The evolution of real wages revived differences between the government and Cuesta Duarteresearch institute of PIT-CNT. He Ministry of Labor he remains firm and maintains that the real salary increased in 2022, while from opposite ranks it is affirmed that it fell during the year. But this Friday the tone of the discrepancy rose when the minister Paul Mieres pointed out that some considerations exposed by Cuesta Duarte were not very loyal.
An annual study carried out by Cuesta Duarte indicated that taking into account the average of the 12 months of last year, real wages were below the level verified in 2021. Thus, it was the third consecutive year with a drop in real wages. He indicated that the end-to-end variation as of December 2022 showed a positive variation while the comparison of annual averages resulted in a fall of 0.6%, which is explained by the dynamics of wages and inflation throughout the year.
He pointed out that the “end-to-end” variation to December took into account the salary adjustments granted throughout 2022, but is strongly influenced by what happened in the last part of the year when inflation slowed. And that favored the recording of real wages at the end of the year.
The study indicated that the comparison of annual averages reflects what happens with the purchasing power throughout the year, giving equal importance in this comparison to each of the 12 months. It is then that “the unfavorable trajectory of real wages in the first eight months of 2022 (fundamentally until June) is not offset by the relative rebound that occurred in the fourth quarter.”
Therefore “if what is interesting is to have a balance of what happened throughout the year as a whole, the most appropriate thing is to take the annual average of the real salary,” added the institute. And that comparison is what shows that in 2022 the purchasing power of the salary had a decrease of 0.6% and was also 3.7% below the average level of 2019, the year before the pandemic.
Ines Guimaraens
PIT-CNT headquarters
The document stated that in the accumulated of the last 36 months between January 2020 and December 2022, a worker with a salary that evolved by the Average Wage Index (IMS) had a cumulative loss of purchasing power of slightly more than a full monthly salary.
As an example, he pointed out that a A worker with a monthly salary of $40,000 in 2019 lost an average of $1,150 a month, which over the last three years accumulates a loss of $41,400. “In other words, it is as if an average salaried worker has received wages in 35 of the last 36 months, while the rest is a loss,” he said.
different photos
Minister Mieres held a press conference this Friday to reaffirm comments made at the beginning of the year. There he maintained that the government had complied with its commitment to start recovering lost wages.
The account made by the ruling party is simple. The Average Wage Index (IMS) of the private sector increased 9.6% in 2022, while the Consumer Price Index (CPI) closed last year at 8.29%. Therefore, the purchasing power of the average salary increased by more than one point.
“We had affirmed and we ratify that 2022 closed with an increase in real wages. The Cuesta Duarte analysis is an average of salaries during the year. It means that they take each balance of each month as a starting point and based on that they take an average,” said the minister.
Camilo dos Santos
Minister Pablo Mieres
“What the ministry says is that after the whole year, when closing the real salary of the workers increased by one point. It is the difference between how much the IMS increased in the 12 months and how much the CPI. The difference is one point in favor ”, he indicated.
To differentiate the ways of measuring the evolution of real wages, he said that they were photos taken at different times of the year. “The Cuesta Duarte takes an average of the months of the year. The photo, rather, is half of the year. Ours is the photo of the end of the year, ”he expressed.
But he did raise the tone when he referred to the data handled by the PIT-CNT institute on the loss of a full salary in the last 36 months. “What Cuesta Duarte does is, it seems to me, very gimmicky. Of course, when there is a drop in wages, purchasing power is lost. Now add the 36 months and say that a thousand-odd pesos were lost per month and that multiplied by 36 gives $40 pesos and that means that an entire salary was lost, I would say that it is not a very fair way of analyzing, “he said.
old differences
It was not the first time that there has been a cross between the data collected by Cuesta Duarte and the figures handled by the Ministry of Labor. In August of last year, the institute published a report on the evolution of real wages in the second quarter. There, he explained that if the level of the average real salary registered at the end of that period was compared with the average of 2019, the drop in the purchasing power of the average salary was located at 4.9%. And the same thing happened this time.
That report was published on Monday, August 8. On Tuesday 9 in the afternoon, the Ministry of Labor called a press conference to present a report on the evolution of real wages as of July 2022 compared to the same month of 2020. “The general look gives the feeling that all the workers lost purchasing power. And that is not so,” said Mieres..
The message that the government preferred to give was that 54.4% of private sector workers had not lost purchasing power or had had a loss of less than 1% in the comparison (between 2020 and 2022) of that specific month.
But in the breakdown of the data presented, it could be observed that in this percentage there was 27% -of employees in sectors such as construction, metallurgy, supermarkets, the financial system, among others- who had a decrease of less than 1%.
Therefore, another reading was possible: 7 out of 10 workers had lost real wages.
