Milei’s blender destroys the purchasing power of retirement assets. Economy column from El Círculo Rojo, a program from La Izquierda Diario on Radio Con Vos, 89.9. In text and video.

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  • On Monday of this week, through DNU 274/2024, the change in the retirement mobility formula was announced.
  • With this new formula, the loss of purchasing power of retirement assets is crystallized thanks to the inflationary blow that the Government of Javier Milei applied since December.
  • In April, retirement benefits will increase by 25.7%. But since the $70,000 bonus is frozen, the minimum asset (bonus included) will actually increase by 18%: it goes from $204,445 to $241,216.
  • The April update will be in two installments due to the government’s sloppiness in announcing the change in mobility. This had not happened since the Alliance Government, when Patricia Bullrich also settled retirement benefits in installments.
  • The 25.7% increase in April combines an increase due to inflation in February (13.2%) plus a 12.5% ​​increase in compensation for what was lost since December.
  • Here is the first robbery. That 12.5% ​​is far from covering the 37% inflation of January and February, that is, it does not compensate for what it has to compensate.
  • The second theft is that the bonus received by those who earn the minimum, currently at $70 thousand, is in principle frozen.
  • Compared to December, the accumulated increase in the minimum asset, bonus included, will reach 50% ($241,215 vs. $160,713) and 62% for the rest of the assets, but inflation in the same period from December to April would reach 71 %.
  • How will the asset update be from now on? First, there is a transition period between April and June. In this period, month by month, salaries will be updated for inflation with a lag of two months, depending on the pace of publication of this statistic by INDEC.
  • When June arrives, these updates will be compared with what the old mobility offers. If the old mobility gives a result greater than the increases received, the salaries will have an extra increase. In the event that the old mobility results in a lower result, the assets will not have an extra increase.
  • Starting in July, salaries will be updated for inflation, also with the aforementioned two-month delay.
  • All this that I tried to explain, I’m sure no one understood it. That’s what we heard all week. Not only that older adults didn’t understand it. The entire announcement is so cumbersome that even the government had to amend the DNU due to an alleged error with the bonus.
  • Let’s try to understand the liquefaction of retirements from another side. In this month of March, according to the Ombudsman’s Office for the Elderly, a retiree needed $685,000 to live on a minimum asset of $204,445, with bonus included. In this way, the minimum income is only enough to live for 9 days.
  • But a year ago it was not much better: the minimum salary, bonus included, was enough to live only 11 days in March 2023.
  • Another way to look at it is in relation to the poverty basket for an adult. In December, with minimum income, a retiree could live like a poor person 30 days a month. In February, he was able to live as a poor person for only 22 days.
  • Making some assumptions about inflation this month and the next, we can say that, in March, the retiree was able to live as a poor person for 24 days. And, in April, he will be able to live 26 days as a poor person. That is, he will not be able to enjoy being poor all month like in December.
  • Since 2015, retirement assets, at all levels, have lost 60% of their purchasing power. Milei put on a higher speed a blender that has been working for years and aims to retire in retirement.

Economy / National Economy / Retirees / Javier Milei / The Red Circle


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