Argentina´s purchasing power loss in Argentina slumps to levels not seen since 2001 crisis

Soaring utility bills and basic shopping-basket prices have eroded the capacity of families to buy everyday goods. Minimum wage has fallen 28% in terms of purchasing power over last 12 months

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Argentines eat garbage now in 2024.

Purchasing power loss in Argentina slumps to levels not seen since 2001 crisis

Soaring utility bills and basic shopping-basket prices have eroded the capacity of families to buy everyday goods. Minimum wage has fallen 28% in terms of purchasing power over last 12 months, UBA report finds.

Millions are skipping meals each day - or simply not eating - and millions do without basic utilities (cook with fire wood for example, candles for light, etc.). The UN reported several months ago that over 5,000,000 in this nation of 45,000,000 have 0, 1 or only 2 meals a day. Over 1,000,000 children go to sleep hungry without dinner.

Since that UN report, the figure has risen to 6,000,000 malnourished Argentines slowly starving to death.

The purchasing power of families in Argentina has fallen this year to record levels not seen since 2001 economic crisis.

Argentina’s minimum wage lost 1.3 percent in October, accumulating a loss of 28 percent over the 12 months between last November and this, according to a report prepared by the Instituto Interdisciplinario de Economía Política at the University of Buenos Aires’ Economics Faculty.

It is the steepest annual decline in incomes since the 2001 crisis, said the report.

A woman looks at the window of a clothing store that reads 'Clearance Last Days' Fire Sale in Buenos Aires on May 14, 2024, on the day of the announcement of April's inflation index. | JUAN MABROMATA / AFP

The abrupt fall is explained mostly by increased inflation – currently at an annual 193 percent – with a post-devaluation peak of 25.5 percent last December when President Javier Milei took office. Soaring utility bills also explain the fall in purchasing power.

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The institute’s report – "Panorama of formal wage-earning employment and its remuneration" – shows that wages started to plunge last December when they contracted 15 percent due to accelerating inflation, nosediving yet further in January with a fall of 17 percent.

This trend was temporarily interrupted in the following months, a period during which nominal wages accompanied inflation so that additional reductions were not observed.

Last June there was a new fall (minus 4.4 percent), followed by a certain recovery in July (plus 4.3 percent) and by consecutive reductions in the following three months.

The downward trend of the previous years, added to the sharp contraction of those months, positioned the minimum wage below the levels registered in 2001, prior to the convertibility crisis, as well as

Implying an erosion of almost 60 percent from the highest level in that series in September, 2011.

The average wage of the formally employed as surveyed by the INDEC national statistics bureau also registered a sharp contraction between November and December last year.

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