Economic plan has drained salaries more than official data shows

Economic policies under President Javier Milei have resulted in a significant decline in wages across both public and private sectors, according to estimates by the Center for Research and Training of the Argentine Republic (CIFRA) and the Argentine Workers’ Central Union (CTA). While official figures show an 8.2% fall in wages since November 2023, with a 1.1% recovery over the past three months, CIFRA's alternative consumer price index (IPC) suggests a more alarming 13% real loss between November 2023 and June 2026.

This discrepancy is attributed to an 8.5% decrease in private-sector wages and a staggering 20.8% drop in public-sector wages. CIFRA researchers express disappointment, stating, "This is a very meager result."

The use of the term "alternative" IPC is due to a discrepancy in the inflation measurement methodology. INDEC's current weighting framework for goods and services dates back to 2004, failing to reflect modern consumption patterns. This issue was prioritized, but the government delayed implementation until after the disinflationary process, despite previous plans and IMF recommendations.

State wages have been particularly hard hit, with public-sector salaries experiencing a 40.2% loss in purchasing power since December 2023, compared to a 14.3% decrease in provincial public-sector wages. Real collectively bargained wages have also declined, though they briefly rebounded post-inflation spike in December 2023 before entering a steady decline due to the government's policy of capping collective bargaining agreements.

Perhaps most alarming is the collapse in minimum wages, which has fallen nearly 41% using the alternative IPC. When measured by the official IPC, purchasing power has dropped 60% from 2015 levels and 20% below 1990s standards. The labor ministry is blamed for this decline, as it has imposed nominal increases aligned with business proposals rather than negotiated wages, according to CIFRA experts.