Two minimum wages now cover eight days of family expenses

A family needed a daily 75,505.86 pesos in March in order to meet its essential expenses, according to a new study from the CESyAC (Centro de Educación, Servicios y Asesoramiento al Consumidor) consumer studies centre. 

The data, which takes into account the cost of living in the City of Buenos Aires, contemplate 21,750.54 pesos for items of mass consumption (canned food, meat, cleaning products, fruit and vegetables and beverages) and 53,755.32 pesos to contract basic services for the household (rent and taxes, personal services and transport). 

The minimum wage increase, passing from 296,832 pesos in March to 302,600 in April (an increase of 5,768 pesos), covers little over seven percent of daily needs. In total, the income suffices to finance goods and services for eight days of the month.

This loss of purchasing power for a wage used as the basis for defining the minimum monthly remuneration to be received by workers, pensions, family and unemployment benefits and alimony is increasingly evident: in February, as an article in Perfil explains, two minimum wages permitted a family to meet the expenses for eight and a half days while March’s barely made it to seven. 

The cumulative inflation between January and March, according to the latest official data available, was 8.6 percent while the minimum wage rose 5.5 percent from January to April. This income had increased 3.5 percent for March (the most recent month measured).

Between April, 2024 to last month the minimum wage passed from 221,052 to 302,600 pesos, representing an increase of 36.8 percent, 19 percentage points below the interannual increases in prices last March (55.9 percent), the last available measurement. According to a report by UBA Buenos Aires University’s Economic Faculty, the minimum wage plunged 2.1 percent in March, steeper than that registered for February (when it was 0.4 percent).

The summons of the National Wage Council to agree on a new sum failed yet again, prompting the government to act unilaterally as it did last year, establishing not only the increase for April but also the minimum wages for May (308,200 pesos), June (313,400 pesos), July (317,800 pesos) and August (322,000 pesos).

All these numbers are way below the trade union demands of a minimum wage of 644,165 pesos for April and 657,703 for May while the business sector offered 301,500  and 306,500 pesos for those same months. With the sum requested by their fellow-workers, a family could cover their primary spending for 17 days, which, while continuing to be insufficient, is at least an advance on current capacity. 

For March this year the total basic shopping-basket as measured by the INDEC national statistics bureau for a family of four – and which does not take expenses like rent into consideration – climbed to 1,100,267 pesos while the basic food shopping-basket was 495,616 pesos. Taking these numbers into account, the minimum wage will cover 28 percent of the total basic shopping-basket and 61 percent of the food shopping-basket, although with March consumer data.

Taking the same comparative basis, the minimum wage (234,315.12 pesos) in May last year covered 30.1 percent of the total basic shopping-basket and 65.4 percent of the food shopping-basket. This month the purchasing power will fall two percentage points when compared to the former and 4.4 points compared to the latter.

The minimum wage is also used as the basis to measure what the father in a separated couple should pay the adult responsible for the child each month; in most cases when no income can be demonstrated, half the minimum wage is established. This sum, calculated on the basis of the April updating (151,300 pesos) sufficed to cover 31.1 percent of the basic expenses of  a child aged between one and three and 29.4 between six and 12 years.

For the same month last year CESyAC had calculated a family’s daily spending at 35,722.53 pesos. Two minimum wages then covered the spending for 13 days – almost double the calculation today.