The social cost of the chainsaw: the middle class lost purchasing power in Javier Milei's first year in office.

A new study from the University of Buenos Aires ( UBA ) revealed that middle-class families faced a severe blow to their household finances during the first 12 months of Javier Milei 's administration. The main problem was uncontrolled increases in the prices of basic services such as electricity, gas, water, and transportation, which rose much more than salaries during this period.

Research from the RA Center at the University of Buenos Aires (UBA) showed that in 2024, middle-class families had to allocate 59% of their income to paying utilities, a figure that had been 49% the previous year. This means that 6 out of every 10 pesos they earn now go to paying utility bills, leaving less money for other important expenses such as food, clothing, or entertainment.

The numbers are alarming: services became 33% more expensive than goods in general. While families struggled to keep up with inflation, the costs of basic services soared uncontrollably. In the City of Buenos Aires, for example, gas prices increased by 631%, transportation by 707%, electricity by 390%, and water by 350%. In comparison, food prices increased "only" 129%.

To remain in the middle class by 2024, a person needed to earn between $372,000 and $1,192,000 per month in the third quarter of the year. This represented a 125% increase in income since Milei's administration began. However, average wages only grew 119% in the same period, falling short of what was needed.

The situation forced many middle-class families to radically change their lifestyles. They had to cut back on expenses, buy lower-quality products, and give up activities they had previously considered normal. The study warns that this "forced redefinition of lifestyle" profoundly affected a sector that has historically been key to the country's social stability.

Although there were some signs of wage recovery toward the end of the year, experts believe it was not enough to offset the accumulated damage. The University of Buenos Aires (UBA) warned that this situation raises "serious questions" about the economic future of the Argentine middle class and its ability to maintain its traditional standard of living.

The report concludes that the middle class of Argentine society is going through one of its most difficult times in recent years, with severely deteriorating purchasing power that puts the sustainability of this fundamental social group at risk. The question remains whether current economic policies can reverse this trend in the near future.