The real salary collapsed during the first year of the Milei era: which were the sectors that suffered the most from the adjustment

With the devaluation of December 2023, the salaries of workers registered in the private sector sank 11.5% in real terms, according to data from the Argentine Integrated Pension System (SIPA) published by the Ministry of Labor. Only in April did they begin to recover in a tenuous way, reaching 0.5% above the last figure of Alberto Fernández’s mandate in July.

Private sector salaries lost 2.4% in the Milei era

However, in August and September (for this last month the data is preliminary) they fell again, until they were 2.4% behind the November 2023 level..

The latest report of the CP consulting pointed out that the slowdown in inflation, which stabilized for several months in the 4% zone, also implied a wage negotiation with a lower nominal value, for which For wages to show a significant recovery, they need the Consumer Price Index (CPI) to decelerate more quickly..

The October data, which showed a monthly increase of 2.7%, helps in that sense, although the entity led by Federico Pastrana and Pablo Moldovan maintain that the dynamic should be sustained over time.

Likewise, it is worth noting that, beyond the comparison with 2023, The current average salary is 20% lower than the maximum of the last decadenoted in September 2015. And this is the income of the segment of the population with greater protection and stability in terms of employment, which directly correlates with better salaries, despite the heterogeneity that exists between the different sectors of the economy. .

State, informal and retired, the most affected

In fact, according to the INDEC state salaries lost 16.1% in the first ten months of the Milei era, which is why they did not recover anything from the collapse they suffered from the discrete jump in the value of the dollar validated by the Executive Branch a few days after arriving at the Casa Rosada. In parallel, The estimate for informal workers, more imprecise due to the delay in the registration of information, indicates a loss of purchasing power close to 17% between December of last year and April of this year.

At this rate, The registered private sector would recover the level of November 2023 in February 2025, while the public sector would do so only in May 2028.a situation that seems unsustainable in social terms

“With the devaluation of December 2023, all real incomes fell even more than they already were, those with the greatest drop being those of retirees who do not earn the minimum“, he expressed in dialogue with Scope the director of the Argentine Institute of Fiscal Analysis (IARAF), Nadin Argañaraz.

Outlook for 2025: analysts focus on exchange rate policy and trade openness

For the economist Juan Grañathe future of exchange rate policy will be an important determinant of the dynamics of employment and wages. According to your vision, There will be few sectors with the possibility of generating employment if the exchange rate appreciation deepens and progress is made in greater commercial opening.

“The spillover from the hydrocarbon sector, agriculture or, on a smaller scale, lithium, is little in terms of employment and these are activities that are far from consumption centers, which prevents their benefits from flowing to other sectors. On the contrary, the industry is going to have problems due to the impossibility of competing and commerce tooif employment is not generated in the cities between industry and construction. It is difficult for wages to grow without job growthin a job market that is not very tense and that is not very in demand,” he deepened.

Regarding credit as a driver of reactivation, Graña maintained that The discussion should be “what is the mechanism by which these credits are repaid”. “The financing of daily life has many problems and you need a recovery of employment in homes; If the very strong purchasing power in households is not going to improve, the number of recipients has to grow and that does not seem to be the context we are going to either,” he pointed out.

For his part, Argañaraz sees the private sector with better prospects of salary recomposition but with sectoral heterogeneity, those sectors most exposed to a scenario of greater commercial openness being more affected. Likewise, he sees a gloomy outlook for the state.

Regarding the latter, Graña sees a political intentionality in maintaining public salaries at these low levels or in keeping the minimum wage outdatedwhich works as a parameter for the adjustment of some social benefits and could harm the long-sought fiscal surplus.

Faced with this scenario, the expert characterized the macro growth scheme as “quite fragile” and emphasized again that Ultimately, the discussion lies in the sustainability of the level of the real exchange rate and the exit horizon from the stocks.because “until now everything is anchored to the stocks being maintained.”