Argentina to raise minimum wage by 33%; but still falls below projected inflation of 45%.
The Argentine National Wage Council agreed yesterday to increase the minimum wage by 33% by January 2017. The current minimum wage of 6,060 pesos ($430) for up to 200 hours of work a month will be raised to 6,810 pesos in June, 7,560 pesos in September, and 8,060 pesos by next January.
The National Wage Council, established by former President Néstor Kirchner in 2004, is made up of representatives from the Labor Ministry, as well as leading business councils and labor federations.
The current agreement will help keep Argentina's minimum wage as the highest in Latin America in dollar terms: a projected $571 a month (compared to $367 in Chile, $353 in Uruguay, $253 in Brazil, and $100 in Mexico).
The increase nevertheless falls below an annual inflation rate projected to reach 45% by October, which would represent an 8% loss in purchasing power for the estimated 200,000 full-time minimum wage workers. Up to 5 million part-time and unregistered workers who are believed to earn the minimum or less are also impacted, since the legal minimum is known to serve as a guideline for their wages as well.
The Wage Council decision prompted harsh criticism from leaders of the CTA labor federation, which voted against the increase offer at the Pink House meeting. Its leaders, Hugo Yasky and Pablo Micheli, have asked for a 9,000-peso minimum effective next month (rather than by January, and in installments).
“We can’t set a minimum wage close to 8,000 pesos when the basic budget for a family is now at 16,000 pesos,” Micheli said. “The increase will be out of date in January as all forecasts say that inflation this year will be over 40%. It means losing purchasing power.”
President Mauricio Macri, who had initially backed a raise of 20 to 25%, defended the agreement. “We know we are going through a difficult transition,” he conceded to business and union leaders at the meeting. “But people have hope in us. The less you need of the government to reach wage increases, the better. It will mean Argentina is getting back on the right track.”
President Macri also pointed to a sharp increase in unemployment insurance benefits from 400 to 3,000 pesos a month - the first such increase since 2006. An estimated 155,000 employees have been laid off since Macri enacted fiscal and monetary austerity within days of taking office last December.
At: http://buenosairesherald.com/article/214642/minimum-wage-to-increase-by-33-percent
