The government announced bonuses for informal workers and unemployment beneficiaries on Tuesday in a bid to compensate for the 22% devaluation of the peso in August. 

Informal workers will receive two installments of AR$47,000 each (US$134.4 at the official exchange rate, US$68.5 at the MEP rate) in September and October. For those collecting unemployment benefits, the government will pay two bonuses of AR$10,000 (US$28.6 at the official exchange rate, US$14.6 at the MEP rate) in September and October. 

Economy Minister and presidential candidate Sergio Massa announced the bonus for informal workers in a press conference with the head of the National Social Security Administration (ANSES, by its Spanish initials), Fernanda Raverta. 

“The International Monetary Fund (IMF)’s decision to impose a devaluation on Argentina generated loss of purchasing power and economic suffering in huge sectors of our society,” Massa said. The government carried out a devaluation that took the official exchange rate to AR$350 on August 14 following protracted negotiations between the lender and the Argentine government. 

August’s monthly inflation rate, the first official price index to reflect the measure, was 12.4% — a 32-year high.

With the general elections less than a month away, Massa and Raverta started their conference by providing a list of compensatory measures implemented after the devaluation — including VAT refunds, bonuses for retirees and workers, and raising the income tax threshold.

“We had a segment of the population that was not covered by any of the measures,” Massa said. He went on to define informal workers as those who are self-employed or have odd jobs but do not have any registered income, nor receive any economic assistance from the state. The measure will reach 2.8 million people, according to the ministry’s estimates.

The minister added that, in order to finance the measure, the government is going to bring forward income tax payments for what he called “the big winners of the IMF-imposed devaluation” — banks, financial institutions, and insurance companies. 

The resolution for the unemployment bonus, signed by Labor Minister Raquel “Kelly” Olmos, mentioned the “acceleration of price increases” as one of the reasons behind the measure. Those who already collect unemployment benefits will get the bonus automatically on their accounts, while informal workers have to sign up on the ANSES website.

Unemployment, recession and poverty

Unemployment reached 6.2% in the second quarter of 2023, according to a report by the National Institute for Statistics and Census (INDEC) released last week. It was the lowest percentage since 2016 but, according to a report by the Ecolatina consulting firm, this came at a cost — poor working conditions and salaries. In fact, “polyworking” (having multiple jobs instead of a single full-time occupation) reaches 10% of the economically active population and the INDEC unemployment report showed signs of heightened pressure on the job market.

On Tuesday, the INDEC published July’s Monthly Estimate of Economic Activity (EMAE, by its Spanish initials). It decreased by 1.3% compared to the same period in 2022 and 2023’s budget forecasts a 2.5% decrease in the GDP for this year, indicating an even deeper recession.

The INDEC will publish poverty figures for the first semester of the year on Wednesday, which are expected to reflect the fall in economic activity.