An average household comprising two working adults and two children living in the City of Buenos Aires needed roughly AR $19,700 (US $693) to not be officially considered poor in June, according to the latest report issued by the City Government’s statistics agency. The figure represents a 3.1 percent increase compared to the previous month, 0.8 percent lower than the inflation rate for the Greater Buenos Aires area released by the Indec on Tuesday.
Moreover, the same household needed roughly AR $9,500 (US $335) to not be considered destitute – a 3.2 percent increase compared to May 2018.
The poverty and destitution lines are determined by the household’s ability to access the so-called Food Basket (CBA) and Total Basket (CBT). The basic food basket, as its name implies, includes only basic food needed to subsist, whereas the CBT includes some services as well.
However, both assume that rent does not have to be paid. Presumably, this is the case because rent prices vary considerably depending on the size and location of the place the household inhabits, and the consequent impossibility to establish an average.
The minimum salary in Argentina is of AR $10,000. The last increase was implemented this month, but it was the latest installment of an increased established unilaterally by the government in July 2017 after it failed to reach an agreement with the other parties that comprise the so-called employment, productivity, and minimum salary council.
Between 200,000 and 300,000 workers registered in the formal side of the economy earn the minimum salary in Argentina. The number, however, is likely much higher: about a third of employed Argentines work on the informal side of the economy, and they tend to get paid sums that hover around this figure, oftentimes less. Moreover, the figure is used as basis to calculate roughly 400,000 social welfare plans – they are a percentage of the salary.
According to Infobae, the government is planning on announcing a new increase, likely to be around 25 percent, in the coming days. This would ultimately increase the salary to AR $12,500 (US $439). However, given that the country’s annual inflation rate is expected to be roughly 30 percent, this means that both the minimum salary and the welfare plans will increase at a lower proportion, thus reducing the mentioned people’s purchasing power. Predictably, unions part of the Council anticipated they will reject any offer that does not surpass the expected inflation rate. Their intention, in fact, having it increase to roughly AR $18,000 (US $633).