In Milei's Argentina 'economic miracle', not everyone's a winner

Yahoo

05-05-2025

By Nicolás Misculin
BUENOS AIRES (Reuters) -Christian Bialogurski, 35, often spends 12 hours a day teaching communications classes at schools in the Buenos Aires suburbs, sometimes not eating until he returns home at night to save costs.
The Argentine's monthly salary - in a good month the equivalent of $450 - covers his travel and rent of some $270, but little more.
"It's not enough. I don't have any money left by the 15th of the month. I sometimes ask my mom for food," said Bialogurski in his modest suburban home in Loma Hermosa on the outskirts of Buenos Aires. "You have to endure the hunger."
The policies of libertarian President Javier Milei have done much to stabilize Argentina's long turbulent economy. Its notoriously high inflation has cooled, its currency controls have been torn down and it has notched its first budget surplus in 14 years.
Milei's supporters and many in the market have cheered it as an "economic miracle."
But for some Argentines, adjusting to this new reality has been painful.
Cuts to state spending have hit pension pots and public sector infrastructure projects. State workers, including teachers, have seen their incomes dwindle, as Milei has prioritized development of the private sector in industries like energy and mining.
Public sector salaries fell over 15% in real terms in the year after Milei took office in December 2023, a report from local consultancy CTA Autónoma calculated.
For those in the private sector, the news is better, with their salaries now outpacing inflation - up over the same period around 3.3% in real terms.
"Salaries aren't enough, and it's hard to make ends meet, but the drop in inflation in recent months has brought more predictability regarding expenses," said Julieta Battaglia, a 43-year-old accountant in the private sector in Buenos Aires.
"Now at least prices don't all increase week by week."
RISE IN INFORMAL SECTOR
Unemployment and poverty both spiked initially under Milei, but have since improved as the country emerged from recession. The jobless rate ended last year at 6.4%, slightly higher than when Milei took office.
Argentina policy think-tank the IPyPP said that the rate of self-employed work has risen, however, creating a large group of people who in many cases lack social security, making them more vulnerable.
Informal workers earn some 41% less than formal workers in the same sector, said Roxana Maurizio, a researcher specializing in employment at state science research council Conicet. For them, having a job was "no insurance against poverty," she added.
That subtle weakening of the job market contributed to an over 10% drop in supermarket consumption last year, official data show, and has stoked unrest, with regular protests against austerity.
"If you add all the temporary jobs that lack social security and are very low-paying, unemployment in Argentina is not just some 7%, but rises to 30%," said Agustín Salvia, a poverty expert at the Catholic University of Argentina.
The Ministry of Labor did not respond to requests for comment from Reuters. Milei's administration has brushed off criticism, arguing that fiscal adjustment was essential and that as inflation has come down salaries are improving in real terms.
As well as teachers and state workers, construction jobs have been hit by cuts to state spending on railways and roads, while deregulation to allow more imports has affected some local manufacturing of products like cars, as stiffer competition has eroded margins.
"For new models, the costs we are now facing aren't totally competitive," said Ramón Ramírez, executive director of auto parts maker Maxion Montich. "So decisions are probably being made to import components rather than produce locally."
Protests have become a weekly event. In one in April, pensioners held up signs saying "Retirees don't give up. Milei out."
"My pension is 270,000 pesos ($251). It's not enough to buy meat or pay for utilities," said 69-year-old retiree Ricardo Bouche. "I can't even buy my medication. I had prostate cancer surgery two years ago, and they've left me without medicine."