The cold has settled into the bones of Buenos Aires. For Isabel Molina, a cleaner in a Palermo office block, the choice was never about comfort. It was about survival. Her gas bill has tripled since President Javier Milei slashed energy subsidies, a centrepiece of his ‘chainsaw’ economic surgery. “I wear four jumpers to bed,” she told me. “My son asks why we can’t have the heater on. I tell him it’s because the president is fixing the economy.”
Fixing the economy. That phrase is repeated like a prayer by Milei’s finance team in their slick presentations to foreign investors. They have indeed delivered a budget surplus for the first time in over a decade. They have crushed inflation from a peak of 211% to a still-crippling 113%. The IMF has offered cautious praise. But on the streets of La Matanza, Argentina’s most populous working-class district, the fix tastes like poison.
Official data shows that the poverty rate has surged past 57%, a level not seen since the catastrophic 2001 crisis. Among children under 14, it is closer to 70%. Soup kitchens, run by churches and community groups, are feeding double the numbers from last year. “We are seeing families who never came before,” said Father Luis, handing out a thin stew from a back-alley kitchen in Lomas de Zamora. “The father has work. The mother has work. But they cannot afford both rent and food.”
The root cause is the removal of price controls and subsidies that, for decades, artificially shielded Argentines from the true cost of living. Milei argues this was a Ponzi scheme that enriched the state at the expense of the people. He is not entirely wrong. The previous Peronist government printed money to buy votes, fuelling the inflation that now torments the poor. But his cure has a brutal triage logic: pain now for a healthier future. The question is whether the patient can survive the surgery.
Wages have not kept pace. The minimum wage, officially around $200 a month, buys just 60% of a basic food basket for a family of four. Pensioners, who rely on state handouts, have seen their purchasing power collapse. Retail sales have plummeted. Construction, a bellwether for blue-collar employment, is in freefall. The only growth sectors are security and debt collection.
“We are living off what we can find,” said Ricardo, a former factory worker now selling empanadas on a street corner in the Once district. He earns less than $5 a day. “You see people rummaging through bins behind the supermarket. That was never like this before.” A generation of young men, barely in their twenties, now survive on the informal economy: washing windscreens, selling counterfeit goods, or worse.
Meanwhile, the government points to falling inflation and a revived stock market as proof of success. It is a story of two Argentinas. The Buenos Aires of steak houses and Recoleta mansions is largely unscathed. The financial elite are bullish. Milei’s austerity has been cheered by bondholders. But in the vast suburbs and the northern provinces, the state has withdrawn like a tide, leaving behind a stranded population.
There is talk of social explosion. Unions, once the power brokers of Argentine politics, have been sidelined. Milei has restricted the right to strike in essential services and threatened to privatise pensions. The mid-term elections are two years away. For now, the people endure.
Isabel Molina switched off her gas completely last week. She cooks on a camping stove. “I voted for him,” she whispered, as if confessing a sin. “I believed things had to change. But this change … I don’t know if I can take it.” Her voice broke. “I don’t know if my boy can take it.”
