2024-11-09 07:11:00
In the opening chart, we look at the evolution of worker participation and capital factors in total earnings since 2016.
It is clear that the distribution disaster observed during the government of Javier Milei in the second quarter of 2024 (latest data) is the worst in ten years and of course we will confirm this disaster when we get the official data for 2024 The third quarter of the year.
Overall, Milley is leading the country, without haste or pause, toward a terminal, massive social crisis that, as we have repeatedly noted in these columns, may be one of the most important in living memory , one of, if not the most important crisis in our living memory.
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We already have key social indicators such as poverty, extreme poverty, poverty gaps, which are worse than they were in January 2002 and are creating a very clear crisis environment.
We just need to confirm this on the distribution side, where we had previous clues from the Gini coefficient, which clearly suggested that the return to distribution position established by President Milai after the sharp devaluation in December 2023 was heading towards a record since the crisis. , always based on official data.
In this case, we credit the data processing to José C. Paz University, which gave us access to graphs that transparently show how Argentina’s distribution slope does not stop.
When we know the next data for the third quarter of this year, our worker income participation rate will likely be around 41 points. Without waiting, today we observe that the decline in participation caused by the 54 points left by Cristina Fernandez and the governments of “Common Change” and “Todos Front” has deepened, with the participation of our workers and workers at 43.4%. Clearly, our situation is about to get worse.
This corresponds to the current average poverty rate for the general population of Conurbano, but among young people and children under 18 it is about 75%, which also includes pensioners and pensioners. percentage points, climbing to 32% today, will continue to grow, and the lack of unemployment benefits will gradually come.
Until then, the clear precariousness of employment will be further exacerbated by the overexpansion of self-employment (what liberals call entrepreneurship) on the one hand, and the usual epidemic that already affects 43% of the economically active population on the other. Informal work.
The income crisis is severe and, overall, wages offered by the formal market and demanded by unions are consistent with the poverty basket of a typical household.
For example, Unión Tranviarios Automotor (UTA) finally called off a transport strike scheduled for Thursday, October 31, in the Buenos Aires metropolitan area. The union led by Roberto Fernandez reached an “agreement” with the transport company at a Labor Ministry hearing.
Starting in January, they will increase their base salary from $1,060,000 to $1,200,000. The typical household’s poverty basket totaled $1,014,568 in October and is expected to total $1,115,000 per month in January (without discounts) and does not include rent. The amount UTA received was slightly higher than CBA. Catastrophic.
Naturally, given the seriousness of the deterioration, the forum was attended by a large number of consultants who confirmed that, despite the adjustments, the profile of Javier Gerardo Milai is still growing and will not stop growing.
What’s more, we can predict that for every increase in poverty and every decrease in workers’ participation in the distribution of income, the figure of Chairman Rivadavia today will increase by one, not one.
They were liberal advisers who, although clearly inspired by Trotskyism, embraced the philosophy that “worse is better.”
in the end. Dear Introduction readers, how much has this creature grown?
* Director, Equis Consulting.
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#Milai #worse
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**Interview with Dr. Mariana Ruiz, Economist and Social Policy Expert**
**Interviewer:** Thank you for joining us today, Dr. Ruiz. We’re here to discuss the current economic situation in Argentina under President Javier Milei’s administration. Recent reports suggest that the country is facing its worst distribution disaster in a decade. What are your thoughts on this alarming trend?
**Dr. Ruiz:** Thank you for having me. Yes, the data clearly indicate a significant regression in income distribution under Milei’s government. The worker participation rate has plummeted, indicating that a larger share of total earnings is going to capital rather than labor. This economic approach, particularly his drastic cuts to state spending, has contributed to a deep recession, with the forecast for GDP shrinking by 3.8% in 2024.
**Interviewer:** That’s indeed concerning. The report mentions that social indicators are worse than they were during the crisis of January 2002. Can you elaborate on what specific indicators are of most concern?
**Dr. Ruiz:** Absolutely. Key indicators like poverty and extreme poverty are reaching alarming levels—particularly among vulnerable populations. For instance, the average poverty rate in the Conurbano area is around 75% among young people and children under 18. The extreme poverty rate is equally troubling, affecting about 32% of the population. This trend not only highlights the immediate economic struggle but indicates a long-term crisis in social welfare and job security.
**Interviewer:** Many experts describe this situation as potentially leading to a “massive social crisis.” What do you believe are the implications if these policies continue?
**Dr. Ruiz:** If the current trajectory continues, we’re likely to witness a significant deterioration of social cohesion and growing unrest. The precarious nature of employment—exacerbated by the absence of unemployment benefits—will push more people into poverty. The implications extend beyond the economy; we may see an increase in social tensions, which could lead to protests and civil disorder.
**Interviewer:** Are there any signs that the current government strategy might change, or is there resistance to these measures from within the administration?
**Dr. Ruiz:** As of now, there’s little indication that Milei plans to alter his economic strategy. However, public sentiment is crucial; if discontent continues to grow, we may see pressure from within his coalition or from the general populace demanding change. The data we expect to release shortly for the third quarter of 2024 will likely shed light on whether there can be any shift in policy.
**Interviewer:** Thank you, Dr. Ruiz, for your insights. It seems like Argentina is at a critical juncture, and your analysis highlights the importance of effectively addressing these economic and social challenges.
**Dr. Ruiz:** Thank you for having me. The situation is indeed pressing, and it requires urgent attention from both policymakers and society as a whole.
