The Latin American Report # 207

Argentina: poverty, indigence, and Milei's European models

According to a report shared this Wednesday there were more than 12 million urban poor Argentines at the close of 2023, while a third of them wallowed in indigence, up about three percentage points from the previous measurement. It is to be expected that the picture has worsened as a result of President Javier Milei's harsh fiscal adjustment, a process that promises to strain the consensus in the coming month of April. Although the data belong to the end of the fateful and grimy administration of Peronist Alberto Fernández, undermined by contradictions with CFK and his inaction. Nevertheless, the fall promises to be tougher for those poor—legged by years of economic stagnation—in the new liberal reign, while the support foreseen by Buenos Aires for certain groups would probably be even more insufficient to follow the ever-rising rocket in which the prices of products and services travel. Children under 14 years of age are the most affected group by poverty, with close to 60% of them victims of this scourge.

Returning to the present, a 30-year-old Argentine cook confirmed to EFE that she has two jobs that don't allow her to afford leisure activities. Consumption has been depressed. The people who went to the businesses where she works three months ago were twice as many as now. And she feels it in her paycheck. "I considered myself middle class once upon a time. Now I feel like people who used to be middle class are lower class or poor," she reflects. A nurse in her 40s had to transfer her three children from private education to the public network, and she can no longer spend on recreation either. She even believes that a stroke she suffered in February was triggered by stress "due to financial worries, the children's health, school, and their day-to-day lives". These two women are the faces of the deterioration of the Argentine middle class, which is no longer a homogeneous group but "a collection of fragments". The process, of course, has been cumulative, but "[wages] have had an unprecedented fall," said an expert, who notes that "[there] had not been such a rapid fall in wage levels since the time of the [military dictatorship]".

Europe mode

Within Milei's narrative, once the bottom is hit—it would have to be seen how many can hold their breath until that moment arrives—there is no choice but to go upwards with more force, and take the path that will lead the country to be "like Germany." The problem is that Berlin has its own problems, it's not a paradise. It always worries me that Milei doesn't talk about ending poverty but about adopting a system where there are just fewer poor people. Nearly 17% of Germans are poor, although a reference needs to be made to the still robust welfare system that shelters the vulnerable somewhat. Two-thirds of those "poor" are working people, i.e. not people parasitic on social benefits. In December, poverty "embraced" some 3 million children in Germany, and the homeless crisis increased. In Italy, another country Milei targets heavily—for good—in his rhetoric, 1 in 10 citizens were in "absolute poverty" at the close of 2023, a dynamic to some degree installed "thanks" to certain measures pushed by Meloni, who hosted Milei in Rome this year.

More layoffs in the public sector

The Pink House will lay off 15,000 Argentines at the end of March. I suppose that they are also part of the "caste" or "politics" on whom Milei promised the burden of the adjustment would fall. According to the presidential spokesman, there would be some 70,000 state contracts in review, that would be employed in positions irrelevant to society or that simply cannot be sustained according to the context. "No one wants to do harm, but to purge the public plant and that people do not pay salaries that do not correspond, that is the fairest thing", said Manuel Adorni, also affirming that the audits that are being carried out are "surgical". The logic of capital will operate in the public companies that are privatized. So there will be more Argentines thrown into the lions' den. "In the case of privatization, the employees work with the new owner; if the new owner decides to fire them, it is because they were overworked or were not sustainable in the scheme. In case [the contracts] close, none contributed value to the company", says the Government of La Libertad Avanza. Demonstrations against layoffs in the public sector are planned.

And this is all for our report today. I have referenced the sources dynamically in the text, and remember you can learn how and where to follow the LATAM trail news by reading my work here. Have a nice day.