The decrease in purchasing power as a result of inflation and lack of salary updates It strongly affects the sectors that have the least and, without a doubt, according to statistics, retirees are the most affected because their expenses increase month by month more than those of other citizens and the minimum income they receive is $206,000, including increase of 8.8% in June.
But the price increase continues its course, although it decelerates slowly, and according to calculations made by Ambit, the cost of a retiree’s basket will go from being worth $685,000 in March to more than $800,000 in May. This, taking into account that the inflation figure for April was 8.8% and the expected figure for the fifth month of the year is around 5%.
Retirees, a more vulnerable sector than others
It must even be taken into account that The usual monthly increase in the average expenditure of an older adult exceeds that of other age groups because it includes more inflationary and expensive elements such as medicines. Thus, it is likely that the May figure will be close to $900,000 or exceed it, but that will be seen with the official data on the table. What we are in a position to affirm with the preliminary figures is that, without a doubt, The current minimum retirement would be equivalent to at least a quarter of the expenditure of the basket of the elderly in May.
That is why Hernan Letchereconomist, comments Ambit that the largest increases occurred in medicines and service subsidies, especially impacting retirees and middle- and low-income sectors. While, the pension lawyer, Christian D’alessandroslips in dialogue with this medium that, the cost of the basic basket of retirees, according to the Ombudsman for the Elderly, is above $680,000. Something very different from what the INDEC estimates for the basic basket in general, which is about two hundred or so thousand pesos.
D’alessandro maintains that That $200,000 approximately exposes the difference that “there are no relative and well-measured studies regarding older adults or older people at the national level,” because what the Ombudsman’s Office for the Elderly does is a survey of large urban centers such as Buenos Aires, Gran Rosario and others, while the INDEC is at the national level, but it is not consistent with the reality of a retiree who today is going through difficult situations, for example, “not being able to buy medicines”.
The problem of medications for older adults
Likewise, the lawyer maintains that Retirees can no longer even access the discounted remedies that PAMI has. That makes the outlook more difficult. “The situation is extremely delicate,” he assures, and warns that “we are in a process that, if not corrected in the next month, will end in a catastrophic situation, where the retirees themselves will begin to exert force to end the situation and we are seeing it in the rallies that are being held, for example, yesterday in Congress.”
Although retirees are a part of the population, since, in total, there are in Argentina 20 million workers and 6 million retirees and pensioners, who have serious problems making ends meet. The deterioration of the pocketbook is reflected in the series of negative indicators of general consumption: the latest report on domestic consumption of goods and services showed a drop of 4.5% compared to the previous year. The reason is that The average nominal income of Argentine households fell by 18% in real terms until that date. To face this situation, 56% turned to their savings to cover current expenses and 39% increased their working hours to maintain last year’s income level.
A retirement adjustment is necessary
In this context, retirements are at very poor levels and there was a opposition bill that modifies the retirement mobility formula and that was approved in the Chamber of Deputies, although Javier Milei warned that he will veto if the Senate turns it into law. The formula of the new law, explains Letcher, prevents retirees from losing to inflation, “but it also does not allow them to win, freezing the current situation“.
For the director of the Center for Argentine Political Economy (CEPA), the formula, based on previous data, does not reflect the significant increase in inflation, resulting in a loss for retirees, whose recovery is limited by inflationary developments.
However, it should be noted that this initiative is substantially more beneficial and contemplative of the economic crisis than the one the Government uses and more equitable compared to the one it wants to impose and aims to create. a mobility formula that repairs the brutal adjustment of these months.
Among other points, this new formula states that the minimum asset should not be less than the value of a basic basket for the elderly, which is currently $285,000, according to INDEC. Behold a extra payment of 8% to reach 20.6% of January inflation. The government had only given 12.5 applying its retirement mobility index. And the evolution of retirements would be tied to the Consumer Price Index (CPI)which measures inflation, and average salaries in the Index of Average Taxable Remuneration of Stable Workers (RIPTE). The update will be applied semiannually and establishes an additional increase once a year.
Source: Ambito
