Weekly Report - 1 September 2011 (WR-11-35)

ARGENTINA | Minimum wage and inflation. The government has increased the minimum wage by 25% to Arg$2,300 (US$518) a month. The scale of the increase is further confirmation that inflation, despite the government’s persistent denials, is running at much the same level, rather than the massaged official figures (just 5.5% for the first seven months of the year) released by the national statistics institute (Indec). President Cristina Fernández claimed that the increase rewarded hardworking Argentines with greater purchasing power (although their new wages will only keep pace with unofficial inflation), which is important less than two months before general elections. Trade unions thrash out annual agreements over revisions to the minimum wage with employers. The fact that neither of them uses official inflation as a reference for negotiations was underscored by the fact that the unions pushed for a 41% increase, and businesses started with an opening gambit of 18%.