According to a report by Gestión Consultores, only four sectors had a salary adjustment of more than 100% in the first half of the year in the formal sector. These are specifically the branches of Logistics and Transportation 109%, technology 106%, Health services 103% and financial services 101 percent.
The rest of the activities had minor adjustments. The construction78% and the agroindustry81%, appear among the items with the lowest salary increase in the first half of 2024.
Likewise, a difference in the level of adjustment can be easily identified depending on the size of the company. Large companies, with more than 1,000 employees, granted an average of 105% raises, while the rest failed to reach 100%. The only ones that came close were SMEs with less than 10 workers, with an average adjustment of 92% in the first semester.
Now, what are the differences due to? Paula Pia Arieteconomist and director of Gestión Consultores, explained that the most important thing, beyond the size of the company, is in which sector each company operates.
“There are very large companies in activities that are doing well and some smaller ones too. Technology and mining are the two that are making the difference,” she commented.
“On the other hand, it must be taken into account that large companies are the ones that adjusted salaries the least in 2023. Now they are recovering part of what they lost last year,” added Ariet.
There is a lot of uncertainty around the variation in salaries in the formal sector for the second half of the year; labor market experts express this by being cautious in their projections.
“My feeling is that the Government is going to try to ensure that the entire salary discussion begins to take place against future and not past inflation. In this framework, the recovery will be tied to the sectors. Some did not lose in the first semester and will surely be able to recover faster in the future, as is the case of energy, the ICT sector and mining. The rest, in general, will be limited to not losing more against inflation, so the recovery may be very slow,” said the economist and founding partner of the consulting firm Abeceb. Dante Sica.
Some did not lose in the first semester and will surely be able to recover faster in the future, as is the case of energy, the ICT sector and mining (Sica)
“The level of recovery will be determined by the sectoral situation. For some time now we have been trying to start the discussion on the productivity side, but the truth is that when you are in an inflationary process, arguing about productivity loses meaning. You don’t know how much CPI is and how much productivity is,” added the former Minister of Production and Labor of the Nation.
The Economist Jorge Colinafrom the consulting firm Idesa, told Infobae “If inflation remains at one monthly digit, salaries will continue to adjust with respect to past inflation and will achieve a recomposition, although not too important.”
“The slowdown in prices is the fundamental condition so that salaries do not continue to lose purchasing power. It is inflation that kills real wages,” Colina stressed.
Jose Vargas, director of the consulting firm Evaluecon, believes that “For the second semester we can expect that, for at least three months, there will be a slight recovery in the purchasing power of salaries, taking into account that inflation is going to slow down. Afterwards, a lot will depend on how the macro structure of the national economy continues to develop.”
At the macro level, Vargas assured, several changes are needed for there to be stability and the economy to begin to grow: “On the one hand, the agro-export sector is required to liquidate foreign currency considerably so that they can improve the reserves of the central bank and that Argentina can refinance the maturities it has as of June. More trust and credibility is also needed from a political point of view, taking into account what has to do with the Bases Law, the relationship of the national government with the provinces for the sending of funds. In addition, it is essential that there is less tax pressure and that the investments that the Government needs so much arrive.”
The slowdown in prices is the fundamental condition so that salaries do not continue to lose purchasing power. It is inflation that kills real wages (Colina)
For her part, Paula Pía Ariet, considered that salaries can continue in the second semester with the same trend that they showed in the first. “If we analyze the January-May period, we find that salaries have barely beaten the price advance registered during that period. Surely the same trend will continue. In any case, only 6 points have been recovered, when in all of 2023 inflation exceeded income by 40 points.”
Ariet also anticipated that, with the slowdown in inflation, the negotiation periods will be extended. “More than 75% of the sectors had been negotiating monthly or bimonthly adjustments. Now the deadlines will be longer and the negotiations will surely become quarterly or four-monthly,” said the specialist.
The analysts consulted by Infobae They agreed that energy, mining, the financial sector and the technology sector will be the sectors that will undergo the greatest adjustments in the second half of the year. “They are the ones who are having a relatively good time,” they clarified.
In any case, even within the sectors themselves there may be differences in adjustments depending on the geographic region. Yes
According to Dante Sica, the salary recovery will be very heterogeneous throughout the country. “In Catamarca and Salta, for example, salaries have been growing in real terms thanks to mining. The same does not happen in other regions with worse performance of economic activity,” he warned.
Sica highlighted that the Argentine labor market is characterized today by having a lot of mobility and few talents. This scenario, he assured, will directly affect the salary adjustments in the coming months.
“80% of companies say they have problems hiring staff due to a lack of skills, whether hard or soft. That is why salaries tend to be higher when it comes to retaining talent,” he explained.
“Last year was critical, because with a gap of 50% it was advisable to work outside. Local companies were losing talent and could not retain them. Now, with greater stability, with the idea of releasing the stocks and the smaller gap, the problem has eased considerably. Even so, labor demand and supply are at odds,” said Dante Sica.
