Wage rounds: government wants to negotiate hike of barely over 60% with CGT

Next week, the financial team will contact Argentina’s trade union federation, the General Confederation of Labor (CGT), to start drafting a wage round plan for this year with a hike barely above the 60% projected inflation set in the 2023 budget. Designed by minister Sergio Massa, the government aims to sound out the plan with union and business leaders as part of a larger price reduction program.

The plan will initially aim at the trade unionists closest to the Casa Rosada: specifically, the “heavyweights” of the top service industry unions and the “independents” who have regular contact with all governments, two of the groups that command the central workers union and have a well-oiled connection with Massa. The first wage rounds of the year, where the government will aim to set the new guideline, will involve some of the unions represented by leaders of these sectors, such as the Construction Workers’ Union (UOCRA) or the Union of Civilian State Personnel (UPCN, state workers union) and others that will take place even sooner, with leaders of different political affiliations, such as the school teachers of Ctera or the Banking Association.

Beyond this political negotiation, the economic cabinet must first overcome the challenge of decelerating the rhythm of inflation in the coming weeks, in order to provide support to the potential agreement. Only if that happens will the Labor Ministry, led by Raquel “Kelly” Olmos, be able to translate Massa’s desired number to the wage rounds with the same logic of recent years: in installments, and with the use of non-remunerative sums (extra payments that are exempt from social security) as potential incentives to make it easier for business sectors to sign the agreements.

Sources in the more traditional sectors of the CGT said they trust the Economy Minister’s chances of easing the rise in prices and are willing to sign their wage rounds accordingly. But, they clarified, this will not happen before the end of March, until they see how the basket of basic food prices behaves. Such caution is logical for a country with the inflationary history of Argentina and whose most immediate precedent is that of 2022, which started with Martín Guzmán as Minister of Economy promoting the idea of a 33% price hike, and will end its twelve-month measurement just below 100%, with two more officials having held his job in the meantime.

So far, the 2023 legal precedents regarding wage rounds are almost null. Only the Federation of Oil Makers (Ftciodyara) has signed a 41% increase for the first half of the year, and that value was enough for Daniel Yofra to showcase a new monthly salary base of almost AR$320,000 pesos, which impacts the Argentine average. Meanwhile, La Bancaria (bank workers union) led by Sergio Palazzo will attempt a short negotiation limited to the first quarter of the year, as a bridge to then resume negotiations with the financial sector for the rest of 2023.

In the case of Camioneros (the truck drivers union), whose salary discussion has worked as a beacon for other unions in recent years, the last agreement with transport business employers resulted in a 107% increase, valid until next October. Thus, the union led by Hugo and Pablo Moyano will not have a leading role in the first part of the year’s wage rounds unless there is a pronounced increase in the rate of inflation.

In the meantime, the government will keep administrating salary discussions through pending reviews. The most important case is Commerce, which represents 1.2 million workers and last year agreed to a 59.5% increase and still hasn’t updated the figure to values closer to the accumulated inflation numbers. Up to the last week of 2022, the union led by Armando Cavalieri had not given further details on the status of the negotiations with the business chambers despite having resumed contacts in November.

Originally published in Ambito.com / Translated by Agustín Mango


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