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Argentina: Labour disputes

High levels of discontent over the impact of inflation on wages fuelled an increase in union activism during 2014, pushing up business continuity risks for the private sector in Argentina. Rising living costs, reflected in non-governmental estimates of 27% year-on-year inflation as of September 2015, have reduced Argentines’ real wages. Unions continue to demand salary increases of at least 30%, to increase after-tax incomes, but primarily to offset falling real wages resulting from excessively high price increases since early 2014. While the rate of price increases has slowed down from the remarkably high rate of 35% year-on-year inflation registered in December 2014, the underlying issue of rising prices will not be resolved in the long-term without addressing wider macroeconomic challenges. The risk of labour unrest will therefore remain high throughout 2015 and early 2016, particularly as unions look to protect the disposable incomes of low-paid workers.