With 7% increase in December, Minimum, Living and Mobile Wage (SMVM) will stack up this year a 93.6% increaseabout 5 or 6 points below the expected price increase for the end of the year (98/100%).
With these numbers, in the last seven years, the SMVM will have lost 33% or a third of its purchasing power against inflation.
While, if at the end of 2015 the minimum wage represented 60% of the value of the basket household poverty, as of October this year (latest official data) dropped to 39% and would close the year at 40%.
Official data shows that during Mauricio Macri’s administration, the minimum wage rose from $5,588 in December 2015 to $16,875 in the same month of 2019—a 202 percent increase. Inflation in those 4 years was 299.2%. This resulted a loss of purchasing power of 24.4%.greater than the decline in real wages for all workers.
As for the value of the household poverty basket, in those years it dropped from 60% to 45%.
Alberto Fernández assumed the presidency with the SMVM for $16,875. In 2020, there was a 10.4% loss because the minimum wage increased to $20,587.50, a 22% increase over inflation of 36.1%.
In 2021, it increased to $32,000 (December of that year), a 55.4% increase versus 50.9% inflation. An improvement of 3%.
This year, the increase will be 93.6% ($61,953 in December 2022 versus $32,000 in December 2021) compared to an estimated 98-100% inflation. A probable 5% loss.
For its part, the household poverty basket was $139,737 in October of this year (latest official data). And the SMVM of $54,550 was 39%. With the increase in the value of the SMVM in the months of November and December and the probable evolution of the basket in those two months, the year would close at 40% in the best case, around 20 points below the value of 7 years ago.
For 2023, in the first quarter the SMVM will have an increase of 13.04% compared to the November value or 12.2% compared to December 2022. This means that inflation would have to be at 4% per month in order not to exceed the SMVM value for the first quarter.
Charles Arterburn is a seasoned business journalist for News Rebeat, where he provides comprehensive coverage of the latest trends and developments in the world of finance and economics.