Argentina staged ‘a funeral for wages’

  Under the turbulent global situation, the life of all countries is not easy.
  Some countries, such as Germany, encountered an energy crisis due to war and political factors. They had to count the time to take a shower, and they were chasing after the energy panic brought about by the approaching winter. Some countries, such as Turkey and Argentina, were deeply mired in inflation. The economic dilemma, the inflation rate figures continue to rise, it is difficult to save themselves.
  On September 14, a set of August economic data released by the Argentine government showed that Argentina’s inflation rate increased by 78.5% year-on-year, hitting a new high in 30 years. Not far.
  To make matters worse, the Argentine government raised utility bills in September, a move that will have ripple effects across industries, sending inflation figures even higher. According to forecasts by industry analysts, Argentina’s inflation rate is “on track” to break the 100 percent mark between the end of this year and the beginning of next year.
  The ongoing economic “fever” is afflicting Latin America’s third-largest economy.
“Wage Funeral”

  On August 19, a funeral procession appeared on the streets of Buenos Aires, the capital of Argentina.
  At first glance, the procession appears to have the same composition as a normal funeral procession: people in black mourning clothes, huge coffins and some mourning signs.
  But if you look closely at the signs these people hold, you will find a great difference: mourning crowns on the heads of women in mourning clothes and mourning faces, with the words “Rest in Peace to the minimum wage”; the huge coffin looks light, because There is no deceased person lying there, but a symbol, representing “salary is dead”; there is also a medical checklist of “how salary passed away”, showing in great detail the form of icons in Argentina along the way. How inflation is eating away at the value that wages represent.
  This is a “wage funeral” held by the Argentine people in the face of runaway inflation and an inaction government, expressing the life crisis that all working classes are going through. The funeral procession traveled almost all the main streets of Buenos Aires, and finally ended in front of the Presidential Palace, full of protests and demonstrations.
  The official minimum monthly salary in Argentina is 45,540 pesos (about 2,210 yuan), but if an ordinary family (a family of four with two adults and two children) spends at least 100 per month on food It would cost 111,298 pesos (about 5,400 yuan)—more than twice the minimum wage, and inflation has widened the gap between the two figures.

  The unemployment rate in the whole society has climbed to 43%, and nearly 22 million people nationwide need government assistance.

On August 19, 2022, a funeral procession appeared on the streets of Buenos Aires, the capital of Argentina.

  Compared with the statistics that come late and may have undergone some whitewashing, the people who are living in the sky of rising prices are obviously more directly aware of the changes in their lives than the statistics department – clothing prices have increased by 109% year-on-year, food prices It has increased by 80% year-on-year, which means that you have to spend twice the original price to buy the same clothes, and spend nearly twice the money to eat in the same small shop…
  Salary is like nothing, and basic living needs are gradually becoming incapable of buying, Argentina is good at Welfare policies have also been shut down under the weight of the economy. Previously, Argentina’s welfare policies ranged from wage subsidies to education and medical care, but now, many subsidies have disappeared, but the number of people in urgent need of subsidies to live on is increasing day by day. The sense of powerlessness brought about by inflation affects economic entities large and small. Unemployment has climbed to 43% across the society, and nearly 22 million people across the country need government assistance, while the government is considering whether to cut more subsidies.
  Under such circumstances, whether it is the outbreak of protests, or holding a “funeral” for that little bit of meager wages, joking and reluctantly showing embarrassment, it is the people’s last resort. After all, the wages earned by labor are being buried faster and faster than the skyrocketing prices.
Origin of Peronism

  The peculiar and sad “wage funeral” and the “top-notch” inflation rate that broke the limit have made the world pay attention to the inflation problem in Argentina. However, this problem did not just happen this year, and it is by no means the result of the accumulation of sudden factors such as epidemics and wars.
  Although Argentine President Alberto Fernandez has repeatedly stressed that the current unchecked inflation is a “multi-cause phenomenon”, “depreciation caused by speculators’ rhetoric” and the effects of the “Russian-Ukrainian war”, as long as Argentina’s inflation is affected People who have paid attention to the problem know that these “multiple causes” are just “multiple excuses”.

