(Bloomberg) — President Javier Milei’s austerity campaign in Argentina faced renewed opposition Wednesday during a nationwide march against cuts to higher education.
Most read from Bloomberg
Employees and students at public universities took to the streets to protest Milei’s impending veto of a bill that would raise salaries to offset skyrocketing inflation, which was approved in the House of Representatives in August and the Senate last month.
It is the second mass demonstration organized by unions over the threats to higher education posed by the libertarian’s aggressive cuts. Argentina’s public university system is an almost universal point of pride in the crisis-prone country.
The first protest in April became one of the largest during Milei’s nearly ten-month tenure, involving most age groups and political parties. After that march, the government compensated universities for operational costs but did not take into account salaries, which make up the bulk of expenditure.
In an effort to contain the unrest this time, protesters have been ordered to clear the streets at 7 p.m. local time. The government offered a 6.8% salary increase, which was rejected by public universities, according to a statement from the Ministry of Human Capital.
Salaries at universities have fallen by about 24% in real terms since November 2023, according to Nicolas Lavagnino, head of a research center based at the Universidad de San Martin and the Universidad de La Plata. Higher education spending as a share of gross domestic product has fallen to the lowest level since 2005, according to Empiria, a Buenos Aires-based consultancy.
Milei took office on December 10 and immediately devalued the currency by almost 55%, giving way to monthly inflation of more than 25%, which has since fallen to around 4%. Although salaries have risen slowly in real terms, they have yet to make up for the initial spike.
The bill would increase college salaries to offset inflation in 2024 and then adjust them for inflation in the future, the equivalent of about 0.14% of GDP, according to a congressional budget analysis.
The discussion about university funding echoes the debate that took place earlier this year about pensions and social security. Both houses of Congress passed bills that would offset inflation, and Milei immediately threatened to veto the measures because they would disrupt the budget balance. The president’s pension veto was upheld when lawmakers failed to muster a two-thirds majority to overturn the veto, a victory his administration hopes to repeat 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 get involved in the budget without saying where it gets the resources to spend more.”
Most read from Bloomberg Businessweek
©2024 BloombergLP