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Peña: gov’t won’t re-open wage negotiations

Leaders of teachers’ unions talk to reporters before attending a meeting at the Education Ministry headquarters in Buenos Aires yesterday.
Cabinet chief insists annual inflation rate will match up with deals signed earlier in the year

The government will not re-open wage negotiations with the largest trade unions in the country and many affiliate organizations, Cabinet Chief Marcos Peña confirmed yesterday, despite union leaders arguing that previous wage talks have been made redundant by worse-than-expected inflation data.

During an interview with Radio La Red, Peña insisted that the government would refuse more rounds of wage negotiations with unions in 2016, even though inflation figures are far exceeding the government’s estimate in January — a basis for the previous round of talks — that it would “not exceed 20-25 percent.”

“In general, what we see is that the pre-existing agreements reflect what the coming rate of inflation will be. We hope that after dialogue we will see wages and purchasing power gain ground month by month,” Peña said.

The Cabinet chief added that the previous wage deals agreed with some of Argentina’s largest umbrella unions, including the CGT and CTA, and would therefore fall into line with inflation once it began to come down in the second half of the year and beyond.

The existing deals “reflect the lower rate of inflation that is coming, that is surely going to be lower,” Peña said, in reference to previous declarations by government officials, such as those made by Finance Minister Alfonso Prat-Gay in June, that President Mauricio Macri’s administration was “very confident for the second half of the year” that the rate of inflation would fall and the economy “will bloom.”

“There are clear signs that in July (inflation) was significantly lower than in June ... there is a quite general consensus that the rate will be around two percent, some say 2.5 percent, 2.3 percent or 2.2 percent,” Peña said.

Unions reject gov’t optimism

The optimistic outlook expressed by Peña and Macri’s government has been dismissed by many unions in recent weeks however, including by those regarded as closer to the national administration.

The largest umbrella union in the country, the CGT — which is due to host a “reunification” conference later this month — says that even if the government’s recent monthly estimates on inflation were accurate, they would still be outpaced by the rising cost of living.

Inflation rose by 3.1 percent in July, pushing the expected annual rate to 45.86 percent and meaning that a typical family needs an income of around 12,800 pesos per month to remain above the poverty line, according to the umbrella union. Further, new estimates for the Workers’ Inflation Rate, calculated in a joint project of 45 trade unions from the CGT and CTA, along with the UMET university, earlier this week stood at 46 percent.

The same model said that the annual inflation rate stood as high as 52.6 percent for low-income workers and that purchasing power of real wages had collapsed during Macri’s short presidency, falling 9.9 percent since November.

Peña’s statement that new wage negotiations suggested by the unions would not take place, despite high inflation and increasing costs of living in Argentina, will likely anger unions and their members, many of whom negotiated wage increases with the government closer to 30 percent before more the gloomy economic outlook and data had arrived.

Among the most high-profile labour conflicts revolving around the dismissal of new wage negotiations is that of teachers and education workers in Buenos Aires province, who staged a 48-hour walkout earlier this week demanding new wage negotiations aimed at raising salaries to up to 45 percent, in line with inflation.

Unions representing educational professionals negotiated wage hikes topping 30 percent earlier this year, but with annual inflation set to top 40 percent at least according to estimates, the strike highlighted the growing demand for collective bargaining rounds to be reopened.

‘Year of growth’

Despite the entrenched opposition from unions, Peña said that current government policy would be proved correct by a national economic outlook he predicted would be much-improved next year.

The Cabinet chief said that 2017 would be “a year of growth” for Argentina and that the government was at present taking the gradual, “necessary” measures to make sure that was realized.

The benefits of the Macri administration’s economic policy would be seen in the next semester, Peña added, when “the route to slightly improve every variable” that the government is currently taking would become obvious.

As the Herald reported last month, the Central Bank said that the Argentine economy was officially in recession during the second quarter of the year, with GDP contracting 0.9 percent.

Herald with DyN, Télam

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