Argentine Bankers To Strike For Tax Breaks

Argentine bankers will strike Wednesday to demand tax breaks and bonuses in the latest spate of labor tension as surging inflation eats away at spending power.



"Banks will not attend the public," according to Eduardo Berrozpe, press secretary at the Banking Association labor union, while speaking to Radio Continental.



Bankers want President Cristina Fernandez de Kirchner to increase the exemption threshold for income taxes to preserve spending power, Berrozpe said as the representative of the 110,000-member union.



Many bankers have seen their incomes surpass this threshold – now at 250,000 pesos ($29,500) per year – because wage hikes have kept in line with the 25 percent average rate of inflation between 2010 and 2013. This is reducing their take-home pay becasue of income taxes they previously didn't have to pay.



In addition, inflation in 2014 has accelerated to an annual rate of 40 percent, according to private estimates complied by opposition lawmakers.



The higher inflation, coupled with the additional tax burden, has cut spending power for bankers by between 4 percent and 6 percent this year, compared with 2013, Berrozpe said, while adding that bankers will also demand "a compensation" from the banks which are pulling in "huge profits."



If their demands are not met, the bankers could hold a 48-hour strike in November, Berrozpe said.



The planned strike comes as labor tension rises in Latin America's third-largest economy, which the International Monetary Fund expects to shrink 1.7 percent in 2014 and by 1.5 percent in 2015.



According to the General Labor Confederation, the country's largest union umbrella group, spending power will drop by between 8 percent and 12 percent this year compared with last year.



The confederation has already held two national strikes this year, with more than one million workers walking off the job in April and August. The union group is planning another strike later this year.



The government, however, has said that salaries are increasing and inflation decreasing.



"There hasn't been a decline in real salaries," Commerce Secretary Augusto Costa said last week on Radio America.



He added that private estimates of 40 percent annual inflation are "not serious," without saying what the official estimates are of annual inflation. The government's national statistics agency said last week that consumer prices rose 1.4 percent in September compared with August, and were up 19.8 percent compared with December 2013.



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