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ECONOMY | 03-04-2021 08:43

Wages continue to lose out to inflation, pushing poverty up

Salaries rose 29.6% in 12 months up until February, while prices rose 38.5 percent over the same period.

With inflation a general worry, salaries are losing the wage-price race, pushing poverty levels even higher in Argentina. 

Through to February wages had risen by 29.6 percent in the preceding 12 months while prices increased 38.5 percent in the same period, according to a new report from the INDEC national statistics bureau, which revealed this week that poverty had risen to 42 percent in the second half of 2020. 

With March inflation reportedly topping four percent, according to Economy Ministry sources, real wages face further difficulties in the coming months.

The government had promised the CGT labour umbrella grouping an improvement of real wages if they would keep their collective bargaining demands just a few points above the 29 percent annual inflation forecast by the Economy Ministry. But if this promise is not kept, the trade unions have already served notice that they will be revising all wage agreements. 

The scenario threatens to worsen a fall in real wages for three straight years between 2018 and 2020 with this year bringing a slight recovery, according to the presidential promise.

In January wages rose 3.3 percent on average as against four percent inflation. 

According to Labour Ministry data, the RIPTE (Remuneración Imponible de Trabajadores Estables or the taxable remuneration of the formally employed) averaged gross earnings of 68,100.73 pesos in January, as against 53,070.21 pesos 12 months previously.

Accelerating inflation in recent months has deepened the fall in real wages with the RIPTE rising 5.2 percent between November and January while inflation in those three months rose 11.6 percent while the family shopping-basket for food rose 14.6 percent.

The RIPTE serves as one of the benchmarks defining the increase for pensions and social welfare benefits every quarter, as well as the income tax floor (in the process of being upped to 150,000 pesos now only requiring Senate approval, expected in the next few days).  

– TIMES/NA

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