Electoral Cycles and Minimum Wages in Argentina

We document the evolution of minimum salaries in Argentina during electoral cycles. We argue that incumbent politicians tend to significantly increase the growth rates of minimum salaries a few days before primary elections, and they generally keep them high for a long period until general elections conclude. This is due to the fact that minimum wages are known to be best justified by their social contributions rather than their economic effects. Our findings provide evidence of the strategic tools that are used by incumbent politicians to increase their chances of being re-elected. Our results highlight the importance that incumbents and challengers compete on a level playing field during electoral campaigns, and there are mechanisms in place that guarantee that incumbents do not use strategic tools (such as increases in minimum salaries) for their own benefit just before elections.