As the Argentinean Peso Falls, Ingenuity Rises
EspañolInflation in Argentina is nothing new. No one bats an eye when they read that the inflation rate this year hovers around 40 percent. Companies of all sizes around the country have been working to develop ways to compensate their employees for the loss in purchasing power of the Argentinean peso.
According to various testimonies from around the country, there are a number of ways companies are helping make up the difference, both through monetary and non-monetary compensation.
Guillermo — who prefers to keep his identity secret — says the construction company where he works has decided to open a checking account at a gas station close to their offices, which employees can use to fill their tanks.
Claudia says the multinational consulting firm Accenture is going to give employees an AR$4,000 bonus, and improve their medical coverage.
Other non-monetary benefits include free access to the company cafeteria, transportation from the office to different points around the city, and one or more days when employees are allowed to work from home each month.
Companies are also providing gym memberships, movie tickets, reimbursement for lunch at certain locations, discounts in restaurants and language schools, and graduate-school scholarships.
The lucky ones receive seven more vacation days, added to the 15 mandated by law after the first year of employment.
Wage Increases Lag Behind Inflation
Mariano, who also chose to remain anonymous, told the PanAm Post that the only raise he will get all year is a 25 percent salary increase in March. “Nothing extra. Water and garlic,” he says, using a very Argentinean phrase to describe a situation where no other options remain.
Florencia’s salary only increased 10 percent in April. Exasperated, she explains that she earned more as an intern in 2000, when the Argentinean peso was pegged to the US dollar.
Marianella says those that used to have good salaries have seen substantial cuts to their earnings. She is referring to senior executives at multinational corporations, who used to earn around US$5 million, but now earn roughly half: “They have diluted the wages of their most experienced employees.”
An employee of the San Isidro city government, however, shares that his salary has increased a total of 32 percent: 16 percent in March, and 16 percent in August. However, the auditing firm PWC gave its employees a raise of just 8 percent in January, and a similar salary increase in August. For informal workers, the increases are only slightly better.
According to the Cato Institute’s Troubled Currencies Project, 61 percent annual inflation is causing salaries to be diluted every month.
Salaries are worth less and less, because increases continue to lag behind inflation. The exchange market compounds the problem, which only allows a fortunate few to save their earnings in dollars.
The rest must purchase their dollars on the black market, and if they can’t, as the common Argentinean phrase goes, “cry about it at church.”
Fergus Hodgson edited this article.