In 1980, a modest 3-room apartment of 75 meters in CABA cost US$90,000 (about US$1,200 per square meter, 6 salaries of the CFO of the importing company). At the end of 1983, a 2-room apartment used in CABA was available – in very good condition in a middle-class neighborhood – for US$10,000 (around US$220 per square meter, the CFO earned US$ 3,000 and, I could pay it with 3.3 months of salary). In the “happy nineties”, the same two-bedroom apartment did not cost less than US$60,000, the CFO earned US$8,000, and needed just under 7.5 salaries to buy it.
In 2017, during construction, a brand new 2-room apartment in CABA, in an average neighborhood, cost US$200,000, the CFO’s salary was around US$10,000 and he needed 20 salaries to buy it. Only 2 years later, in 2019, during the same government it cost US$120,000, the salaries of a CFO were US$5,000, and it took 24 salaries to acquire it.
MILEI COMPARE PEARS WITH APPLES
During different conversations with journalists, the president tried to establish parallels of income in dollars from the years 1990 with 2024 and wanted to conceive equivalences.
Milei told Chiche Gelblung: “In convertibility the average salary in Argentina was US$1,800 which, in today’s currency, would be US$3,000. However, today they are $600 dollars,” she concluded. Chequeado.com considered this statement unsustainable, since most experts do not trust the methodology of comparing income due to the variability of the dollar and, instead, suggest doing it according to its amount in pesos updated for inflation. According to this methodology, in January 1995 the average salary of a stable worker, measured in dollars, was equivalent to $1,908.
The relationship “prices and wages” is what we must observe. Just as inflation is a multi-causal phenomenon, the value of the dollar and its pass through (pass through prices) is also multi-causal. The (pass through, or pass to prices) depends on the political economic context – level of unemployment, degree of unionization, inflation level, inflationary volatility. Thus, it could happen that the price pass is low as in 1981/1982: (+41%); or medium as in 1988/1989: (+83%) and; high as in 1990-1991: (+265%). Even international experience indicates that there are examples where devaluation produced temporary and low inflations (countries with strong governments, even dictatorships, capable of instituting a stabilization plan by any means) and there were also high and lasting inflations: Mexico 1982, Chile 1982, Argentina 1986-1989.
Two days ago Milei said: “The salaries They have started to beat the inflation”
The union members ironically said: “if it is true, the salaries of Karina Milei and Manuel Adorni, along with those of the Senators, beat inflation.”
Any professional in economic sciences has a thousand tricks to demonstrate inventions of the type asked of him.
We are going to simulate an arithmetic exercise available to everyone.
ACTUAL DATA OF THE ASSUMPTIONS:
In December 2023, the dollar bill cost $1,250. It currently costs around $1,000. The peso appreciated against the greenback. The peso beat the dollar during the Milei Governmentwhile inflation in pesos accumulated a 90% increase.
EXAMPLE
If an average employee earned $1,000,000 out of pocket in December 2023, they received $800. If in the Milei months, they had accumulated salary increases of 30% in pesos, they now receive $1,300,000, which is equivalent to $1,300. . If his expenses in December 2023 were $700,000, in December he spent $560 per month. He saved (US$240) or 30% of his salary.
As we said, the accumulated Milei inflation in pesos is 90%, which is why the expenses of that employee, in pesos, went from $700,000 to $1,330,000 per month, equivalent to $1,330. Now the subject no longer saves, because he earns $1,300 and spends $1,330. He is missing $30 to make ends meet. That is, this subject now spends 137.50% more in dollars than in December 2023 and, he stopped saving 30% of his salary in dollars, as he did in December 2023.
In summary: Your salary since December 2023 increased in dollars by 62.5%, but your expenses until the end of March increased in dollars by 137.50%.
More than a dollarization, it seems that we were going to a pesification, since the peso is stronger than the dollar with Milei.
EVERYONE PUTS
Part of the “middle class” is often deceived by their own self-perception and desire. Some would like to be Americans, others have been supported by the idea that they reside in a European country, not a Latin American one.
But “The most sensitive organ of man is the pocket,” said Juan D. Perón. The virtual wallet of the middle class is not comfortable with what is happening. The average citizen complains. Yes why “if you are seeing it”, not because he doesn’t see it.
The situation for the “middle class” has become a true hell. He has left dinner at an average restaurant because it costs between $80,000 and $100,000 for a couple with two children. We are talking about 90 dollars average. If you have a child who goes to a private university, you pay an average of $300,000. The most popular platform costs $15,000, cable and connectivity $60,000, cell phone $38,000, prepaid increased 158%.
“Damn freedom” prevents you from taking weekends on the coast, dining at restaurants, or buying clothes. Many have gotten off prepaid medicine, platforms, and even the cable soccer package. If the “middle class” is “the caste”, then in India it would be closer to the “outcasts” than to the Brahmins.
In Argentina we are experiencing a global epiphenomenon of the libertarian phenomenon: we are inaugurating “downward social mobility.”
Director of Esperanza Foundation. https://fundacionesperanza.com.ar/ UBA Postgraduate Professor and Master’s Degrees at private universities. Master in International Economic Policy, Doctor in Political Science, author of 8 books, @pablotigani
Source: Ambito
David William is a talented author who has made a name for himself in the world of writing. He is a professional author who writes on a wide range of topics, from general interest to opinion news. David is currently working as a writer at 24 hours worlds where he brings his unique perspective and in-depth research to his articles, making them both informative and engaging.
