Economist said formal wages lost 17% and explained why "the changueros" are growing

Economist Martin Rapetti stated that formal wages have lost 17% in purchasing power since the start of President Javier Milei’s government, while informal employment, referred to as “changueros”, has grown significantly. According to Rapetti, nearly 14 million individuals earning registered incomes have experienced a decline of between 16 and 17% in their buying power over the past year. This assessment was shared during an interview with Radio Rivadavia, which was later broadcast by NA. Rapetti based his analysis on data from the Argentine Integrated Social Security System (SIPA), which includes records of approximately six million private sector workers, three million public employees, and five million retirees and pensioners. He emphasized that the drop in purchasing power has been consistent since early last year, with a noticeable acceleration in recent months. The economist noted that the impact of this decline is not just its scale, but also its intensity, particularly in the initial phase of Milei’s administration. The situation became more complex after a brief recovery in 2024, followed by stagnation at the beginning of 2025. From mid-2025 onwards, the trend resumed its downward trajectory. Rapetti highlighted that the most concerning aspect is the decline in “disposable income,” which refers to the amount left after all fixed expenses have been paid. While he acknowledged that unemployment has not risen sharply, he pointed out that formal private-sector jobs have decreased by around 240,000 positions. In response to these economic challenges, the Association of Private Insurance Companies (APICC) warned that family debt levels are hindering sales in the province of Corrientes. This suggests that financial strain among households is becoming increasingly pronounced, further complicating efforts to stabilize the economy. Rapetti explained that the decline in formal wages has been partially offset by the growth of informal employment. He described this shift as a rise in independent work, including self-employed individuals and those who operate without contributing to social security systems. These workers, whom he referred to as “changueros,” include people engaged in casual labor or those who manage to make ends meet through other means. Rapetti estimated that this group has expanded by roughly 500,000 people. He cautioned that caution must be exercised when interpreting official salary statistics, as they often include increases in informal income that may not accurately reflect reality. Additionally, he pointed out that the National Institute of Statistics (INDEC) survey collects direct responses about income, which could lead to overestimations due to the reduced inflation rate. The growing reliance on informal employment reflects broader economic pressures, with many families struggling under rising debt burdens. As the situation continues to evolve, experts warn that the long-term implications of these trends remain uncertain, requiring careful monitoring and policy adjustments to address the underlying issues affecting Argentina's workforce and household finances.