The minimum wage lost 26.5% in real terms during the Javier Milei era and almost 60% since 2011

This was reflected in a report published by the Interdisciplinary Institute of Political Economy (IIEP) from the University of Buenos Aires (UBA)prepared based on data from the Ministry of Labor. The work highlighted that, despite a downward trend that has been observed for more than a decade, the real fall in the Minimum, Vital and Mobile Salary (SMVM) has intensified in recent months.

Indeed, since the acceleration of inflation caused by the last major devaluation, The SMVM of January this year had already been reduced by 17% compared to the value of November“Between February and May, the nominal increase accompanied inflation, so no additional reductions were observed. In June, there was a new fall, followed by a certain recovery in July and a new contraction in August,” added the IIEP.

In August there was an adjustment of the minimum wage, which went from $254,232 to $262,433. Thus, the increase was only 3.2%, when inflation in that month was 4.2%, according to recent figures released by INDEC.

“The previous downward trend, together with the strong contraction of these months, places the SMVM among the lowest values ​​in the series, except for the first years of convertibility and after its collapse, in 2002/2003. It also implies a 59% erosion with respect to the maximum value of the series, in September 2011,” the IIEP explained.

What is the Minimum, Vital and Mobile Salary?

The Minimum, Vital and Mobile Salary defines the level of income that a person can receive as compensation for his/her work. Furthermore, it also works in fact as reference for the payment of some social programs or the alimony in the case of separated parents.

As an example, the beneficiaries of the Boost Work They charged the equivalent of 50% of the SMVM, although with its replacement by 2 other programs this was modified to a fixed amount. Another case is that of the Progresar Scholarshipswhere students whose families have incomes of more than 3 SMVM are excluded.

The wage crisis was compounded by the employment crisis

Although real wages have further declined since Milei’s arrival at the Casa Rosada, the truth is that they have been showing a deterioration for years. On the contrary, what has changed more noticeably in recent months was the dynamics of employment: while during the Frente de Todos Government the unemployment rate remained low (although in a context of growth in the phenomenon of poor workers), Since December, a strong loss of jobs has begun to be observed.

According to the latest data from the Ministry of Labor, Between November and June, 182,500 salaried jobs were lost (sum of private, public and home employees), while the contraction is 204,100 if the last peak in August of last year is taken into account.

The job creation rate improved in July, although it remains at historic lows

The employment entry ratewhich measures the percentage of new workers in relation to the stock of employed people at the end of the previous month, improved in July for the first time since January but still remains low by historical standards.

In fact, this rate grew from 1.3% to 1.6% in the seventh month of 2024. However, it is worth noting that between August 2021 (the end of the pandemic) and November 2023, this percentage was higher, reaching a maximum of 3% in that period, in March 2022. From the IIEP they stressed that Only the most critical period of Covid-19 and some months of 2002, after the collapse of convertibility, were worse in this regard.