The workers’ inflation accelerated by 0.4 points compared to May and reached a rise of 5.1% in June. Meanwhile, family per capita income contracted 15.1% year-on-year in the first quarter of 2024.
The year-on-year inflation reached 282.7% and the accumulated increase in the first half of the year was 88.3%, according to the report that is released monthly by the Institute of Workers’ Statistics (IET) of the Metropolitan University for Education and Work (UMET) and the Center for Concertation and Development (CCD) based on a basket of consumption in this segment. Meanwhile, the prices of services such as electricity, gas and water drove the general dynamic upwards.
“Similar to the last five months, the slowdown in inflation in June was associated with two factors: the stability of the nominal dollar (which rose again by around 2% per month), and that international inflation (import and export prices) showed a downward trend, especially the dollar prices of cereals and oilseeds, which have a great impact (direct and indirect) on domestic inflation,” the report states.
By concept, The measurement was driven by Housing, which rose 10.7% in the month, mainly due to increases in electricity and gas; and transportation, which climbed 5.1 percent, with increases in subway and gasoline standing out. The rest of the items also recorded increases, although below the monthly average. Among them, communications stands out, which increased 4.5%, the education sector rose 4.4% in the month, and recreation and culture increased 3.7%.
A little less accelerated were located home equipment (+3.3%), Clothing and footwear (+3.1%), Food and beverages (+3%) and Health (+2.2%).
What the survey says about wages
The flip side of price increases is also reflected in wages. “First of all, the fact that wages are rising is striking. severe rise in inequality, “measured by the Gini coefficient of per capita family income. This metric ranges from 0 to 1, where 0 is a situation of perfect equality (i.e. where all income is distributed in exactly the same way) and 1 is a situation of perfect inequality (where one individual appropriates all the income generated). In the first quarter of 2008, the Gini coefficient reached a value of 0.467, the highest since 2008, and a considerable rise with respect to 2023 (0.446),” begins the second part of the report.
“On average, Household per capita income fell by 15.1% year-on-year in the first quarter of 2024. All income strata lost against inflation, which predicts a notable rise in poverty and indigence when INDEC releases the measurements in September,” the document states and warns that “ The declines were much deeper in the poorest strata than in the better-off.. In the 1st decile (10 percent with the lowest incomes), purchasing power fell by 26.1 percent year-on-year, while in the 10th decile (10 percent with the highest incomes) it fell by 11.3 percent. This is why inequality rose and reached its highest level since 2008.”
For analysts, “the reasons behind this differentiated behavior in real income are associated with the employment income, which make up more than 75 percent of household income and are the main source of income in all social strata, even in the poorest. Income from work showed a dissimilar pattern between the most vulnerable and the most affluent workers: while real labor income in the poorest 10 percent contracted by 31.9 percent, The drop was single-digit in the top 20% of income earners.”
And, as detailed in the report, “this is because the recession affects proportionally more the income of less qualified workers, generally more subject to precarious jobs and with high volatility in the hours worked, which tend to be very procyclical. In turn, the reduction of income tax “At the end of 2023, it benefited workers in deciles 9 and 10 much more than the rest. This explains why the decline in purchasing power in this stratum was much more moderate,” they commented.
Source: Ambito
