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  HOME | Argentina

Argentine Public Employees Demand Pay Raises amid High Inflation

BUENOS AIRES – Argentine public employees went on strike on Tuesday to demand pay raises amid high inflation and call for the reinstatement of people laid off in recent months.

Demonstrations were held across the South American country, with the main rally taking place in Buenos Aires.

The Association of State Workers (ATE) and the CTA Autonomous union called for the nationwide job action at a time of a further escalation of the country’s long-standing economic crisis, which dates back to April 2018.

Argentine stocks and the peso plunged after market-friendly President Mauricio Macri performed more poorly than expected in primary elections on Aug. 11, and the government has acknowledged that the renewed currency weakness will be reflected in the August inflation figure, which is due out on Thursday.

Argentina’s annual inflation rate stood at 54.5 percent in July, although consumer prices had been decelerating before the crisis re-erupted last month.

“The measure is aimed at demanding the reinstatement of all laid-off workers, a reopening of salary (negotiations), the reestablishment of all programs that were withdrawn, the rejection of the stability agreement between the government and the UPCN (National Union of Civilian Personnel),” the ATE said in a statement.

Unions in each economic sector in Argentina negotiate inflation-adjusted salary increases with public entities.

But many of those agreements have become outdated because consumer-price hikes have far outpaced the contractually agreed-upon wage increases.

The main rally in Buenos Aires followed a route frequently used by demonstrators – from 9 de Julio Avenue to the Plaza de Mayo, where the presidential palace is located.

Macri’s administration has suffered through a particularly rocky stretch in recent weeks, with different sectors holding anti-government demonstrations and the incumbent losing out to center-left rival Alberto Fernandez by a whopping 16-percentage-point margin in the August primary elections.

That result signaled that Macri has a big uphill battle to win re-election on Oct. 27 (a second round will be held if needed on Nov. 24).

The secretary-general of the ATE, Hugo Godoy, told EFE that the steps taken by Macri’s administration since the election debacle to address the economic crisis have been “too little, too late.”

“The disaster they’ve created with the measures they’ve adopted is so big that (the new ones) are like using a Band-Aid to fight cancer,” Godoy said at the demonstration in Buenos Aires.

“Macri’s government, following the orders of the International Monetary Fund, accelerated capital flight and the country’s economic meltdown and multiplied poverty and hunger,” Godoy said, referring to austerity measures adopted as part of a record $57 billion bailout deal last year with the IMF.

The ATE’s secretary-general said that some public employees in Argentina – where around 32 percent of the population is under the poverty line – now receive a salary that is below the cost of the basic food basket.

The government responded to the plunging stock prices and sharp depreciation of the peso (which fell to as low as 63 per greenback, although it now stands at around 57) by imposing capital controls on Sept. 2.

Among other measures adopted then in a bid to stabilize financial markets, Macri restricted dollar purchases by individuals to $10,000 per month and required exporters to bring back to the country all hard currency from their sales abroad.

Those measures were surprising because one of Macri’s first moves when he took office in late 2015 was to remove capital controls.

Macri’s administration also recently has taken other steps aimed at alleviating economic hardship, including suspending the value-added tax on basic goods and temporarily freezing gasoline and diesel prices.

 

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