The other side of the cheap dollar: how the appreciation of the peso hits the Knowledge Economy

After the devaluation of 54% in Decemberthe Government stepped on the dollar with the “crawling-peg” of 2% and the peso appreciated due to the inflationary acceleration during the first months of the year. The other side of a peso more appreciated in a more expensive Argentina -measured in dollars- is that some sectors, such as the Knowledge Economy, They are already suffering and One of the big problems is the increase in the cost of local labor.

Just as the country it became more expensive for him tourismalso the Dollarized salaries lagged behind the current cost of living. The weight appreciated 31% against the official dollar between December 2023 and November 2024, while in relation to the MEP dollar did it in 50%, as measured by the economist Juan Telechea. This generates less competitiveness. Prior to this increase in the cost of living in dollars, the situation was reversed: the peso was weak and the currency was powerful.

The other side of the cheap dollar: the salary of the sector suffers an increase

From the sector of Knowledge Economy They assure that there is a increase in salariesdue to this phenomenon. Although there is also a greater “specialization” of workers. “Argentina is an important technological pole. Today there is a migration of positions. Although Argentina competes with India, it now has a more concentrated service in positions of greater relevance,” he told Scope Patrick Dewey, commercial & marketing director of Adecco Argentina.

“Salaries are the main production cost we have in the sector”he assured Luis Galeazziexecutive director of Argencon, an entity that brings together the main companies in the Knowledge Economy. These represent between 50% and 70% of a company’s budget.

Until August, the median salary for software services is $1,000,000, while for hardware is $850,000, according to the release of the Computer Work Observatory of the Computer Trade Association. “The purchasing power of salaries has not improved for many years”he assured Esteban Sargiotto, director of the institution.

“The aggravating factor is that, now, with the appreciation of the peso and the stagnation of the dollar, many companies that made payments in foreign currency – averaging a number of months – reduced salaries even more. The most current example is Globant, which does not increase wages. salaries a year and a half ago,” Sargiotto catapulted.

The unicorn valued at more than US$9.9 billion pay the 70% of the salary in dollars and the remaining 30% in pesos. The underlying issue is that the proportion to be paid in foreign currency results from a calculation that averages the official value of the dollar in the last three months and the big problem is that, For months, the value of the dollar in Argentina has been flattened and inflation in local currency worsens day after day.

Hence, Luis Galeazzi He agreed with the difference between the specialization of Argentine talents and highlighted that currently the least specialized workforce is the one that is in “problems” due to the appreciation of the peso.

“Normally exports that have low professional quality are negotiated by price. In this case, the one with the best value wins because the quality is almost indifferent, so in that game having a dollar behind and more expensive costs in dollars takes you out of the game,” Galeazzi explained.

Knowledge Economy: the sector fell almost 20% in 2024

According to Dewey, Casual outsourcing fell 18% in the year due to the economic crisis. Currently, the sector is at a “floor”, although in 2025 they expect it to have a “bullish” trend.

“Today we are at a bottom, it seems to me that next year we should have an upward trend,” he said.

In that sense, the commercial & marketing director of Adecco Argentina maintained that the approval of the Bases law, with the labor reform it contains, “it will help.” “Those who had doubts about eventual hiring by the supposed ‘trial industry’, with this regulation they will be able to hire well,” he analyzed.

“If this economic policy results in stability with the dollar, this economy is convenient. Although it forces you as a company to adapt and review your value propositionas well as your products, services and markets. If this is the price that must be paid for exchange stability, there are many companies that will benefit – from the point of view of a greater possibility of exporting and availability of dollars – and also the workers,” observed Galeazzi.