Wage rounds: government confirms a +60% raise, doubts among trade unions

“Kelly” Olmos confirmed this aims to “decelerate the nominal rate”. Opposition among top CGT leaders.

by Buenos Aires Herald
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The government confirmed yesterday that they will push for a wage hike barely above 60%, in line with the inflation rate stipulated in the budget, despite persistent doubts among trade unions about the economic team’s ability to slow down the rising prices in an election year.

Labor Minister Raquel “Kelly” Olmos confirmed this after a series of conversations between government officials and top leaders of the CGT (General Workers’ Union). 

“What we are doing this year, under the primary responsibility of the Economy Minister (Sergio Massa), is talking with different stakeholders about the need to converge in a deceleration of nominal and inflation rates,” said the minister to radio station AM750. She also confirmed it’s a path to coincide with the budget-stipulated inflation plus “some extra points of recovery for purchasing power”, as Ámbito reported on January 5. 

The first allies for this plan are the “heavyweights” of the CGT’s biggest service industry unions and their “independent” colleagues who maintain constructive dialogue with all  governments. Both sectors, which include Héctor Daer (Healthcare) and Andrés Rodriguez (state workers in the UPCN union) among others, are the main union support for Massa and his potential presidential goal. That is why, even if they don’t have much confidence in the fact that accepting the 60% increase would decelerate inflation, they would be the first to publicly support the initiative. 

In contrast, last night Pablo Moyano gave advance warning that he would reject the potential establishment of a wage hike rate such as the one the government is proposing: “I talked about it with some of the ministers. The CGT doesn’t dictate wage adjustments, which are free. And I don’t particularly agree with it,” he warned. The position of the CGT co-head and number two of the Truckers union is a warning sign for the Economy Ministry’s plan despite the fact that his union won’t have to engage in wage rounds until next October.  

Along the same line as Moyano, last night Gerardo Matínez, head of the Construction Workers’ Union (UOCRA), also raised concerns. “Wage rounds are free and sovereign for each sector’s agreement. The CGT does not accept any upper limit or intrusion of politics to use wages as variables for economic adjustments,” he warned. He is a figure of reference for the “independents” and a Massa supporter, despite his reluctance to establish hike rates for this year.    

The implementation of the salary guideline this year will have differential characteristics from previous periods: for example, the beginning of the round of negotiations for the first tranche of 2023 will match the reopenings and revisions provided in the 2022 agreements, which registered a record number of wage rounds due to the inflationary spiral. In other words, while the Government will focus its attention on starting discussions with unions such as teachers or the Banking Association (which are usually the first of the year), conversation will be also held with unions that have more affiliates, such as Commerce, which in 2022 only agreed to increases of 59.5% and plans to review it starting today.

Confirmation of the official plan also coincided with the release of the 5.1% inflation rate for December, which is above the expectations of Massa himself and raises more doubts among union and business leaders about the feasibility of lowering prices. In private, union leaders who will show public support for the initiative clarified that they will do so with the guarantee that their agreements can be reopened at any time, as unions with greater bargaining power have agreed in previous years.

CGT leaders, in any case, recognize that there is a consensus around, at a minimum, showing support for Massa’s plan. The minister told them that with their support at hand he will speed up agreements with the business community to make sure they hold key prices in the economy. The tools the minister will display include the stream of dollars for sectors that require imported inputs, and he will seek to convince employers in general with a foreseeable horizon in dollar values, interest rates and utility prices, in addition to the salary element.

Author: Mariano Martin / Originally published in Ambito.com / Translated by Agustín Mango

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