It is already above the pre-pandemic level and is the highest IMS for a month of July in almost 50 years, in a context of low inflation.
The real wage marked a new rise in Uruguay and is a record, according to INE data.
Photo: Freepik
He National Statistics Institute (INE) released today the Average Wage Index (IMS) which increased by almost 9% nominal in July compared to the same month last year and, given that the inflation in the same period was 4.8%, the real increase in the salary it was 4% per year.
The data for July incorporates two important bullish factors. On the one hand, it includes the recent increase agreed in the construction sector, which had a pending adjustment in the Salary Tips (which even led to a conflict that lasted several weeks). Finally, there was white smoke and a nominal increase of 10% year-on-year was registered, which implies a real increase for the construction sector of 5%.
Likewise, higher increases are incorporated in the restaurant and hotel sector, which came with more moderate increases to prioritize the recovery of the employment in this activity, badly hit by the pandemic.
But the main factor for the growth of the actual salary is the strong reduction of the inflation what happened in Uruguay in recent months, falling in July to 4.8% annually, the lowest value in almost 20 years. This process occurred simultaneously with the increase in nominal real wage adjustments, based on the government’s objective of bringing real wages to their pre-pandemic levels at the end of the current administration (real wages fell between 2020 and 2022, precisely because of the pandemic and the peak of inflation due to the war). Everything indicates that this objective has already been anticipated for this second semester of 2023.
In this way, the real wage in July already exceeds pre-pandemic levels, remaining slightly above the record for July 2019. Looking with a greater historical perspective, it is the highest real wage for a month of July since the beginning of the 70’s (almost 50 years).
The salary advance by sectors
In addition to what is mentioned for construction and for the restaurants and hotels category, the data for the INE continue to show the highest year-on-year increases in the sectors of health and education, with real increases of 6.9 and 5.5% annually respectively.
Variations in the industry and the trade they are more moderate, but equally positive: 2.9% and 1.5%. In the State, the workers of the central government have had a real increase in the last year of 5.6%, while in the case of the workers in the municipalities and state companies they show a real increase of 3.6% per year.
The increase in real wages occurs simultaneously with growth in employment, as has been seen in recent months. The challenge for the Uruguayan economy is to be able to sustain both tendencies together while maintaining the competitiveness and the activity.
Source: Ambito
