More than ever in three decades private sector wages have declined in Argentina, following the devaluation of President Javier Millay’s currency, according to a Bloomberg report citing a new government report published in March 2024. According to the report Argentina’s wages fell by 11% in December compared to November, when adjusted for inflation, the largest monthly loss of income since government labour market reports began 29 years ago. The government stated that the reduction, although partially offset by a wage increase in January, led to a “significant fall” of consumer purchasing power. The figures help explain why the spending of small businesses has been reduced twice every month since Millay took office on 10 December. Although markets and economists consider his quick policy changes to be delayed, Argentina’s strong labor movement resists. An important syndicate representing government employees plans to strike Tuesday, after rejecting what he called a “unacceptable” wage increase by the Millay government. While Millay still enjoys relatively high acceptance rates inside and the applause of investors abroad, his shock treatment, including peso underestimation by 54% in December, is expected to send Argentina deeper into recession this year and make it more difficult to pass its major reforms through an already hostile Congress. Economists from Argentina’s central bank in February expect gross domestic product to shrink by 3.5% this year.
Argentina: Reductions in private sector wages in December
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