The purchasing power of the minimum wage collapsed in December and aggravated the loss which has emerged in recent years.
There is the minimum wage $156,000 and there is not yet a certain date for the convening of the Council that decides on the increases, composed of the Nation, union and employer representatives.
In the face of inflation 25.5% in December and with a similar number expected in January, the delay in the minimum wage is marked. By way of example, the economist Jorge Gabriel Barreto calculated that the To buy 87 kilos of bread, 156,000 dollars are enough.
In January 2023 the minimum wage was $65,427 and it costs per kilo of bread $480which implies that A year ago, 136 kilos could be purchased, 63% more than today, when the kilo is about $1,800.
“If we take the value of the average kilo of bread from 2000 to today and measure it against the minimum wage, we see that historically the current This is the smallest amount of kilos that can be purchased per month in 23 years“, reinforces Barreto
Since 2000, it has been the year the minimum wage has had the most purchasing power in 2006 with 320 kilos. Until last month, the worst year had been 2001, where there was quite a bit 138 kilos.
In 24 years, The kilo of bread increased by 128.471%: it went from 1.40 dollars to 1,800 dollars.
During the same period the minimum wage increased 77,900%: went from $200 or US$200 to $156,000which measured in blue dollars is approximately 138 US dollars.
“With these figures, the loss of purchasing power over the period, measured in kilos of bread, is equal to 40%”, underlines Barreto.
Between 2016 and 2023, inflation was 4,848.24% and the minimum wage increased 2,474.26% from $6,060 in January 2016 to $156,000.
“If we consider the last two presidencies – that of Mauricio Macri ended with an inflation of 298% and that of Alberto Fernández with a cumulative inflation of 1,144.5% – the loss of purchasing power of the minimum wage is -48%”, point. “In practical terms it’s like saying this Today I can buy half of what I bought 8 years ago.”
Salary vs. basket
Another indicator that allows us to perceive the worsening of the minimum wage is its relationship with the total basic basket, which measures the poverty threshold for a family of four. With the December data that basket has been reached $495,798, a 225% jump on the year. AS, 3.2 Minimum wages are needed to cover this.
In 2006, the minimum wage covered 70% of the basket and by 2016 this percentage had dropped to 54%.
There is little chance that the situation will improve this year. “With inflation expected throughout 2024 at around 200%, at least in the short term, “The purchasing power of the minimum wage cannot be expected to recover and is expected to decline further by between 10% and 20%.” Barreto underlines.
The minimum wage is crucial because it serves as a threshold not only for formal jobs but also indirectly for informal jobs. Furthermore, it is a reference for social plans, such as Potenciar Trabajo, whose beneficiaries earn half the minimum wage.
“The recomposition during 2024 will only be nominal and by 2025 the recovery of real wages will depend on three fundamental factors: economic growth, slowing inflation and poverty behaviour“says Barreto.
Source: Clarin
