The last week of the pre-electoral final stretch he gave two good news to the Government that had been dealing with an adverse situation for six months. On the one hand, the dollar did not break the “ceiling” of the salary band imposed in April, when another bailout (from the International Monetary Fund) partly thanks to the fronton of dollars provided by the United States Treasury, waiting for the news the day after with the results. But also, the INDEC released its monthly report on economic activity that showed how in August 2025, the monthly economic activity estimator (EMAE) recorded an interannual increase of 2.4% in compared to the same month of the previous year and 0.3% monthly in seasonally adjusted terms. Two issues that in other normal circumstances would not have attracted attention. But after a semester in which exchange instability required a double extraordinary bailout and the economy shut down, expectations played a leading but not exclusive role.
Threats. Although the activity average broke the trend of leveling off with this positive number compared to the previous month, sectoral heterogeneity continued to show a significant gap between winners and losers. On the one hand, what rose the most was the Financial Intermediation category (+26% year-on-year and +0.9% monthly) followed by Mines and Quarries (9.3% and 0.37% respectively) and Hotels and Restaurants (+6.4% and 0.1%). But those that fell the most were the Manufacturing Industry (-5.1% and -0.8%), Wholesale and Retail Trade (-1.7% and -0.2%), both with a strong impact on the general level but, above all, on the labor market, which this year cut short its recovery after the great recession of the first half of 2024.
The official explanation that the President repeated over and over again was that the great slowdown in the economy was due to political circumstances: the expectations of a change in the economic orientation due to the electoral advance of the enemies of fiscal austerity, as they call the legislative manifestation through projects that generate greater expenditures without the correlation. But the truth is that the scheme articulated so that the dollar could be, once again, an inflationary ballast was effective for that purpose, stabilizing the CPI at 2% monthly, but at the same time it found a very difficult floor to break through, precisely because of the shortage of dollars. In turn, this circumstance added to the relaxation of the stocks in April and the elimination of the Lefi in July (which flooded the peso market) increased the demand for dollars that did not correspond to a market “price” and generated the fastest response: the increase in the interest rate. And this whole combo was lethal for the economic activity that had been recovering from the subsoil levels of the first quarter of last year, but that still (on average) did not exceed the figures for the third quarter of 2023, before the great inflationary blow.
Impact on the pocket. This productive plateau without activity having fully recovered cut off a window of improvement for workers’ incomes and that was also a drag on retail consumption, also eroded by the rise in interest rates that made credit more expensive for families.
In a recent work by the consulting firm Balanceit is estimated that since the end of 2023, the income of 14.5 million registered people (formal wage earners + retirees) showed a trajectory of the “root of disenchantment” type. “After an initial drop of 19% vs. the January-September 2023 average, there was a partial recovery until Feb-25 (94% of the previous level), followed by stagnation and slight decline”he points out.
Based on an average between January 2023 and September of the same year, The big losers were national public employees (-35%), provincial public employees and retirees who do not earn the minimum (-12%) and Retirees who earn the minimum (-9%). In turn, it concludes that “the evolution of real registered income correlates with the index of confidence in the UTDT government, which in turn anticipates the electoral performance of the ruling parties.”
In general, the “photos” of real income differ in their results depending on the chosen comparison point, which is no less distorted than an almost hyperinflationary year like 2023. Taking the end of December of that year as a base is not the same as September, before the quarter in which the price race was unleashed.
Economists Laura Caullo and Federico Belich, researchers from the Social-Labor section of the Mediterránea Foundation, in Argentina, one in five workers is poor. “The poverty rate by occupational status shows that, even having employment, 21.6% of those employed do not manage to overcome the poverty line; in absolute terms, this is equivalent to 4.5 million people out of a total of 21 million workers,” they explain. For this reason, they emphasize that having a job, in many cases, is no longer enough to guarantee a decent standard of living.
Poverty is, for these figures, a reflection of the labor market: among the unemployed, the incidence rises to 58.9%, which confirms the direct impact of the lack of employment on social vulnerability. This becomes more acute when having a job does not exempt one from poverty, especially when it comes to precarious or low-productivity occupations.
Furthermore, among the inactive (those who do not participate in the labor market for reasons of age, study or discouragement) poverty affects 35.2%. In this group, different realities are combined: on the one hand, the elderly (protected by a pension system with high coverage but low income), on the other hand, children and adolescents, the segment most affected by poverty, with an incidence of 45.4% among those under 14 years of age. It must be considered that the AUH reaches more than 4 million children, which contributes to alleviating destitution, but it is difficult to lift their homes out of poverty.
Fragmentation. Regarding wage stagnation, according to data from the National Ministry of Labor for 2025, 64% of private employees registered under an agreement are governed by collective activity agreements signed by only 17 central unions, another 32% of workers are governed by 595 collective agreements signed at the branch, region or occupation level. These figures show, for Jorge Colina, IDESA economist, a fragmented reality that makes it difficult to generate updated collective agreements and constitutes a drag on the activities with the highest projected growth. It points out that only 4% of workers are governed by a company collective agreement, data that shows that the collective bargaining system is extremely centralized. Two-thirds of registered workers are governed by collective activity agreements signed by 17 unions, of which 11 were negotiated in the last century (most in the 1970s and 1980s and some in 1990). “At the other extreme, a tiny portion is governed by company agreements. Celebrated by only 725 companies, a tiny number compared to the half a million formal employers in Argentina. In short, the rule is archaic collective agreements signed by leaders,” he concludes. Many times we talk about labor reform as a package, but it is not understood where changes are proposed. EThis is a direction that does not suppress but rather energizes negotiations.
by Tristán Rodríguez Loredo
