Sectoral wage negotiations are in full swing in Argentina, against an economic backdrop that is as uncertain as it is tough. These are the first such talks to take place since the centre-left government of Alberto Fernández came to power in December. Wage increases in fixed tranches appear to be the approach being favoured, for example by the commerce sector trade union, so as to avoid feeding into the inflation outlook while reinvigorating the purchasing power of the lowest paid. Although the restoration of purchasing power was one of the president’s campaign promises, the crisis makes systematic adjustments based on inflation difficult. Meanwhile the economic and financial consequences of the coronavirus outbreak complicates matters further.
The negotiations led by the trade union for Argentina’s commerce sector – traditionally closely observed, since they concern some 1.2 million workers – keep close tabs on inflation. The agreement signed at the end of February covers adjustments to the 2019 pay rise on the basis of inflation. While the pay rise for the year stood at 52%, rampant inflation in the country reached 55% last year. What is unusual about this adjustment is that it is calculated as a fixed sum, rather than in...
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