The Argentine minimum wage (SMVM, according to its acronym in Spanish) has been a historic reference point for salary negotiations in the country in the formal as well as the informal sector.

That benchmark, however, has changed drastically since President Javier Milei took office in December 2023. Since then, the SMVM has experienced a steady decline in purchasing power and is currently at its lowest level since the 1990s.

According to estimates by the Center for Studies on Education in the Argentine Republic (CIFRA), affiliated with the Argentine Workers’ Central Union (CTA), the minimum wage has seen a cumulative decline of more than 40% in purchasing power since the libertarian government took office.

“The severe impact of inflation in the first few months [of the Milei administration] caused an initial 30% decline that was not reversed; on the contrary, consecutive monthly contractions have been recorded for the past two years,” the study noted.

With a nominal value of AR$367,800 (US$243.5 at the official exchange rate), minimum wage purchasing power is currently 60% lower than in 2015 and 20% below the levels of the 1990s.

“To directly gauge the magnitude of this decline, it is worth noting that if minimum wage had kept pace with inflation since 2015 without losing purchasing power, it would stand at around AR$955,000 [US$632.40] today,” CIFRA noted.

Minimum wage under the Milei administration

The SMVM is set by the National Minimum Wage Council, a tripartite body composed of representatives from labor unions, businesses, and the government.

The CIFRA report, however, states that under Milei, the body began to function in an “unusual manner” that left it “blurred and stripped of substance.”

In the absence of agreements, all increases were set by the labor ministry. This resulted in figures “aligned with business proposals that effectively endorsed the loss of purchasing power.”

In addition, the intervals between the council’s most recent meetings grew increasingly longer, “leaving months without updates and resulting in a minimum wage that was revised less frequently.” 

Year-to-year inflation, meanwhile, remains above 30%.

Drop in consumption and consumer trust

This decline in purchasing power is reflected in the difficulty domestic consumption — one of the pillars of the Argentine economy — has in making a sustained recovery.

According to the latest official data from INDEC, supermarket sales rose 0.9% month-over-month in May but remain 0.7% below the level seen in May of last year. In the first four months of 2026, the decline stands at 2.8%.

A similar situation was observed in sales at wholesale supermarkets — a proxy for sales levels at small retail businesses. Although they rose 2.3% month-over-month, they fell 2.3% year-over-year, while the year-to-date figure shows a 3% decline.

Another indicator reflecting this stagnation is the Consumer Confidence Index (CCI) published by Torcuato Di Tella University (UTDT). The CCI stood at 40.67 points in July, representing a monthly decrease of 4.78% and a 12.30% drop compared to July 2025.