Milei Vetoes University Pay Raise After Protest in Argentina
(Bloomberg) -- President Javier Milei vetoed a bill that would have raised salaries at Argentina’s public universities to compensate for sky-high inflation, a day after a mass demonstration against his austerity campaign.
Most Read from Bloomberg
NYC Schools Reverse Course on Cell-Phone Ban After Parents Balk
Roofs of Mexico City’s Massive Food Market Will Power Public Buses
Mexico City Restricts Airbnb Rentals to Curb ‘Gentrification’
An estimated 270,000 university staff, students and labor activists took to the streets Wednesday to protest against Milei’s veto, which he signaled was forthcoming after the spending bill was approved in the House in August and in the Senate last month. The veto was made official in the national gazette Thursday morning.
Organized by labor unions, it was the second mass demonstration over threats to higher education posed by the libertarian’s aggressive spending cuts. Argentina’s public university system is a nearly universal point of pride in the crisis-prone nation.
The first protest in April swelled into one of the biggest during Milei’s nearly 10-month term, with around 430,000 attendees spanning most age groups and political parties, according to estimates by La Nacion. This time, the unions summoned about two thirds as many participants, the newspaper reported.
After the first march, the government compensated universities for operational costs but failed to account for salaries, which make up the bulk of spending. It has since offered a salary increase of 6.8% that was rejected by the universities, according to a statement from the Human Capital Ministry.
University salaries have lost about 24% in real terms since November 2023, according to Nicolas Lavagnino, who heads Grupo EPC at the CIICTI research center based out of Universidad de San Martin and Universidad de La Plata. As a proportion of gross domestic product, higher education spending has sunk to its lowest level since 2005, according to Empiria, a Buenos Aires-based consulting firm.
Milei took office on Dec. 10 and immediately devalued the currency by nearly 55%, giving way to more than 25% monthly inflation that has since fallen to around 4%. While salaries have been slowly rising in real terms, they have yet to make up for the initial spike.
The bill would have increased university salaries to make up for 2024 inflation and then adjust them for inflation going forward, the equivalent of about 0.14% of GDP, according to a congressional budget analysis. Lawmakers will now have a chance to reconsider the proposal after Milei’s veto.
The discussion over university funding mirrors the debate that took place earlier this year over pensions and social security.
Both houses of Congress approved bills that would compensate for inflation and Milei immediately threatened to veto the measures because they would throw off the budget balance. The president’s pension veto was sustained when lawmakers were unable to muster a two-thirds majority to overturn it, a victory his government hopes to replicate again this time.
“This has all the same elements as the social security discussion,” said Luis Picat, a national congressman from Cordoba province who voted against the budget expansion. “Congress can’t meddle in the budget without saying where it’ll get the resources to spend more.”
(Updates with Milei veto, protest turnout estimates.)
Most Read from Bloomberg Businessweek
Rotting Rice in India Fuels Discontent About Modi’s Food Policy
Elon Musk’s Role in Reanimating the Far-Right Term ‘Remigration’
©2024 Bloomberg L.P.