Former Argentine President Juan Peron and his wife

  Argentina’s high inflation problem has a long history. How to lead an ordinary and industrious country to the point of no return to inflation? The answer given by the former president of Argentina, Juan Peron, is money printing.
  In 1946, the grassroots Peron became the president of Argentina. Because of his personal experience, Peron naturally understands the sufferings of the bottom of society better than other elite presidents and officials, and has devoted more energy to trying to safeguard the interests of the bottom of society.
  There is nothing wrong with this, the president cannot escape his own limitations, not to mention that “focusing on the bottom” sounds extremely politically correct. But Peron’s path to safeguard the interests of the bottom is a bit weird. In short, his method is to “rob the rich and help the poor.”
  At that time, there was a large gap between the rich and the poor in Argentina. In order to solve this problem, Peron carried out a thorough reform: internally, he expelled the capitalists, “robbed the house” and raised wages for workers, and established a super-high welfare security system; externally, set up extremely high trade barriers and levied heavy taxes , so that foreign capitalists are discouraged. Although these operations have completed the redistribution of wealth in a short period of time, and won the support of a large number of working class and people at the bottom, but after all, governing the country is not about roaming the rivers and lakes, and hidden dangers have been buried early.
  The first step was the complete loss of Argentina’s credibility in the international market. Argentina’s wealth accumulation in the past was based on a large number of export trade, but heavy taxes and barriers caused the export value to fall off a cliff, and the national income also fell. In the eyes of ordinary people, it seems that the days of prosperity that have just been balanced are about to be broken again. In order to appease the people, Peron did not reflect on his own governance methods and correct wrong actions that did not conform to the laws of the market. Instead, he chose a more wrong method – printing a lot of money.

  Since then, Argentina has fallen into a vicious circle brought about by “Peronism”: high taxation barriers have resulted in poor exports, a decline in the national economy, the inability to pay high welfare benefits, and public grievances; in order to stabilize people’s hearts and maintain high welfare, they can only start printing money machine; a large number of banknotes flowed into the market, causing inflation and worsening the economic deterioration…
  Peron has long since passed away, but Argentina has continued to rise and fall in the cycle he formed.

  Brazil’s use of currency depreciation to lower prices and make its soybeans more competitive in the international market has dealt a major blow to Argentina’s export earnings.
“Crying” is unstoppable

  In addition to the lingering internal shadows, the shortcomings of Argentina’s original economic growth model are also highlighted in the predicament: the economic structure that is highly dependent on agricultural exports, especially soybean exports, makes Argentina more difficult than those “generalist” countries. Cope with sudden crises.
  In recent years, Brazil, which is also competitive in soybean exports, has used exchange rate depreciation to lower prices, making its soybeans more competitive in the international market, which has dealt a great blow to Argentina’s export earnings. In order to keep the squeezed export share, Argentina can only let the peso depreciate, which makes the already bad inflation even more severe.

Argentine President Alberto Fernandez

Argentine Economy Minister Sergio Massa

  Argentina has entered a new vicious circle: export competitiveness declines and imports increase; the disparity between income and expenditure is too large, and a large amount of debt is used to create a vicious circle; currency devaluation, the ability to repay debt continues to weaken, in order to maintain market share, it can only reduce its value again, or continue The old way of Peronism, turning on the money printing machine…
  Argentina is also thinking of various ways to deal with this “high fever” that is difficult to ebb.
  The first step is to change people. From July to August, Argentina merged the original Ministry of Economy, Production Development, Agriculture, Animal Husbandry and Fisheries into the “United Ministry of Economy” within 30 days, and accepted the advice of former Minister of Economy Batakis. She resigned (she had been a minister for only 24 days) and was appointed by the current House of Representatives president, Sergio Massa, who was a lawyer. In Argentina, which has a “high fever”, everyone knows that it is extremely difficult to advance economic reforms and coordinate departments.
  Massa also warned those who were looking forward to him: “I am not a superman, nor a magician, nor a savior.” The “magic” that cures the disease does not exist, and the effect of substitution is difficult to see immediately, but ” We must resolutely deal with inflation,” is the basic rule.
  On the same day that Massa was appointed, the Argentine Central Bank raised interest rates sharply by 800 basis points. Including the previous 6 interest rate hikes, Argentina has raised interest rates by more than 2,000 basis points this year, and the benchmark interest rate has reached more than 75%. This stimulates national savings currency and reduces circulation.
  But even if the interest rate is raised to such a degree, the people do not seem to buy it – after all, if you open your eyes every day, the price of food may be multiplied by 2 or an extra “0”. The expectations for the future are not optimistic. Quickly spend the money to buy the things you need earlier, or find a way to travel and “spend” the money, which is more refreshing than the rapid shrinkage of the money in the bank.
  How to get out of the inflation trap and how to “stop crying” is the ultimate proposition for every Argentine policymaker.