The real wages of formal workers within the private sector, which are usually the most stable in the Argentine economy, stopped a four-month process of partial recovery in August and they seem to have stagnated at a level much lower than the maximums recorded during the last presidencies. Many analysts agree that the salary anchor is one of the pillars of the current Government’s disinflationary strategy.
According to data from the Argentine Integrated Pension System (SIPA), recently published by the Ministry of Laborthe average remuneration of people with salaried employment registered in the private sector fell by 2.6% monthly in Augustif the inflation of the period is taken into account. Thus, compared to November 2023prior to the assumption of Javier Milei as president, said remuneration lost 2.1% real.
Likewise, salaries are 7.8% below the maximum recorded by Alberto Fernández’s management (July 2023), 15.7% behind Mauricio Macri’s maximum (August 2017) and a 20.1% of Cristina Fernández’s record (September 2015). This deterioration leads to the current level of salaries is one of the lowest in the last 20 years.
The salary anchor, one of the pillars of Caputo’s disinflationary strategy
“Without a doubt, the wage anchor is the key to disinflation. That is why Caputo does not want to run even a little bit from the “crawling” of the exchange rate at 2% monthly (a greater variation would imply a greater adjustment of variables such as prices and the dollar)”, the economist said in dialogue with this medium. Federico Zirulnik.
The chief economist of the consulting firm EPyCA, Florence Fiorentinagreed with that vision, especially in the case of public sector salaries and retirement income.
It is worth noting that the data mentioned previously for formal workers in the private sector leave out the incomes most affected by this Government’s measures. As an example, salaries of state employees in August were 16.5% below the level of November 2023according to INDEC data, while it is estimated that informal workers also lost close to 20% in real terms during the first months of the libertarian mandate (although in this case the measurement is more inaccurate).
Will economic activity be able to grow with this level of salaries?
Nevertheless, The private sector did lead the employment losses, with a reduction of 138,5785 salaried jobs in the first nine months of Governmentdespite the fact that in August the negative streak was ended and 4,000 new workers were added. Construction and manufacturing were the most affected sectors in this regard.
Taking into account the stagnation of wages at very low levels, and the recent destruction of employment, Zirulnik estimates that “the rebound in activity may return to the levels of October/November of last year but not much more.” Towards the medium term, he warned that the industry may suffer from the combo of commercial openness and exchange rate appreciation, and that He does not see much room for salaries and activity to recover without putting pressure on the dollara variable that seems untouchable for Milei and Caputo.
For its part, Fiorentin does not foresee a significant reactivation of activity since “the sectors that are driving the level down are the domestic markets, construction, commerce and the manufacturing industry.” “Exports of manufactures, both of agricultural and industrial origin, rose due to the greater availability of exportable balances generated by the fall in consumption and income. Even so, the level of activity remains at low, ‘sticky floor’ levels. as we have been saying from EPyCA,” he said
Source: Ambito
I am Pierce Boyd, a driven and ambitious professional working in the news industry. I have been writing for 24 Hours Worlds for over five years, specializing in sports section coverage. During my tenure at the publication, I have built an impressive portfolio of articles that has earned me a reputation as an experienced journalist and content creator.
