With the downward inflation, although still persistent, prices in Argentina are high measured in dollars. This led to a paradox. On the one hand, People complain that wages are low and that they are not enough to get to the end of the month. On the other, Production sectors complain that wages are high in dollars Putting exporters and industries that compete with imports.
Inducing a devaluation of weight could lower salaries in dollars, giving competitiveness to exports and industries that compete with imports. But the situation of the people will worsen for salary liquefaction. In the opposite direction, yielding to union pressures allowing wages to increase the purchasing capacity of remuneration, but at the expense of aggravating competitiveness problems.
Faced with this crossroads, it is useful to compare the current situation with some time of the past. In this regard, according to data from the Ministry of Economy, it is observed that:
- In it 2017 The registered private salary was US $1,500 Monthly and GDP per private wage earner was US $124,000 per year.
- In it 2025 The registered private salary is US $1,060 And the GDP for private wage earner is US $97,000.
- This implies that the salary in dollars fell a 29%while productivity – PBI by registered private wage – a 22% compared to 2017.
These data show that with respect to 2017 – which was the year prior to the trigger of the exchange crisis, whose rests are still suffering – both salaries and productivity were significantly reduced. Therefore, The paradox of a low salary for people, but high for producers, is explained because each employee produces less. From here it follows that Argentina’s main challenge is to improve economic efficiency so that the added value generated by each worker increases.
Another very suggestive reference is that in the mid -1990s the salary measured in dollars was also at around $ 1,000 at current prices. That is, level similar to the current one. But productivity (GDP per private wage earner) was 60% higher. This warns that, beyond the legitimacy of claims to improve remuneration, in the current conditions the government should continue to be extremely conservative in validating increases in salaries that are decided in peers at the centralized level between the sector union and business associations. It is highly recommended that the update of salaries be defined at the level of each company in order to be consistent with their productivity not to force jobs.
To improve salaries and competitiveness simultaneously it is essential to generate a more favorable production environment. The agenda is very wide. However, three elements are essential and urgent: a) Improve productive infrastructure in the three levels of government; b) improve taxes, establishing that the super VAT absorbs provincial gross income and fees to municipal sales; yc) Improve labor regulations allowing the disappointment of SMEs of the old collective agreements signed centrally by sectoral unions and associations of dubious representative employers.
In general, there is a trend among economists to exaggerate the importance of exchange policy and to make superficial and generic references on productivity policies. Reversing these biases will contribute to the fact that from the three levels of government a less passive attitude is assumed with respect to the reforms that are vital so that the remuneration and competitiveness of national production increase simultaneously.
*Jorge Colina is an economist and president of Idesa.
By Jorge Colina
