Beneath the surface of the Argentine economy, marked by fire in recent years by rising inflation, acute shortage of foreign currency, a permanent fiscal red and general decapitalization of the productive structure, other trends are emerging that are slowly shaping the scenario. ANDIn short, a long period of stagnation with relatively low unemployment and very low generation of quality jobs, but with incomes that are not enough to match inflation that is jumping steps. The big question in this picture of the situation is how it ends up affecting a key indicator when drawing up economic policies: inequality.
in the papers. The goal of encouraging a more equal distribution of income is part of almost every electoral platform. Sometimes the speed and degree of government intervention to promote it changes, but it is an indicator that marks the degree of success of the economic policy as it was stated. Of course, he is not the only one: The growth of per capita income, for example, is important for those countries that suffer paralysis or even long recessionary processes that end up generating a significant portion of the population living below the poverty line. Inflationary control also ends up being an objective in itself when, as in the Argentine case, monetary instability is already measured in decades. But the ability to combine all these indicators does explain the greatest achievements.
In the Peronist epic, having achieved a “50-50” distribution (between capital and labor) is a flag that is brandished as a revealed truth, but the truth is that it was not sustainable and reality became more complex, making such formula would result in a simplistic analysis. Scholars of welfare measures prefer to look at how income is distributed among fixed portions of the population (for example, deciles or 10% of all citizens ordered from highest to lowest income) and taking measurement units such as the “Gini coefficient”, which measures the degree of inequality in a population, varying between 0 and 1 (1 being absolute inequality and 0, the proletarian paradise). TOArgentina remained, traditionally among the countries with a more equal distribution than the rest of the region (as well as Uruguay) and very similar to that of the United States.
But two factors jeopardized this socio-cultural heritage, exemplified by the presence of a strong middle class, a distinctive Argentine sign: high inflation and the decomposition of the employment structure. Augustine Sagedirector of Argentine Social Debt Observatory of the UCA, since 2017 a paradox has been observed: a slow drop in inequality as a result of the deterioration that the middle classes have been experiencing. “In reality, the distribution has not become more unequal, due to the fact that the middle and lower-middle classes have been dropping their income level. It has been a process of impoverishment due to the fall of precisely those who made the distribution more unequal”Explain.
For Miracles Gismondi, economist of Empiria Consultants, except for the last data where the distribution of income worsens in recent years, an improvement is seen in the distribution. “But in reality it is associated with greater poverty: in short, it is that we are all poorer, those in decile 1, those in 10… actually, all of us, an improvement in distribution leveling down, which is not good news”, he clarifies. The difference is based on the context, precisely since it is impossible to separate it from the increase in poverty and zero economic growth.
Changes. A closely related issue is that of the slow but inexorable change in the structure of employment in the last decade, in which there is an increase in the number of informal workers and informal self-employed workers. Gismondi makes a distinction between the “professional” self-employed person and the one who was left “without completing high school”, more similar to the odd job worker.. “There is a growth in both the informal worker and the non-professional self-employed. That, again, does not affect the distribution of income in itself, but advances this more precarious labor market with labor income that has a clear downward trend in real terms.”, he adds.
In the last measurement of the Permanent Household Survey (EPH) what does the INDECcorresponding to the first quarter of 2023, the average income of the highest 10% was 8.5 times higher, taking 25.3% of the total while the lowest decile only got 3.3%. This difference is widened to 14 times if the family income per inhabitant between both extreme deciles is considered (there are more poor children than rich ones). For their part, of the 9.8 million wage-earners with an average income of $120,973, those who had a retirement discount (in white) earned $151,773 while those in black only got $65,657: a difference of 2.3 times between some and others.
In Salvia’s view, the impoverishment process is fundamentally associated with two dynamics: inflationary and labor precariousness of those segments that, since registered employment is not being created at the level that structurally should be. “We come with a decade behind in which precarious employment grows much more than private, formal non-salaried employment”, he emphasizes. This growth in precarious employment, which is not only salaried, but also self-employed, means that when you lose a formal job with many more protections (and also income), you tend to fall into precarious employment, as happened in the paralysis caused by the pandemic. . Only some can recover it and others maintain the most precarious situation, with lower income.
prices again. Finally, the inflationary factor also weighs on inequality. Its impact is more indirect, but with rates that in the last decade have never been from 25% to the current triple digits, the gap between the different items widens and therefore the distortion in relative prices is amplified. From 2020 until last June, there were items that were between 40% and 10% below the general average (communication, housing, education, for example) and others moved in the opposite direction (between 10 and 40% more than the CPI for clothing, restaurants and food). It depends on the type of consumption of a sector that your basket of goods can aggravate or alleviate your situation. “The less favored sectors have, in the face of a growing inflation rate, a greater lack of protection, something that does not happen with those who are at the highest end, who have the capacity to save and financial sophistication to defend themselves. Gismondi points out. “What ends up happening, and it was noticed in the first part of this year, is that income distribution worsens, something that is also expected to happen towards the end of the year with the inflation projections,” he anticipates.
That will be, precisely, the other dialectical battle during the campaign season: who more or less affected what is promised as a collective achievement: income equity. But that promise is useless if the plays in the labor market and in the gondolas end up defining the game against.
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