Volume 43, Number 171,
October-December 2012
The Third Peronist Government’s Economic Plan.
Gelbard’s Term (1973-1974)
Cecilia Vitto
THE CONSEQUENCES OF THE POLICIES IMPLEMENTED.
HOW KEY ECONOMIC INDICATORS EVOLVED ( ...continuation )

In this context, the evolution of the real salary demonstrated some stabilization in the second half of 1973, and with the initial increase in remuneration, levels from the beginning of the year were recovered in June. However, starting in December of the same year, the real salary began to fall, and in this framework, the unions pressured for and “obtained” increases, starting first in April 1974 and then in November of that same year. These increases only managed to maintain purchasing power, as they were quickly and increasingly cancelled out by increases in price levels (Figure 2).

Figure 2. Evolution of the Real Salary, January 1973 — December 1974*
(base January 1968 = 100)


Source: Prepared by the author based on data from Jelín (1977).

In this sense, although the increase in price levels was controlled during the first year of implementation, starting in the second quarter of 1974, inflation began to be a “problem” in terms of the viability of the economic scheme. As proposed by Canitrot (1978: 34), inflation was also associated with renegotiating the Commitment Agreements in March 1974, a situation that, in the context of “imported inflation” and the consequent increase in costs linked to an abrupt change in the international scenario8, reinitiated an exacerbated dispute on income redistribution, because businessmen began to systematically violate the maximum prices established and union organizations began to fight for new salary increases to compensate for growing inflation.

On another level, it can be said that one of the plan’s major economic achievements was to substantially reduce unemployment . While the Triennial Plan estimated that urban unemployment was at 5% in 1974, it fell to 3.4% in October of the same year. In this way the plan practically achieved the goal of reaching full employment. Now, in accordance with the previously reviewed evolution of the product and investment, it can be said that eliminating unemployment was achieved by employing the installed productive capacity (and not through a capital accumulation process), which, once in full use and in a context of increasing consumption, implied new pressures on prices (Ferrer, 1977: 40-41).

8 As a consequence of the outbreak of the so-called petroleum crisis at the end of 1973, the value of imported products rose in the context of price freezes, which resulted in a strong increase in business costs. This was in combination with the defeat of the Bretton Woods agreements, which led to an important international recession with high inflation rates.

Published in Mexico, 2012-2017 © D.R. Universidad Nacional Autónoma de México (UNAM).
PROBLEMAS DEL DESARROLLO. REVISTA LATINOAMERICANA DE ECONOMÍA, Volume 48, Number 191, October-December 2017 is a quarterly publication by the Universidad Nacional Autónoma de México, Ciudad Universitaria, Coyoacán, CP 04510, México, D.F. by Instituto de Investigaciones Económicas, Circuito Mario de la Cueva, Ciudad Universitaria, Coyoacán,
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