Labor Day

Yes, Labor Day is celebrated on May 1 here. Apparently Canada and the USA are the only countries where it’s celebrated on the first Monday in September. In honor of Labor Day, I decided to do a little bit more investigation into the cost of living and wages in Argentina.

The minimum wage in Argentina, as of February 2013, is 2,875 pesos. This converts to $555.17 USD (official conversion rate) – more on conversion rates here. So, the minimum wage in Argentina is the equivalent of $555.17 per month, and Argentinians making under 3,346 pesos monthly do not pay any income taxes.

Minimum wage in Wisconsin is the same as the national minimum wage, $7.25 an hour. If you work 40 hours per week, you make $290 per week. With four weeks per month, it comes out to $1,160. Income tax in Wisconsin for someone making minimum wage is $486.22 + 6.15% of the amount over $10,570.

The minimum wage worker makes $13,920 per year — meaning they make $3350 beyond that $10,750. So, they end up paying 486.22 + .0615(3350) = 486.22 + 206.03 = $692.25 in taxes. Diving that number by 12 (months per year), you get $57.68 in taxes per month, bringing the monthly minimum wage in Wisconsin to $1102.32. This means that the minimum wage worker in Wisconsin makes TWICE as much as he/she would in Argentina.

The Work Week

The work week here is quite different from that in the US. Most US offices operate from 9 to 5, or 8:30 to 4:30 with a half-hour or hour break for lunch. Salta offices operate from 9 to 1, and 5 to 9. Meaning that salteños work about the same amount of time per week as Wisconsinites, but the hours are extremely different. This schedule goes for professionals like doctors, dentists, etc., retail associates who work at stores around the city, etc. (the mall and huge grocery stores have full schedules similar to the US).

Shopping

I am not an economistFor the following comparisons, I just picked random products, found them in USA and Argentina, and am putting them here for comparison’s sake only. The food products from the USA are all from Pick ‘N Save and are in the advertisement this week so they are sale prices. The food products from Argentina are from Jumbo and are in the online shopping part of their website. They are not on sale. The Argentinian product is listed first, the US product listed second. I put a star by the cheaper product.

Bread

Captura de pantalla 2013-05-01 a la(s) 13.43.55

17.99 pesos = $3.48 for 650 grams of bread (about 22 ounces)

Captura de pantalla 2013-05-01 a la(s) 13.47.57

*$1.99 = 10.35 pesos for 20 ounces of bread

Orange Juice

Captura de pantalla 2013-05-01 a la(s) 13.51.14

9.49 pesos = $1.84 for 1 liter (33 ounces) of Tropicana OJ

Captura de pantalla 2013-05-01 a la(s) 13.51.28

*$3.99 = 20.64 pesos for 89 ounces (2.63 liters) of Tropicana OJ. This would convert to $1.48 for 1 liter.

Avocados

Captura de pantalla 2013-05-01 a la(s) 13.53.26

*24.90 pesos = $4.83 for 1 kilogram of avocados. There are about 6 avocados per kilogram

Captura de pantalla 2013-05-01 a la(s) 13.53.39

$.99 = 5.12 pesos for 1 avocado, or 30.72 pesos for 1 kilogram

Flour

Captura de pantalla 2013-05-01 a la(s) 14.02.01

*4.29 pesos = $.83 for 1 kg, or 2.2 lbs of flour

Captura de pantalla 2013-05-01 a la(s) 14.02.08

$.99 = 5.12 pesos for 2 lbs of flour

Laundry Detergent

Captura de pantalla 2013-05-01 a la(s) 14.17.10

$11.99 = 62.08 pesos for 100 ounces, or 31.04 pesos for 50 ounces of detergent

Captura de pantalla 2013-05-01 a la(s) 13.57.20

*29.65 pesos = $5.73 for 1.5 liters, or 50 ounces of detergent

Smartphone

Image

3,499 pesos = $676.33 for a white Samsung Galaxy SIII with a new phone plan at Movistar

Image

*$99.99 = 517.29 pesos for a white Samsung Galaxy SIII with a new phone plan at AT&T

LCD TV

Image

3599 pesos = $695.66 for a 32″ Samsung LCD TV at Carrefour

Image

*$288 = 1489.96 pesos for a 32″ Samsung LCD TV (same model) through Amazon.com

Running Shoes

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719 pesos = $138.97 for Nike running shoes at Sporting

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*$99.99 = 517,30 pesos for Nike running shoes at Women’s Foot Locker

Public Transportation

saeta

2.50 pesos = $.48 for one bus ride in Salta

$2.25 = 11.64 pesos for one bus ride in Milwaukee

Average of 3000 pesos = $579.87 USD in Salta.

Average of $640 = 3277 pesos for a 1-bedroom apartment in Milwaukee county.

The Roundup

  • Electronics are much more expensive in Argentina.
  • Food products in Argentina end up being about the same as the USA… even though the Wisconsin minimum wage worker makes twice as much as the worker in Argentina.
  • Public transportation in Salta is much cheaper than in Milwaukee.
  • For rent, the average rent in Salta is 4% HIGHER than (104% of) the minimum wage. And in Wisconsin, the average rent is 58% of the minimum wage.

I think that the rent comparison is the most striking of all. This means that the average minimum wage worker in Salta cannot even AFFORD the average rent per month with how much money they make. Salteños make half as much as Wisconsinites, but food is about the same and electronics are more expensive.

My Thoughts

The cost of living in Salta is really pretty similar to that in Wisconsin. But the minimum wage here is half of that in Wisconsin. Another important thing to consider is that inflation measures around 20% every year. So prices and rent keep rising, while minimum wage isn’t increasing at nearly the same amount. It’s getting harder and harder for salteños to get by on the salaries they make, and there’s also a huge inequality here with a handful of extremely, extremely rich people and then everyone else. For the rich, it’s easy to get by in Salta. But for everyone else, it’s harder and harder to make ends meet and still maintain a standard of living here. Argentina is consistently praised for having the highest minimum wage in Latin America. It does. But it still isn’t high enough for salteños to get by on.

This Labor Day, let’s remember that although the USA does have a lot of issues with poverty, the minimum wage there goes a lot farther than it does here and that Argentina needs real labor reform to go along with the inflation.

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