Formal salaries improved in November, but in the first year of the Milei era they lost 4.9% in real terms

Formal salaries improved in November, but in the first year of the Milei era they lost 4.9% in real terms

The salaries of formal workers registered their seventh consecutive monthly improvement in November. In the eleventh month of the year, this salary segment observed an increase of 3.1%as reported by the National Institute of Statistics and Censuses (INDEC)in front of a inflation of 2.7%. Even so, In the first 12 months of the Milei era they suffered a loss of almost 5% in real terms.

The registered private salaries showed an improvement of 3.3% in November, while the public sector inflation of that month slowed down, 2.7%. In the first eleven months of 2024, assets advanced 140.8% and 115.6%, respectively. This implied a cumulative increase of 132%.

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In the management of Javier Mileiprivate salaries improved by 167.4% and the public 127.4%. As a whole, they showed progress 153%although they lost 4.9% purchasing power.

This deterioration is explained in its entirety by state salariessince in this segment the loss compared to November 2023 is 14.5%, despite the fact that it has accumulated five months in a row without setbacks. On the contrary, In the private sector they have already recovered the level prior to the arrival of the libertarians to Pink Housealthough they were barely located 0.5% above.

The Ministry of Economy celebrated the salary data: what is behind it

“Salaries continue to grow above inflation”celebrated the Palacio de Hacienda on its official social network X account (ex Twitter) and accompanied the publication with a plaque showing that the wages they grew 138% (accumulated in the first 11 months of 2024), while the inflation was from 112% and the Basic basket grew 82.5%. However, the data taken by the portfolio commanded by Luis “Toto” Caputosince, if the year-on-year value were taken, it would be below the consumer price index (CPI), since salaries rose 159.1% and inflation, a 166%.

Likewise, the data that Economía takes is the salary index, which includes those registered private and public, and those not registered. This last segment has a delay of five months in the measurement, since it is done based on the Household Population Survey (EPH) and “arises from working with the quarterly moving averages of the geometric averages of hourly earnings,” according to the statistical institute. In a context of slowing inflation, the increase in workers’ salaries without discounts is much higher than normal. It should be noted that, if the month of June is taken -5 months before November, which is the month to which this measurement would be equivalent – inflation was 4.6%, a little less than double that of November, therefore, the salary increase is also higher.

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Wages: why does consumption fall if wages recover?

The Sales in supermarkets fell 7.6% in November, at the same time as the registered private salaries slightly improved their purchasing power. Not so for public and unregistered ones. The phenomenon that salaries improve and consumption does not has a point in the approach taken Scope months ago about the change in the consumer basket with which the INDEC measures inflation, with a weighting more adjusted to the reality of Argentines.

In that sense, the Center for Argentine Political Economy (CEPA) states that if inflation had been measured correctly, the purchasing power of salaries would not have improved, but, on the contrary, would have fallen.

The report explains that the correlation between the average recorded salary of the economy and sales in supermarkets is 0.838 between January 2017 and November 2023. Instead, From November 2023 to the same month last year the index plummets to -0.05. It should be noted that the indicator establishes that 1 is equivalent to total correspondence and zero represents zero correspondence.

“How is this divergence explained? The reason is that the current inflation measurement does not represent the consumption basket of Argentines. reflects a distorted salary recovery”, concludes the report.

Source: Ambito

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