Although President Javier Milei had stated only a few days ago that the government would not set the minimum wage, Economy Minister Luis Caputo announced that The Government will increase the Living and Moving Minimum Wage (SMVM) from $156,000 in December, to $180,000 in February and to $202,000 in March. In relation to estimated inflation, this would be the worsening of the SMVM in just 3 months more than 20%.
Is that in relation to December, The minimum wage increase in March would be 30%, well below inflation, worsening the deterioration of recent years.
In 2023 the minimum wage had an increase of 151.8% compared to inflation of 211.4%. A loss of 19%.
With inflation at 20.6% in January, estimated at 18% in February and the same thing in March, in those 3 months accumulated inflation would be around 68%. So the increase in SMVM would represent less than half of inflation in the quarter. A drop of 22%.
What is the minimum wage today in Argentina
The living and moving minimum wage of December was $156,000 for those paid monthly or $780 per hour. In December 2022 it was $61,953 monthly or $309.77 per hour.
It is more than evident that those who receive the SMVM, in addition to the possible collection of the family salary per child, find it impossible to cover all the requirements established by the Law on employment contracts when In January the poverty basket for a typical family was just over $596,823.18, without calculating rent, according to INDEC. In March it could rise to $800,000
According to CIFRA (Research and Training Center of the Argentine Republic), the purchasing power of the minimum, living and mobile wage shows a negative trend since 2011, which was particularly strong in the last two years of the Mauricio Macri government and in 2020 with the Alberto Fernández government. ““This decline was even greater than the actual loss in recorded wages.”He says.
Then, “between 2021 and 2022, in a context of rising inflation, seven updates to the minimum wage occurred, which did not achieve a recovery of its purchasing power. The year 2022 ended with an average decline in the real minimum wage of 1.3%, which placed it 33% below the 2015 level.” With the loss in 2023 the drop is 45%. And with the decline in the first quarter of 2024 the loss would be around 50%.
The law on labor contracts attributes three characteristics to the minimum, living and mobile wage. It is the lowest salary that the worker without family responsibilities must receive in cash for his working day. It must ensure adequate food, decent housing, education, clothing, healthcare, transportation, recreation, holidays and pension coverage. AND must be adjusted periodically based on changes in the cost of living.
Source: Clarin
