MercoPress. South Atlantic News Agency

Business leaders and organized labour ignore Argentina’s official inflation index

Jose Ignacio de Mendiguren, head of the UIA “it is evident nobody takes into account the (Indec) percentage”

Following the agreement which raised the Argentine minimum wage by 25%, equivalent to 549 dollars per month, business leaders and representatives from the labour unions admitted that when it comes to salaries negotiations the official inflation index from the government statistics office, Indec, “is not taken into account”.

Last Friday after several rounds of negotiations government officials brokered the 25% agreement between labour unions and business leaders, which was praised by President Cristina Fernandez de Kirchner. Unions were demanding 41%.

“The new minimum wage will be 2,300 pesos (549 dollars) per month, from the previous 1,800 pesos” said President Cristina Fernandez adding that the agreement shows that all sides involved in the negotiation “live up to the expectations society has for them”.

“Labour unions claim based on supermarket prices and not the official indexes. We have always said that when the published indexes are not clear, in the long run you achieve the contrary to what you aim for. Not knowing what the real indexes are makes people take additional protection and it ends creating more negative expectations about future increases”, said Jose Ignacio de Mendiguren, head of the Argentine Industrial Union, UIA.

“I’m only saying what is public, if all contracts are done on other estimates, or the provinces publish other (consumer prices) indexes, it’s evident nobody takes into account that percentage”, added de Mendiguren.

Labour leader and lawmaker Omar Plaini who also participated in the negotiations agreed with the head of UIA and said that “if we look back into the history of wage negotiations it is evident discussions have never been based on the Indec”.

However, “Indec has an analysis system that determines its own reality. Never have we negotiated based on Indec, but neither based on the estimates from private consultants”.

The minimum salary in Argentina has increased 820% since 2002, and is the highest in Latin America the government said at the beginning of the round of negotiations of the Wage Council. The new minimum will not have scales of implementation and became effective August first.