The macroeconomic limits of income's policy in a dependent country

Abstract

This article analyzes incomes policies in Argentina. In particular, we study the role of social and wages policies during the years 2001-2008. In this regard we’ll comment on the effectiveness of policies towards the reduction of poverty and show how they are strongly conditioned by macroeconomic policy objectives and by Argentina’s mode of capitalist participation in the world’s economy. Our argument is that the peripherical position of Argentina’s economy and the correlative policy of undervalued real exchange rate and public sector’s fiscal surplus, limit the government’s ability to allow for a clearly pro-poor income’s policy (including social and wages policies). The need for “competitiveness” and foreign debt payments puts immediate pressure on wages, incomes and labour conditions for the working people.