Argentina’s private sector witnessed the sharpest wage decline in nearly 30 years due to the peso’s significant devaluation under President Javier Milei, reports indicate.
This significant financial shift highlights the immediate impact of Milei’s economic strategies, as detailed by government findings.
In December, inflation-adjusted salaries dropped by 11%, the steepest monthly decline in 29 years of government labor market reporting.
Although there were slight wage improvements in January, the purchasing power of consumers notably diminished, as noted by Casa Rosada.
This trend sheds light on the challenges small businesses face, with consistent double-digit spending declines each month since Milei‘s tenure began on December 10.
Government employee union plans to strike over deemed “unacceptable” wage increase proposal.
Milei, while still maintaining relatively high approval ratings domestically and receiving backing from international investors, introduced a “shock therapy” approach.
December witnessed a severe 54% peso devaluation, intensifying Argentina’s recession and challenging reform efforts in a confrontational Congress.
Experts polled by the Central Bank of Argentina predict a 3.5% shrink in the country’s GDP this year, emphasizing the broad economic repercussions of Milei’s policies.
The interconnectedness of economic reforms, wage changes, and broader impacts on national and small business finances complicate Argentina’s economic outlook.