Business News

Salaries vs. inflation: how the race ended in 2018

In 2018 the salaries of formal or white employees increased 30.6%, period in which inflation added 47.6% according to the INDEC. It is a loss of 17 points, equivalent to a decline in the purchasing power of salaries of 11.5%.

The data on the evolution of formal salaries arises from the ‘Average Taxable Compensation of Stable Workers’ (RIPTE), which is drawn up by the Government and which takes into account the variation in the taxable remuneration destined for the Social Security System.

As of December, the average gross salary (before the retirement and health discounts of 17%) was $ 34,339.61 compared to $ 26,301.42 in December 2017. With the discounts, the net or “pocket” salary it is reduced to $ 28,501.

This wage loss was very intense from May onwards. Since then, every month inflation exceeded wage increases.

The salary retreat this year adds to those of previous years. In the last three years, formal salaries had an increase of 117.3%. They went from $ 15,800.97 (December 2017) to $ 34,339.61 (December 2018). While in those 36 months the cumulative average inflation was 159.5% (40.9% in 2016, 24.8% in 2017 and 47.6% in 2018). It is equivalent to an accumulated salary loss of 16.3%. If informal or black wages were included, the actual wage loss would be higher.

 The evolution of RIPTE by 30% and inflation by 70%, is used to determine the increases in pensions, retirement benefits and other social benefits (AUH, Family Allowances, non-contributory pensions) that encompass a total of 17.8 million people. As announced on Tuesday Clarín, the increases for these beneficiaries will be 11.8% in March and 10.8% in June.

In the Government, they expect inflation to fall into a downward curve for those months, and that will allow some recovery of purchasing power. It was the promise left by Finance Minister Nicolás Dujovne at the last Cabinet meetings.