BUENOS AIRES, Argentina – Amid an economy heavily slowed by a drop in industrial production, rising inflation and a rise in poverty, Argentina has now seen another increase in joblessness as President Mauricio Macri’s economic plans continue to sputter.
Macri has endured a difficult 18-month opening period to his administration; his repeated calls to the citizens to wait in restraint for his economic policies to bear fruit have earned him some time but amid deep public cuts, rising inflation and a shrinking economic output, patience is starting to wear thin, especially now that statistics demonstrate a continuing rise in unemployment.
Despite the positive economic image painted by Macri, the latest numbers published by the Institute of Statistics and Censuses (INDEC) indicate otherwise as important legislative elections are set to take place in four months.
According to INDEC, the national unemployment rate at the end of the first quarter of 2017 reached 9.2 percent, a figure that has continued to grow since Macri’s inauguration when it was hovering around 6 percent. It has not only grown but at a fast clip; the unemployment rate grew was 1.6 percent lower in the final quarter of 2016.
The news was significantly worse in Greater Buenos Aires, the conglomeration of suburbs surrounding the capital which is composed of 24 municipalities and boasts a population of well over 10 million people (excluding the Autonomous City of Buenos Aires).
The unemployment in Greate Buenos Aires reached 11.8 percent, which represented another sharp increase from the end of 2016 when the jobless rate was 9.4 percent, representing a rise in 2.4 percentage points.
INDEC described the jump in unemployment as “significant” just weeks after Nicolás Dujovne, Maci’s Economic Minister, said that the labor market was steadily improving without providing any tangible facts and figures.
“We went through a very difficult 2016, especially in the first trimester where we lost almost 100,000 jobs. This process ended in July when unemployment began to fall and in August, we began to recuperate jobs,” the Economic Minister said.
“It is evident that we are in a completely different situation today as there is an economy that is creating jobs, something distinct from 2016 when jobs were disappearing,” Dujovne said in May in an interview with a daily from the northwestern city of Salta.
The unemployment figures, however, clearly show that the economy is not headed in the right direction and has not reversed its downward spiral since Macri’s December 2015 inauguration.
Earlier this year, INDEC released figures that showed that the poor became poorer and the richer became richer during Macri’s first year in office.
According to the Institute of Statistics and Censuses (INDEC), the average income of the most wealthy 10 percent of the population was 25.6 times that of the average income of the poorest 10 percent in the final four months of 2016. Just three months prior, that rate was 23 times.
In specific figures, the average monthly income of the poorest 10 percent in said period was 1.370 pesos or about $85 while the average monthly income of the wealthiest 10 percent was 34,998 pesos or about $2,175.
What has further worsened conditions significantly for the poor are the actions taken by Macri’s government since he assumed the presidency in December of 2015.
Macri has removed the subsidies instituted by his predecessor, Cristina Fernández de Kirchner (2007-2015), and went a step further by adding higher taxes on vital services like public transport fares, electricity and water. The costs of these services increased between 200 percent and 700 percent and Macri has warned of even higher price hikes throughout 2017.
In August, Macri’s government sought to raise the price of gas by 1,000 percent in the middle of a severe cold snap in the austral winter but a series of protests against the measure led to an initial halt to the increase by a federal court. Weeks later, Macri said that a more “moderate” and revised raise of “only” 700 percent was being instituted.
The wealthy businessman-turned-politico born to an Italian billionaire construction tycoon who arrived in Argentina in 1949 has also removed currency regulation (which has led to a 30 percent depreciation in the Argentine Peso), laid off over 150,000 public workers (and warned of more layoffs) and agreed to pay the New York-based vulture funds that have refused to accept restructured loan payments.
An oft-repeated slogan of Macri’s has been to reach “zero-level poverty,” the catchphrase description of his plans for economic growth and security in Argentina.
Statistically speaking, however, his plans have done just the opposite as all economic indicators (including GDP growth, inflation and unemployment) have worsened significantly since his term began. In September of 2016, the respected Observatory on Social Debt at the Pontifical Catholic University of Argentina outlined that 1.4 million Argentines have slipped under the poverty level since Macri took office and that number has surely significantly grown since then.
Macri has repeatedly said that the measures he has taken would be painful initially, but the situation would improve. He said foreign investment should start flowing in, inflation and unemployment would go down and salaries would rise by April. Then, he said that these positive developments would happen in June, then in the latter half of 2016 and then in early 2017. Now, his government is saying that the situation will improve in the second half 2017 but the time on the promises is running out with elections on the horizon.