salary vs. inflation: how is the race so far this year

The triggering of inflation has deteriorated the purchasing power of formal wages. In July, the latest data available, on average wages recorded, with contributions to the Social Security, increased by 5.3% against an inflation of 7.4%. A loss in the month of 2%.

In the first 7 months of this year, formal wages accumulate an increase of 45.1% against an inflation of 46.2%. And compared to a year ago, the loss is 2.4 points because wages increased by 68.6% and inflation was 71%.

The salary figure is official and corresponds to the RIPTE (Taxable Remuneration of Stable Workers), whose monthly series begins in July 1994.

The RIPTE is calculated on the basis of the average salary subject to contributions to the Argentine Integrated Social Security System (SIPA) received by employees in a dependent relationship and which have been declared continuously in the last 13 months.

As of July, gross salary (without discounts) with contributions have an average of $ 148,811.85, according to official data based on the amounts declared by the companies to the Social Security. A year ago, it was $ 88,274.02.

Since it is the gross salary, to determine living income, at $ 148,811.85, the worker’s pension and health contribution (17%) should be deducted and eventually the family salary per child should be added.

According to the Government, accounting salaries “had lost 21.6% of their real value between December 2015 and December 2019”, as the basis of decree 578/2022 states and in 2020/2021, with ups and downs, accompanied the inflation, but there was no recovery compared to the end of 2019, as it had been an official promise.

Overall, the Employees in dependency relationships with the contributions to ANSeS they are added about 7.5 million, about 75% of the nearly 10 million employees in a registered dependency relationship. The rest contributes to the provincial savings banks or other schemes.

These 10 million, in turn, represent half of all formal and informal jobs of the country (single-tax, self-employed, salaried without pension reduction and informal self-employed workers).

As a wage index, the RIPTE is used every three months (March, June, September, December) to fix half the mobility percentage of the pensions, pensions and other social benefits and in the calculation of compensation for accidents at work.

It is also used to update the minimum non-taxable income tax annually and to update the “floor” salary, initially by $ 150,000 and now by $ 280,792 to be exempt from paying that tax.

It is also used to update the family income ceiling once a year to collect family allowances. And every month the amount paid by employers to the sickness fund for COVID insurance.

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