The economist Juan Carlos “El Prof” of Pablo, one of the references that President Javier Milei hears the most, analyzed this Sunday what will be the path that prices, wages and inflation will travel in 2025. In this way, he analyzed the importance of the statistics, the new measurement modes in which INDEC works and the impact on the CPI that the government reports month by month, whose last data showed 2.2% for the month January.
Pablo’s prognosis took as analysis data on INDEC, between December 2023 and December 2024, on average unregistered private salaries (informal economy) increased 196.7%, registered private wages rose 147.5% and public salaries, 119.3%. Since, during the same period, on average consumer prices increased 117.7%, this implies a generalized, although disparate improvement of the purchasing power of wages, which was 36.3%, 13.7%and 0 , 7%, respectively. No one who is respected can believe this, but what reasons exist so as not to believe it?
In this regard, I consulted the American Phyllis Ann Wallace (1924-1993), born in Baltimore. Despite having the best notes of the secondary school, state legislation prevented “African -American” students from entering the University of Maryland, but provided financing to study on other sides. Therefore he studied at the University of New York and Yale. In this last university it became the first doctor of African -American origin. Due to department regulations, Yale did not hire her as an assistant professor, although as a research assistant. From 1953 he taught at the University of Atlanta, and since 1972 at MIT. Louise Forget indicates that Wallace had difficulty attending the annual meetings of the American Economics Association, when they were held in cities that restricted African -American access to certain public spaces, and their protest influenced so that the 1958 meeting does not It will be done in New Orleans.
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– In 1965 you began working as head of technical studies of the Commission for Equal Opportunities.
–It’s Orley Ashenfelter, James Heckman, Ray Marshall, Robert Mc Kersie and Lester Thurow we work on the preparation of the historical trial for discrimination against AT&T. Experience generated questions: can equity in labor matters achieve? How do people do to assign their work roles? What kinds of conflicts between efficiency and equity can be tolerated, as different kinds of workers are incorporated into the labor market? How can the current manifestations of discrimination be minimized without imposing an unjustifiable burden on others? And, what are the internal mechanisms of the labor market that can facilitate or hinder the achievement of equal employment opportunities?
– Official estimates on evolution of wages and prices in 2024 have generated many doubts. Do you have any foundation?
– The management of Marco Lavagna at the head of INDEC has not deserved any accusation of “drawing”, as happened as of 2007 with the estimation of the consumer price index, and all those variables that used that as input. For example, poverty and destitution lines.
– Are you saying that all doubts are unfounded?
– No, I am saying that we put aside light and conspiracy opinions, to which Argentines are so affected, to concentrate on methodological issues and the use to be given to statistics. Those who claim that “they do not believe in anything that says Indec” will be given deep in front of relatives and friends, but in general they do not know what they are talking about.
– What are statistics for?
–Noadie consults Indec to know if it is busy or unemployed, or if your company imports or exports more than before. The Indec is consult to know if what happens to one also happens to many. Example: I am left without work. This is a fact. Consultation of Indec to know if the unemployment rate is increasing, because in this case I will not feel bad personally, but I will become pessimistic thinking about the probability of getting a job; While if the unemployment rate is decreasing, I will feel bad personally, but optimistic thinking about my future work.
– Can one “feel” that Indec is underestimating the true inflation rate?
– It can, but hardly the sensation arises to analyze all your purchases. In fact, when someone asks who he doubts, he answers with the price of the product that increased the most. Example: How can it be that INDEC says that the inflation rate was 2%, when a few days ago I paid 20% more for a certain good? In addition, INDEC measures the average price increase, but when rentals suffer a jump, tenants are worse than Indec said, and owners better.
–The weighting structure (the “basket”) used by INDEC for the calculation of consumer prices index became old. Can this be the cause of underestimation of the true inflation rate?
– INDEC estimates the inflation rate based on samples. Over time, goods appear and disappear, and also points of sale and marketing modalities, which periodically forces the baskets. I understand that this is Indec. From the angle of change in relative prices and their influence on the consumption of different products, we should expect the new index to show less inflation than the old man. But better wait for the results.
–The official estimates of the increase in consumer prices also generate doubts in other countries?
– Take what just happened in mine. Between December 2024 and January 2025, on average consumer prices increased 0.5%, “nothing” for Argentines, but a lot in the United States. After several months of increasing 0.2% monthly, the inflation rate climbed to 0.3% last November, already 0.4% in December. According to some, this rise in the inflation rate was due to the increase in the price of eggs, product of the avian crisis. Question: Can it be that in an economy as large as that of the United States, the increase in the price of eggs “move the ammeter”?
– Do you add to the idea that statistics are like bikinis?
-That’s how it is. It is said that both, what they show is important but what they hide is fundamental. This version is what must be mentioned to the “statisticomaniac”, who pay attention to the decimals. This ignores the conceptual and practical limitations that all statistical estimate has. To the “statisticalophobic” you have to tell them the opposite: that the statistics what they hide is fundamental, but what they show is important. To think that anyone has better estimates than INDEC, inflation rate, poverty and destitution line, or GDP, sounds very beautiful but is not thinking.
– Doña Phyllis, thank you very much.
News in development.-
Source: Ambito
