MercoPress. South Atlantic News Agency

Bitter year's ending for Argentines earning more dollars to buy less

Milei insists that earnings averaging US$ are an improvement regardless of their actual purchasing power

Last year might have meant a battle won against inflation by the Libertarian administration of President Javier Milei. Still, it also represented a significant wage loss for most Argentines if not the disappearance of their livelihoods altogether as it happened to temporary State workers whose contracts were not renewed as customary under previous governments.

 Although the Libertarian camp and Milei himself insist that the minimum went up in US dollars, averaging U$S 1,100, the Overview of Formal Salaried Employment and Remuneration (Panorama del empleo asalariado formal y de las remuneraciones) study released earlier this week by the University of Buenos Aires' (UBA) School of Economics showed that the actual minimum wage fell by 30% in one year when measured from its purchasing power.

In November alone, it decreased by 2.4%, the UBA's Employment, Distribution, and Labor Institutions Area (EDIL) of the Interdisciplinary Institute of Political Economy (IIEP) found. This evolution is the consequence of a more extensive downward process dating back to December 2023 when amid rampant inflation it contracted 15%, followed by an even greater drop of 17% the following month, after which no further reductions were observed as upward adjustment in face value payscales were adopted. But in June, there was a new drop of 4.4%, followed by a 4.3% recovery in July after which it was all downhill for an accumulated 30% nosedive between Nov. 2023 and the same month in 2024.

In September, the survey detected a stop in the fall amongst private workers with only two sectors out of the 13 considered posting a negative variation: Transport (0.2%) and Personal Services (0.1%) while Trade went up (0.4%) as did Construction (0.3%) and Real Estate Services (0.3%).

After eleven months of consecutive declines, employment in Industry showed a slight increase in August (0.1%) and in September (0.3%), with 2,000 new jobs. From September 2023 to July 2024, over than 33,000 formal jobs were lost.

In September, employment grew in 19 provinces, most notably in Tierra del Fuego, La Rioja, Misiones, and Santa Cruz but fell in Chubut, Río Negro and Catamarca. However, Buenos Aires, the Autonomous City of Buenos Aires, Mendoza, Santa Fe, and Misiones accounted for most of the positive variation in total private formal employment.

The review drafted by Roxana Maurizio and Luis Beccaria also underlined that in real terms, the minimum wage stood “at a lower value than in 2001, before the collapse of convertibility.” The latest figures also entailed “an erosion of 61% with respect to the maximum value of the series, in September 2011.”

Milei decreed that effective Jan. 1, the minimum monthly salary would consist of AR$ 286,711 (around US$ 286) and AR$ 1,434 (around US$ 1.4 per hour). In February these values will be adjusted to AR$ 292,446 and AR$ 1,462 respectively. It remains to be seen how much that will represent in US dollars as financial analysts insist that the current parity is artificially kept by the government not lifting the so-called exchange rate stocks.