Government rolls back minimum wage hike

The decision came as a response to the CGT’s nationwide strike scheduled for January 24

The government decided against convening a meeting of the Wage Council. This comes as a response to tension with the General Confederation of Labor (CGT) and other trade unions and social organizations that have scheduled a nationwide strike for January 24 to protest the administration’s economic legislation package.   

The income base has been AR$156,000 since December, and the inflation rate in that month alone, when the minimum wage was last increased by 8.5%, was 25.5 percent. The most critical economic variable calculated on the minimum wage figure is social aid programs for more than 1.2 million beneficiaries, which is automatically adjusted and affects retirement benefits and unemployment insurance.

The call to have the Council of Labor, Productivity, and the Minimum, Vital, and Mobile Salary meet in January was one of the first things the government confirmed. The Labor Secretary himself, Omar Yasín, had said the debate between unions and business leaders would take place between January 20 and 30. 

His forecast, of course, had been made before the CGT declared a 12-hour strike for January 24, with the support of the two factions of the CTA (Argentine Workers Central) and most of the social movements to carry out that measure and a march to Congress.

The salary base was one of the institutions the late former president Néstor Kirchner reactivated during his presidency (2003-2007) and has never been discontinued. At that time, it was a key parameter for other wage negotiations and, to a lesser extent, for its direct impact on a portion of workers not governed by collective agreements.

This last figure became increasingly meager as formal salaries grew above the minimum, and the minimum wage’s greater incidence became the value of social aid plans. Currently, the beneficiaries of the Potenciar Trabajo plan earn AR$78,000 pesos, half of minimum wage.

The paradox is that the Wage Council has 32 members, divided equally between representatives of labor confederations (most of them from CGT, and some seats for the two CTAs) and employers’ chambers (commerce, industry, construction, banking, SMEs and stock market) that decide the value of an index that their constituents either won’t get or won’t pay. It’s only the state, which usually acts as an arbitrator, that actually pays the minimum wage. Also, because it guarantees the base of retirement benefits and adjusts the value of unemployment insurance.

CGT Co-Secretary General Héctor Daer took advantage of his participation in Congress on Monday during the DNU debate to demand the Wage Council be “urgently called upon.” During the previous administration, the workers’ confederation quietly raised the importance of detaching social aid plans from the Council in order to avoid debates about different interests getting mixed up.

Then President Alberto Fernández considered this but ruled it out due to pressure from road-blocking organizations, which use labor unions’ wage negotiations to obtain updates on social aid plans. At least, this was the case until last year.

According to government figures, the minimum wage experienced a 124% increase between April (the first of the three calls for that period) and December of 2023, against a variation of 156% in the basic goods basket. The net loss of people’s purchasing power is attributable to Alberto Fernández’s administration. Since the arrival of the new administration, they have lost 15% of purchasing power in December alone. In the long-term series, you have to go back to before 2004 (prior to the reactivation of the Wage Council) to find a base income that is lower than the current one.

Originally published in / Translated by Agustín Mango


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