MercoPress. South Atlantic News Agency

Argentines faring worse off under Milei

Average salaries are not enough to purchase one basic food basket and Argentines are looking for second jobs to make ends meet

Despite the apparent success of Argentine President Javier administration's policies to curb inflation, various reports last week showed plummetting figures regarding economic activity and welfare. To fight growing retail prices, the Libertarian Government authorized imports of yerba mate, dairy products, meat, rice, and even sugar.

 The Chamber of Industry and Commerce of Meat and Meat Products of the Argentine Republic (Ciccra) said beef consumption went down by 9.3% interannually last month from 49.2 kilos/year to 44.6 kilos per inhabitant. In the first two months of 2024, beef consumption contracted 8.2% year-on-year.

“This has to do with the first months of last year, where consumption increased because the price of meat did not vary and the price of steer in the MAG [Mercado Agroganadero de Cañuelas] increased by 10%. Although we do not see such a strong drop in consumption, this will probably start to be noticed after March. Certainly, there will not be any explosion in the price or in the lack of cattle,” Ciccra head Miguel Schiariti said.

Another cause for the drop in beef consumption was the relatively lower price of pork which rose only 2.2% at a time when beef went up 4.2% and chicken 5.4% in February 2024, according to the Institute for the Promotion of Argentine Beef (Ipcva).

To make matters worse, the average income of formal workers in Argentina is already below the poverty line as a result of the ballooning inflation.

According to the National Institute of Statistics and Census (Indec), the Total Basic Food Basket (CBT) cost AR$ 596,823 in January while the Secretariat of Labor, Employment and Social Security reported that the Average Taxable Remuneration of Stable Workers (Ripte) amounted to AR$ 555,269, which would prove that stable formal employees already have, on average, their incomes below one CBT and, therefore, are below the poverty line. In this scenario, almost three million people who have a formal job are actively looking for another one to make ends meet.

Although wages have lagged behind inflation for several years, this is the first time they have fallen behind the CBT line since Indec resumed measuring the CBT in April 2016. Historically, wages have always been above the CBT, although on some occasions the gap was relatively short. Today, the gap is 7.48%, but with the CBT above wages. A year ago, average salaries were enough to purchase 1.23 CBTs.

Given this situation, President Milei and Economy Minister Luis Toto Caputo decided to postpone fare increases on public transport and cooking gas in the Buenos Aires Metropolitan Area (AMBA) to achieve inflation within single-digit figures inflation in March after February's 13.2%.