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Minimum Wage: the increase announced by Luis Caputo for February 2024 starts with a loss of 20% against inflation

2024-02-20T12:32:53.399Z

Highlights: The minimum wage in Argentina will rise to $202,000 in March 2024. In relation to estimated inflation, the deterioration of the SMVM in just 3 months would be more than 20%. The purchasing power of the minimum, vital and mobile wage has shown a negative trend since 2011. The poverty basket for a typical family was little more in January. of $596,823.18, without computing rent, according to INDEC. The Minimum Living and Mobile Wage for December was $156,000 for those paid monthly or $780 per hour. The Employment Contract Law assigns three characteristics to the minimum wage.


The SMVM today is $156,000 and will rise to $180,000 in February and $202,000 in March, as anticipated by the minister.


Although President Javier Milei said just a few days ago that the Government would not set the minimum wage, the Minister of Economy, Luis Caputo announced that

the Government will increase the minimum, vital and mobile wage (SMVM) from the $156,000 that was in December, to $180,000 in February and to $202,000 in March.

In relation to estimated inflation, the deterioration of the SMVM in just 3 months would be

more than 20%.

The thing is that in relation to December,

the increase in the minimum wage to March would be 30%,

well below inflation, deepening the deterioration of recent years.

In 2023, the minimum wage had an increase of 151.8% compared to an inflation of 211.4%.

A loss of 19%.

With 20.6% inflation in January, an estimated 18% in February and the same in March, in those 3 months

the accumulated inflation would be around 68%

.

Thus, the increase in the SMVM would represent

less than half

of the quarter's inflation.

A decline of 22%.

How much is the minimum wage today in Argentina

The Minimum Living and Mobile Wage for

December was $156,000

for those paid monthly or $780 per hour.

In December 2022 it was $61,953 monthly or $309.77 per hour.

It is more than evident that those who receive the SMVM, plus the eventual collection of the family salary per child, find it impossible to cover all the requirements established by the Employment Contract Law when

the poverty basket for a typical family was little more in January. of $596,823.18

, without computing rent, according to INDEC.

In March, it could rise to $800,000

According to CIFRA (Research and Training Center of the Argentine Republic), the purchasing power of the minimum, vital and mobile wage has shown a

negative trend since 2011

, which was particularly strong in the last two years of Mauricio Macri's government as well as in 2020. with the government of Alberto Fernández.

"

This drop was even greater than the actual loss of recorded wages

," he says.

Then, “between 2021 and 2022, in a context of growing inflation, there were seven instances of updating the minimum wage, which did not achieve a recovery of its purchasing power.

The year 2022 closed with an average drop in the real minimum wage of 1.3%, which placed it 33% below the 2015 level.”

With the loss of 2023, the drop is 45%.

And with the decline in the first quarter of 2024, the loss would be around 50%.

The Employment Contract Law assigns three characteristics to the minimum wage, vital and mobile.

It is the lowest remuneration that the worker without family responsibilities must receive in cash for his working day.

It must ensure adequate food, decent housing, education, clothing, health care, transportation, recreation, vacations and pension coverage.

And

it must be adjusted periodically

according to variations in the cost of living.

NE

Source: clarin

All business articles on 2024-02-20

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