The Confederation of Education Workers of Argentina will take to the streets Wednesday to protest President Mauricio Macri’s decision to not raise wages in line with inflation.
These protests will mark a serious struggle between not only the working class and elites of Argentina, but another moment in the ongoing fight against neoliberal reforms around the world. Such reforms are unapologetic in their intent to crush the political power of normal people in order to make life for elites more comfortable.
The election of President Macri, a right-wing businessman who won November’s runoff election by a weak 3-percent margin, signals a resurgence of neoliberal, market-friendly policies to Argentina.
The centerpiece of Macri’s economic plan involves a devaluation of the nation’s currency, with the hope that devaluation would solve Argentina’s current indebtedness to the United States and the International Monetary Fund.
The problem is that Argentina’s debt is not large by historical standards or in comparison to other South American countries. Also, the country’s reserves could pay off its current debt, which it would only have to do in a hypothetical situation.
So, what then underlies Macri’s plans for devaluation?
The answers hide in the fundamentals of neoliberalism waging economic war on the people for the sole benefit of the elites.
Devaluation will result in inflation and a recession, both of which lead to lower real wages and the weakening of labor power.
If you don’t believe me, consider that the inflation endangering the purchasing power of Argentina’s teachers is a direct result of President Macri’s calls for devaluation.
Inflation in Argentina has risen from 14.3 percent to 46 percent in the ten short months since Macri’s election.
Furthermore, the crisis caused by Macri’s policies would reduce government revenues and, in turn, justify structural fiscal readjustment, also known as austerity.
We have witnessed what the politics of austerity have done to the workers of the U.S. and Europe. Austerity has included cuts in education, environmental regulation and social services.
In the U.S., there is a familiar relationship between inflation and wages amidst extreme austerity cuts. U.S. wages have remained stagnant for decades, despite huge changes in inflation over the same period. Meanwhile, corporate profits and CEO pay are at record highs.
The technique of wage repression goes deeper, especially when lower wages should mean lower levels of consumption, which isn’t the reality.
This problem was solved by a little invention called the credit card. That way, the populace can keep consuming and spending, even if they don’t have any real money of their own.
These are tactics of an economic war against the people, a war waged purposefully by the elites and made possible through institutions like the IMF.
Neoliberalism works to indebt the people to the point of no return, and, if you crush the labor unions, the people have no organized way of fighting back.
I believe the teachers of Argentina see what will happen to them and their country if President Macri’s scheme of devaluation succeeds.
It is my opinion that we could stand to learn a lesson or two from them and start resisting the forces that seek to exploit us.
luwrobin@indiana.edu
