Argentina's chemical and petrochemical workers have secured a 37% wage increase this year, though that is still below the rate of inflation in the country's troubled economy.
The Federation of Workers of the Chemical and Petrochemical Industry (Festiqypra), a union umbrella group, said in a statement late Thursday that the increase is retroactive from May 1, adding that the deal includes a one-off bonus of Pesos 8,100 ($542) to be paid at the end of the year.
Unions have been demanding more than 30% salary increases this year after a surge in the inflation rate to more than 40% from 26% in 2015. The faster inflation coupled with hikes of up to 400% in public transport fares and utility rates have crimped consumer-spending power, making it harder to make ends meet.
Festiqypra's secretary general, Ruben Salas, said he had pushed for a more than 40% increase, but said the 37% rise would make the utility rate hikes "more bearable" for workers.
Chemical and petrochemical producers like state-run YPF, Dow Chemical, Indupa and Pampa Energia had sought to contain the wage hikes at 28%, Salas added.
Polymer and synthetic rubber production rose 0.5% in May from the year-earlier month, as plastic goods output increased 3.4% over the same period, according to the latest data of the state statistics office Indec. Over the same period, chemical production fell 4.3% and agrochemicals dropped 16.9%.
The economy fell into a recession this year after four years of stagnation, reducing demand for petrochemicals.
Indupa, a leading PVC producer, said earlier this year that PVC demand fell 20% in the first quarter of 2016 from the year-earlier period.
At the same time, a new government is dismantling import restrictions put in place by its populist-left predecessor between 2011 and 2015, and this has led to a rise in competition from imported products, many of which are priced lower than domestic products.
