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What is behind the crisis of retirees in Argentina?

(CNN Spanish) — Almost three out of four retirees in Argentina receive an income that does not cover the basic basket of the elderly prepared by the Ombudsman for the Third Age.

Julia, 86, explains that “a retiree without means is subject to only one thing: surviving.”

“I worked 35 years of my life contributing. Reaching this age and not getting the salary I deserve hurts,” says Aldo, a 71-year-old retiree.

His case shows an unfortunate naturalization of the crisis.

Aldo says that since he retired six years ago, he doesn’t buy any more clothes and doesn’t eat dinner either.

“I don’t have dinner because it would already be an extra expense that I can’t indulge myself. You naturalize these things and when you naturalize them you no longer need them”, he explained resignedly.

Those of Aldo and Julia are new stories of an old crisis. According to official figures, in Argentina there are 5,701,077 retirees. 47% of them charge the minimum amount. And that is synonymous with “not enough” if the basic basket of the elderly is taken into account. Only 26% of retirees, according to official figures, receive a higher income.

“It’s barely enough because the food is so expensive,” says Julia.

Aldo adds that if he didn’t find any offers at the supermarket, he would come back with an empty monkey. “I don’t buy,” he says.

Inflation is a drama for all Argentines, but retirees have been hit especially hard. In the first semester, prices rose 36.2%, while the increase in pensions reached 29.12%.

In this context, the government announced an increase in pensions, which added to a quarterly bonus, leaves an increase of 34.1% that will become effective as of September. Despite this, the new amount of the minimum retirement would barely exceed half the value of the basic basket of the elderly prepared by the Ombudsman for the Third Age.

Aldo explains that his years in retirement have taught him to focus “on the priorities: eating and staying healthy.” These two tasks were also made difficult because, according to official reports, the costs of medicine, food and home maintenance have grown above retirement assets in the first half of 2022.

What is behind the crisis of retirees in Argentina?

State pensions. They are financed with contributions from registered workers. According to official figures, there are 12,635,000. A government report indicates that the increase in employment recorded in June was the best since 2010.

This size of the workforce yields a proportion of 2 workers per retired household. The economic consultant Idesa shows that it is insufficient and indicates that this proportion should be 4 workers for each retiree so that they receive 82% of the salary they earned while they were in activity, a minimum established by law in Argentina and that is rarely met. This study shows a photo of the present that drags years of imbalances and that needs time to correct itself.

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