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In March, wages again lost against inflation: on average, they increased by 4%, while prices rose by 4.7%, according to INDEC data. Thus, in the first quarter of the year, wages increased 10% compared to a rise in prices of 11.8%, which shows a decline of 1.6%. And in the last 12 months, the loss of salaries increased because they had an increase of 37.3% versus an inflation of 54.7%. It is a real wage decline 11.2%.

As it has been happening for several months, unregistered private workers (“in black”) were the most affected. In March, informal salaried workers (“non-registered”) had a wage increase of 2.7% and in 12 months had a nominal increase of only 32.6%. As a result, they lost 14.3% of the salary purchasing power. In addition, on average, informal wage earners earn less than half of those who are registered.

The novelty was that state workers had a monthly increase of 5.5% – higher than inflation – but still in the year-on-year measurement had a nominal improvement of 38.5%, with a real loss of 10.5%. Meanwhile, private workers in the private sector improved their salaries by 3.6% in March – below inflation – and lost 10.7%, because their salaries increased 38.2% year-on-year.

Salaried employees and public, private and registered private homes account for almost 10 million and another 2 million are self-employed and monotributistas. There are another 5 million informal salaried workers and 2 million self-employed registered workers

As a result, the fall in the purchasing power of wages, aggravated by lower employment and higher unemployment explain the sharp decline in household consumption.

On the other hand, based on the companies’ statements, the Ministry of Production and Labor reported that in March the average nominal salary of private wage earners reached $ 41,359 gross, while half of those workers received less than $ 31,093. And that the average real remuneration fell 8.3% year-on-year, while for half of the workers with lower salaries, it fell by 8.9%.

The Government is betting that the salary agreements in the paritarias and a deceleration of the inflation help, in the next months, to reduce the wage losses and the INDEC can lower wage falls in real inferior terms.

However, in the companies they believe that the joint adjustments will increase the salary costs that could lead to price increases or to resign profitability. One case is the increases in prepaid installments for July, August and September. Therefore, the consultants estimate that, even if the next inflationary indexes are lower, end-to-end inflation this year has a floor of 40%.

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