With high levels of runaway inflation and poverty, job search is no longer enough to restore purchasing power and consumption. The good news of the drop in unemployment at the end of last year was overshadowed by the drop in real wages, Despite economic growth, it has still not recovered.

Consulting firm Ecolatina opened the warning lights by explaining that although the economy is already heading towards its levels in 2017 next year, due to population growth, GDP per capita in 2023 will continue to will be below the previous peak. And the center of this backwardness is the decline in purchasing power.

In 2021, economic activity rose by 10.3% after the collapse of the pandemic and incarceration. For this year, forecasts range from a 0.5% contraction to a 3.5% expansion.

In 2021 the felt the economic recovery at work. Unemployment dropped from 11% to 7% at the end of last year and thus unemployment returned to the level of six years ago.

At the same time, poverty went from 42% to 37.3%, and far from the 27.2% it averaged in 2017. According to INDEC, half of the country’s households live in monthly income of less than $ 79,000.

in 2021 the real salary is almost 20% lower than in 2017. “It’s not expected to recover significantly this year or next: we expect it to close in 2023 an average deterioration of 16.5% compared to 2017“, said Ecolatina.

The consultant’s projection is that in the six years from 2017 to 2023 the number of formal workers will increase by almost 5%, almost at the same rate of population growth. “It suggests that in these years we will have a greater number of workers, but with lower wages in real terms“.

More work, but it’s not enough to improve profits. The value of this gap between rising employment and falling real wages will be paid for by poverty. “We are anticipating high inflation hinder poverty reduction from current levels over the next two years, ”Ecolatina said.

Also from CIFRA, the study center linked to the CTA, they said real wage recovery was weak despite the reduction in unemployment.

CIFRA reported that the decline in the average annual salary of registered workers in the private sector will be 2.3% in 2021, while unregistered workers will be 7.1%.

“The outlook is negative if we consider the acceleration of the inflation process in February (4.7%) and March (6.7%), respectively. Under these scenarios, the regressive trend in revenue distribution that began in 2018 is emphasized.

A decade of stagnation

Economist Andrés Borenstein breaks down the reasons why more work does not translate into better real wages and less poverty.. “Argentina has been stagnant for more than a decade. GDP per capita is growing at negative rates. That indicates that productivity is negative and therefore wages are down. “

On the other hand, Borenstein also points out that “there is low investment and the entrepreneur is moving in a work-intensive mix up to a certain point. So despite the stagnation, the job is not bad, but it is not well paid“.

This situation of low unemployment and low wages is leading the world of work to rearrange between those who increase productivity and those who do not.

“Growing ones are public jobs and informals are less productive. On the other hand, those with high productivity are the workers who now have the greatest risk of emigrating or working from here to another country. the whole world of software, design, research falls into that category, ”Borenstein said.

Going forward there are some symptoms of relief. “I find it hard to be optimistic for 2022 and 2023. For 2024 and beyond it will depend on who wins the presidential elections, how they win and whether the program they do builds credibility to change history. Meaning, if society is tolerant of an environment that does not develop overnight no matter how good the next government is, “he concluded.

AQ