Registered workers earning the minimum wage in Argentina can currently purchase only six out of every ten products that their salary would have allowed prior to Javier Milei’s assumption of office. This level of purchasing power is even inferior to the crisis of 2001, warns a new report from the University of Buenos Aires. It also occurs against the backdrop of the closure of private firms – more than 2,000 have ceased operations in a mere month. The minimum wage has experienced a decline of nearly 40 percent in its purchasing power since November 2023, the month preceding Javier Milei’s inauguration as President, according to a report. It underscores that the advent of the libertarian government initiated a prolonged decline in real basic wages, marked by a 15 percent contraction attributed to heightened inflation. This was succeeded by a more pronounced decline of 17 percent in the initial month of 2024. The trend experienced a temporary interruption for several months when the nominal increase was either accompanied by or exceeded inflation.
Nevertheless, between November 2023 and May 2026, the real minimum wage experienced a cumulative decline of 39.7 percent. This contraction, coupled with the declining trend of prior years, resulted in last month being inferior in real terms to 2001, prior to the collapse of convertibility. It also indicates a decline of 66.5 percent from the peak value recorded in September 2011. In conjunction with this decline, formal employment experienced a reduction of 11,000 jobs in March, as detailed in the UBA report. Since November 2023, 217,000 jobs have become unfilled in the private sector, it adds. This job destruction is attributable to a contracting economy. The most recent data from the Fundar think tank indicates that 26,448 companies have ceased operations between March 2023 and the same month this year, during which 2,011 enterprises were closed. That figure contrasts with the fall of 257 firms registered in the previous month and marks a new acceleration in the deterioration of the productive fabric’, explained Fundar.
Among the most pertinent cases are Citroën, which ceased vehicle manufacturing in Argentina to focus its regional production in Brazil and Uruguay; Leval SA, a veteran manufacturer of metal structures and a supplier to Siderar, Siderca, and Acindar, concluding over 50 years of operations; and the facility of Granja Tres Arroyos in Entre Ríos. The latest report indicated that the Milei model has produced beneficiaries, though they do not constitute a majority. Their data analysis indicates that capital-intensive sectors experienced greater growth, alongside those engaged in natural resources, finance, significant investments, and exports: energy, mining, agriculture, banking, professional services, and real estate. Meanwhile, sectors characterised by high labour intensity that provide wages and are active within small and medium-sized enterprises, as well as the domestic market, public works, and mass consumption, have experienced the most significant challenges.
This includes construction, industrial PyMES, traditional retail, mass catering, state employment, personal services, education, health, and culture. Pensar concluded that this kind of growth produces a group “which generates dollars and investment but has still not managed to transform that recovery into mass employment, high wages and an extended improvement for the middle class.” A recent public opinion survey regarding sectorial perception reveals a divergence from the libertarian model, with 83 percent of respondents expressing a favourable view of national industry. Additionally, 40 percent concurred that protection against foreign competition is necessary for the country’s growth.