due to the marked acceleration in the general level of prices observed from July, the adjustments derived from the parity agreements signed to date will hardly be able to compensate for the loss of purchasing power”.

“With a projected inflation floor of 100% per year as of December, it is difficult to propose a scenario where wages win the race against prices (Until now, most of the paritarias set an average increase of 72% per year). In this sense, we expect that in the annual average, wages in the formal sector will fall around 1% in real terms, consistent with a greater deterioration towards the end of the year, orbiting values ​​of -8% in real terms measured in December against December”, they added.

The “race” of the paritarias

To mitigate the impact of the acceleration of inflation on purchasing power, the unions seek, with joint reopenings or through trigger clauses, improve previous agreements.

“On the parity issue, it is clear that in recent years the workers, and also part of the businessmen and the private chambers that negotiate with the workers, have had a kind of ‘gymnastics’ that they have worked hard on. This whole scheme of reopenings, trigger clauses, non-remunerated sums, is very well oiled”, he pointed out to Ámbito Sergio Chouzadirector of the Sarandí consultancy.

However, he clarified: “But, in a context of inflationary acceleration, until this acceleration is stopped, and then gradually reversed, an improvement in purchasing power is not going to be achieved. In the best of cases, for the guilds that are more indexed, it will be a tie. Later, beyond the statistical question, in which depending on what point the comparison is made, if the chronological year or parity year is measured, in the long process of time it is not going to be able to beat inflation when there is a context such marked and sustained acceleration”.

“In the best of cases, some unions that have more strength when it comes to imposing their demands, will tie or go relatively even. And, in other cases, they will be below”, added Chouza, who underlined: “With which, in each diagnosis we make, we say that today the best income policy that the Government can make is to focus all its efforts on lowering inflation. Because now inflation is in the 7% zone. Everything else that is sought so that the joint parties try to get closer, is going to be a correction that in the best of cases compensates. But you are not going to get an improvement in purchasing power. And the numbers so far this year in terms of income show that”.

Impact on purchasing power

For his part, as pointed out by the director of the Fundación Libertad y Progreso Aldo Abram, “Unfortunately, when inflation accelerates, everyone’s income falls”. “It has an impact in terms of impoverishment in the general society. And of course real income will fall. It is possible that some unions manage to sustain the increase in salaries so as not to lose purchasing power, but in general, unfortunately, this usually generates less employment. and that more people remain unemployed or in informality”, he explained.

“And the informal sectors, or the monotributistas, are the ones that end up in the long run compensating what the strongest unions achieved for those who are lucky enough to have a job in a dependency relationship. For this reason, sometimes one should be a little more cautious in union negotiations, because in a society that is impoverished, if someone manages to get away, because they have a union that manages to impose conditions that are not applicable to the general of the country, that somehow fits. And it adjusts for those who have informal or independent jobs,” Abram concluded.