Worker bonuses: UIA will ‘protest but pay’

The UIA manufacturing industry federation’s president said the organization does not agree with the extraordinary bonuses established by the government, but will pay them

The Argentine Industrial Union (UIA, by its Spanish initials) will pay its workers the two AR$30,000 bonuses mandated by the government. Despite the unease the measure has caused in the business world, UIA President Daniel Funes de Rioja said on Sunday that his manufacturing industry federation would “protest, but pay”.

He was speaking at a celebration for the Day of Industry in Entre Ríos province, which was also attended by Economy Minister Sergio Massa. There were tense exchanges over price agreements, the demand for fresh wage negotiations, and the sector’s requests for after the next President is inaugurated on December 10.

On August 27, Massa announced that formally employed workers with monthly salaries of up to AR$400,000 will receive AR$60,000. The bonus is currently worth US$171 at the official exchange rate and US$89.50 at the MEP dollar rate. The sum can be absorbed by future negotiated wage rises.

To be paid half-half in September and October, the bonus was one of a raft of measures aimed at protecting Argentines from the economic impacts of the 22% currency devaluation the government announced on August 14, the day after the primary elections.

The government’s measure soon came up against a series of hurdles from both its own side and the opposition. A group of governors and mayors aligned with Unión por la Patria has yet to comment for or against the measure. Various business chambers have emphatically rejected the payment, arguing that all recomposition of salaries should come as part of wage negotiations.

The bonus is worth around US$80 at the CCL dollar rate, which the chief executive of a multinational told the Herald’s sister title Ámbito that it uses to calculate annual profits. According to the Research and Training Center of the Argentine Republic (CIFRA, by its Spanish initials), for medium and large businesses overall the measure will require around AR$218 billion, which is “equivalent to a 1.2% transfer of work income to capital in recent years.”

Government sources said they believe the heart of the dispute lies elsewhere. They see a power struggle at a moment of uncertainty when everything seems to be up for debate. Always diplomatic, Funes de Rioja broke bread with Massa at the Day of Industry in Entre Ríos and took the confrontation down a gear.

“Those who watched Titans in the ring thought the differences meant confrontations, but our vocation is to find the path for industry,” he said.

He also rejected the idea of rebellion that some business leaders put forward throughout the day. “We do not agree with the fixed sum, but the UIA respects it because we believe in the order of the law,” he said, although he confirmed that “the way forward for salary discussions is via wage negotiations.”

Massa often talks with Funes de Rioja, a labor lawyer who also represents the large food companies represented by the federation COPAL. Despite the resistance to joining the Precios Justos price agreement scheme, its members have been shuffling through the offices of the Commerce Secretariat to confirm their participation in the government’s plan, which aims to put a 5% cap on price increases for the most sensitive items for consumers’ pockets. 

Prices and salaries are the two variables the government has been monitoring seven weeks out from the general elections. Despite price freezes for some areas, such as transport and private healthcare, consultants estimate a high degree of transfer from the devaluation to prices, and expect double-digit inflation for August or September. The Labor Ministry calculates that the AR$30,000 bonus will lift salaries by around 10%. However, it cannot be sure to compensate for the latest surge in inflation.

Originally published in Á / Translation by Amy Booth


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