70% of wage increases lost due to inflation in October

The median wage adjustment was 1.8 percentage points lower than inflation in October. This is the biggest real loss since the start of the year. Photo: Geraldo Bubniak / AENPR

The vast majority of wage readjustments with a benchmark date in October have been below inflation, with a loss in worker purchasing power.

According to the Salariometer bulletin, from the Foundation of the Institute for Economic Research (Fipe), 70.1% of the collective negotiations of the month lost to the benefit of the INPC accumulated in 12 months. In 17.5% of the negotiations, the wage increase was equal to the cumulative inflation, and only 12.4% resulted in a real gain, above the price index.

The median readjustment over the month is 9%, or 1.8 percentage points below the cumulative INPC in 12 months (10.8%). This is an aggravation compared to the previous months. Between January and September, actual results ranged from zero (median readjustment equal to inflation) to -1.5 percentage point.

In real terms (that is, after updating the price index), the adjustments were zero or negative in all activities and in all states, according to the bulletin.

Data on collective bargaining is taken from the Mediator page of the Ministry of the Economy, where all collective labor agreements and agreements are filed.

According to the Salariometer, projections indicate that the INPC tends to hold between 10% and 11% until May of next year, suggesting that readjustments will continue to be slim next year. For the November benchmark date, Itaú and Santander banks are forecasting 11.5%. For December, Santander forecasts 10.7% and Itaú, 11.3%.

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