Although in the second semester of 2024, wages crossed a recovery process, although very heterogeneous between workers, the government seeks that the peers run behind price increases as a complement to the strategy to continue slowing inflation. Facing this electoral 2025, it is worth asking whether the contribution of the salary anchor to disinflation weighs more than its negative effects on economic activity and social climate.
A report of the CP consultant He stressed to the “power of the exchange anchor” as the factor that explained most of the deflationary success of recent months. This in turn allowed a partial recomposition of purchasing power, since although the agreed increases were reduced in nominal terms, the fastest deceleration in the consumer price index (CPI) caused them to continue growing in real terms.
For this year the dynamics find some changes, since Javier Milei and his economic team have among their obsessions further reduce the nominality of the entire economy. While the Central Bank (BCRA) has already announced the decline of the “Crawling PEG” for the official monthly dollar and cut the rates, the Executive Power intends to impose a salary pattern also closer to 1%.
According to the last survey of market expectations (REM) of the BCRA, the inflation expected by the market is 2.5% for January and 2.3% for the following two months. In that sense, The salary recomposition process runs serious risks of interrupting.
Disinflation vs. Consumption roof: What will be the strongest effect of the salary anchor?
“Within the framework of increasingly low monthly inflation, the points that salaries can gain on prices are getting lower. The real increase mechanism via deflation begins to run out and this puts the government in a disjunctive between continuing to strengthen the salary anchor along with the exchange or being less demanding to allow a recovery of purchasing power and the level of activity in an electoral year“CP said in his last published analysis.
In front of the consultation of Scope, Federico Pastranadirector of the consultant, said that for him “prices and salaries could be aligned in a less aggressive way for the latter, so that the strategy is not so recessive and regressive.”
For its part, Gonzalo CarreraBalancia economist, stood out in the first place that both the decline in inflation and the rebound of wages and economic activity at the end of last year were better to what was expected. Faced with these achievements, he hopes that the Government will continue to bet “all in” that inflation continues to fall, although at the expense of a much stronger exchange delay. In parallel, View in the official strategy a need for “salaries not growing so much” since this would allow deflation to deepen and cushion the exchange rate appreciation.
Salaries recover, but not so much in historical perspective
The latest data from INDEC showed that Salaries of formal workers in the private sector They recovered in November 2024 for the first time the level prior to the arrival of the libertarians to Casa Rosada. Different was the situation of employees state That, although they accumulated five months without loss of purchasing power, they still submitted 14.5% lower than those of November 2023. Likewise, the lag for workers’ data Informal It makes the calculation more difficult, although a panorama is estimated more similar to that of the public sector than to the registered private sector.
Carrera predicts that the disinflation path will remain in the short term and that, with it, real wages will continue to have improvements “although every time at a lower pace.” However, he emphasized the heterogeneity of the “economic model”, which will be deepened And it will have clear winners, especially linked to the formal private universe and uncompable, and losers, such as the public sector and some private sector areas linked to tradable activities.
Meanwhile, the CP report clarified that the recovery of salaries must be placed in perspective, since Private salaries are at the lowest levels of the last 14 years, close to 2010while retirements have an even lower level, assimilable with the reality of 2005.
“These income levels are historically associated with moments of tension and some disagreement With the economic situation that support the hypothesis of the distributive conflict, a backdrop of inflation in Argentina. Without income recovery perspectives, once the success of disinflation is digested, it is worth asking if the historical mechanisms associated with said conflict will not be reactivated, “said the consultant.
In relation to previous moments with levels of salaries similar to the current ones, Pastrana stressed some differences in the environment, such as the largest instability and Fragmentation of the labor market At present, factors also influential when understanding the power of organization and strength of workers.
Source: Ambito
