Macri's Real Problem: Paychecks Fail to Keep Up With Price Hikes

(Bloomberg) -- President Mauricio Macri already faces an uphill battle to re-election next year between Argentina’s recession and currency crisis. Now add wage growth issues to the mix.

The inflation-wage growth mismatch is widening, a surefire way to infuriate voters. For August, wages rose a year-on-year 21.9 percent, according to government data published Wednesday. Macri’s problem is that inflation for the same month clocked in at 34.4 percent with more pain expected: economists surveyed by the central bank see that hitting 44 percent by December.

Macri's Real Problem: Paychecks Fail to Keep Up With Price Hikes

The price increases are hitting pockets hard. Food and beverage prices were up 33.5 percent in August, while utility prices -- deeply affected by the government cutting back on subsidies -- soared 52.8 percent.

Unsurprisingly, Macri’s approval rating has stumbled to the lowest mark of his presidency. New figures published Wednesday show his approval rating in October stood at 1.76 on a scale of 1 to 5, according to a benchmark poll published by the University of Torcuato di Tella and Poliarquia Consultores. It was up a hair from 1.75 in September, but a full point lower than the 2.83 from a year ago and nowhere near the 3.14 at the beginning of his presidency.

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