With a falling minimum wage and growing poverty, the Milei government faces criticism for losses in purchasing power and impact on the working class; Understand
Javier Milei’s government once again decreed an increase in the Minimum, Living and Mobile Wage (SMVM), delegitimizing the Salary Council and reinforcing the loss of purchasing power for workers, especially those in informal situations or who depend on state subsidies.
At the last meeting of the Salary Council, which brings together unions and businesspeople, there was no consensus on increasing the basic salary, previously set at $271.572 (R$ 1.634,86). Faced with the impasse, Milei intervened by decree, contradicting his own philosophy of “free agreements” between employers and unions, demonstrating his intention to deteriorate the living conditions of the working classes.
Resolution 17/2024, published this Thursday in the Official Gazette, establishes an increase of only $8.146 (R$ 49,04) at SMVM in December, with progressive adjustments until reaching $296.832 (R$ 1.786,96) in March 2025. This value is much lower than the $572.000 (R$ 3.444,44) demanded by unions and reflects the government’s alignment with the interests of the economic corporations that support it.
As a result, the SMVM in March 2025 will have its lowest real value in two decades, representing a drop of 17.8% compared to December 2023 and 39% compared to 2019. Despite the nominal increase, the real adjustment shows a significant loss of purchasing power amid persistently high inflation.
The devaluation promoted by the Minister of Economy, Luis Caputo, shortly after the government took office, and the ridiculous increases in the SMVM consolidate the continuous fall in popular incomes since 2011, with no prospect of recovery. The pace of adjustments is well below inflation, leaving workers in an increasingly precarious situation.
While the trade unions proposed raising the minimum wage to $572.000 (R$ 3.444,44)the Argentine Industrial Union (UIA) defended a staggered increase, culminating in $295.000 (R$ 1.776,90) in March. In the end, Milei adopted the UIA’s proposal, causing a significant real loss for the workers.
Luis Campos, labor lawyer and director of the Social Law Observatory, highlighted that this measure worsens inequality. According to him, the SMVM, which in 2009 represented 45% of the average salary in the registered private sector, today does not reach 20%. In his analysis, using the minimum wage as an adjustment tool is a harmful policy that intensifies social inequality.
Currently, the SMVM covers only a quarter of what is needed to overcome the poverty line, estimated at $1.001.466 (R$ 6.027,83) by Indec. Furthermore, the SMVM is a reference for starting salaries in the informal sector and for social benefits, such as Universal Child Assignment (AUH).
Data from the Interdisciplinary Institute of Political Economy (IIEP-Conicet) indicate the loss of more than 200 thousand formal jobs between September 2023 and June 2024. This trend was aggravated by the exchange rate devaluation, which further eroded purchasing power.
The “biggest adjustment in history”, promoted by Milei and Caputo to achieve “zero deficit” and meet the needs of the IMF, has pushed millions into poverty, despite recent official data showing a slight reduction in rates.
Faced with this scenario, the union leaders of the CGT and CTA have been complacent with the adjustment policies, highlighting the urgency of recovering the unions to face the government. It is essential to organize a fight plan that defends salaries, pensions and social benefits adjusted to inflation, in addition to demanding a minimum wage that covers the cost of the basic family basket.
With information from La Izquierda Diario*
Source: https://www.ocafezinho.com/2024/12/26/motosserra-de-milei-em-acao-argentina-tera-menor-salario-minimo-de-sua-historia/
