What could happen this year to career wages against inflation

Real wages have not yet recovered from losses compared to inflation in recent years and this is one of the factors that they divided the government. And the acceleration of rising prices doubting that this recession could be reversed.

The government’s decision that expect and “recalculate” the paritaria were adopted because of the evidence that it was occurring a further decrease in purchasing power of workers, with uncertain results due to sharp price increases, especially basic necessities.

Consulting firm LCG points out that with an inflation floor expected at 70% year-on-year, it is difficult to propose a scenario in which the career wage wins against price increases.

“Right now, with a large portion of the parity closed at an average of 50% per year, even with promises of revision, in most cases they seem to be left behind against increasing nominality ”, they maintained.

Due to the joint calendar (the public sector starts its annual joint venture from January), the public sector wages they had a higher increase in the first three months (18.1%) than those registered privately (14.6%), according to the latest INDEC data.

But the closure of several joint ventures in the private sector in April added to the new amounts signed. about 60% (such as bankers or public employees of Buenos Aires) This will change the numbers between the two sectorsand in relation to inflation.

Unregistered work, in the worst place

Until the end of 2021 and in relation to 2017, the evolution of the salary shows that the most affected are unregistered wagesfollowed by public sector workers and, in third place, private sector wages.

Under the current government, “initially, there was a significant (salary) increase related to the provision of salary increases by command in the first quarter of 2020. These increases became effective after a strong fall in the previous government, “said consultancy firm CIFRA (Information and Training Center of the Argentine Republic).

In the initial impact of the pandemic – he added – took place again a recovery of wages, which was associated not only with the delay in joint negotiations on an inflationary framework, but also with the suspension of workers with wage cuts.

Although after this sudden collapse, real wages are gradually recovering, they had another decline in the second quarter of 2021in a new recessive moment.

“Since July 2021 they have only continued to grow,” the consultant said. And added: “It’s not yet clear that this positive trajectory will continue, that is depends on the outcome of this year’s joint negotiations”.

Anyway, the the balance is lapidary: Compared to 2015, private wages dropped by 16% by the end of 2021. Those in the public sector, 23.6% less and the informal by more than 30%.

“Compared to the maximum of November 2017, the loss of purchasing power is high: 22.4% on average. Not surprisingly, the most affected were informal workers, with a real decrease of 34.4%, while the total number of registered workers was on average 19.4%”, said LCG.

According to CIFRA, “the low relative level of registered salaries associated with the end of the government of Cristina Fernández was repeated for all sectors of activity, although there were differences”.

The average salary of this sector – which includes both public administration and education and health workers at the three levels of government – “has improved. in a more unfavorable way than the private wage during the Cambiemos administration; but the gap widens throughout 2020 and early 2021, “the consultant added.

Only mid -2021 has made a definite relative wage recoveryafter years of systematic decline in purchasing power, CIFRA says.

NE