In his August 2025 national address, Argentine President Javier Milei boldly claimed his libertarian reforms had lifted over 12 million people out of poverty since December 2023, including 2.5 million children and adolescents. This narrative paints a picture of rapid prosperity through free-market “shock therapy.” However, a rigorous examination of official data and independent analyses reveals this as a fallacy: the purported gains stem from manipulated baselines, inflated social transfers like the Universal Child Allowance (AUH), and creative accounting, rather than genuine job creation or wealth generation. The resounding defeat of Milei’s La Libertad Avanza party in the September 7, 2025, Buenos Aires provincial elections—capturing just 34% of the vote against Peronists’ 47-48%, a gap of 13-14 points—underscores public disillusionment in a region housing 40% of the electorate and many of the nation’s poorest. If millions had truly escaped hardship via sustainable growth, such a voter rebuke would be unlikely. Economy Minister Luis Caputo has defended these figures as evidence of “real progress,” dismissing critics as ideologically biased. Yet, cross-verified data shows the claims crumble under scrutiny.
Manipulated Metrics: Cherry-Picking Baselines to Exaggerate Success
Argentina’s National Institute of Statistics and Censuses (INDEC) measures poverty by comparing household income—including wages, pensions, and social transfers like AUH—to the cost of a basic basket of goods and services. This methodology, while standard, allows for distortion when baselines are selectively chosen. Milei’s administration compares current rates to the 52.9% peak in the first half of 2024—a surge triggered by his own policies, such as a 100% peso devaluation and subsidy cuts. Pre-Milei, in the second half of 2023, poverty stood at 41.7%, affecting about 19.5 million people. By the second half of 2024, it fell to 38.1%, and estimates for the first half of 2025 place it at around 31%—a net drop of roughly 10 points from pre-Milei levels, equating to about 4-5 million people lifted.
Milei’s 12 million figure inflates this by benchmarking against the self-induced peak, implying a reduction from 24-25 million poor to about 12-13 million. Caputo has echoed this, attributing the decline to “structural reforms.” However, this ignores the initial spike: without the devaluation’s fallout, the net improvement is modest. Independent forecasts, like those the UCA Observatory, align with INDEC but note the drop’s fragility, with poverty potentially rebounding if inflation reaccelerates; UCA reported higher figures for 2024 (41.6%), incorporating broader indicators like education and health access.
The AUH Accounting Pivot: “Income” to Artificially Cross the Poverty Line
A core mechanism behind the statistics is the dramatic expansion of AUH, a conditional cash transfer program for low-income families with children, which INDEC explicitly includes in household income calculations. Under Milei, AUH payments surged—doubled in value and expanded in coverage—pushing millions nominally above the poverty threshold without requiring new jobs or wage growth. This contradicts Milei’s anti-welfare stance but bolsters stats: the program covers a significant portion of children and households, with transfers reducing extreme child poverty substantially.
Even Milei himself has acknowledged this. On February 21, 2025, during a presentation to the Inter-American Development Bank (IDB), he argued that poverty “has already fallen to 36 percent due to the strong economic recovery”. Crucially, he credited not only lower inflation and real wage adjustments, but also “real-term increases in the Universal Child Allowance (AUH) and the Plan Alimentar” food assistance scheme. In effect, Milei admitted that welfare expansion—rather than free-market growth alone—played a decisive role in the statistical rebound he touts.
While AUH mitigates poverty (e.g., lifting 1.7 million children per UNICEF), it creates dependency in a context of subsidy cuts and inflation indexing that may understate costs. Caputo may deny manipulation, but the inclusion of transfers as income is undisputed. Without these hikes, the poverty drop would shrink to a fraction of Milei’s proclaimed success, exposing the fragility of his celebrated figures.
Absent Foundations: No Surge in Jobs or Wealth, Just Austerity Rebound
Milei’s reforms stabilized inflation (down to 1.5–2.5% monthly by mid-2025) but came at the cost of recession and rising inequality. Unemployment increased from about 6% pre-Milei to 7.9% by early 2025, driven by 70,000 public sector layoffs and a surge in informal work. GDP contracted 1.8% in 2024, before a rebound in 2025. Real wages lagged initially, while benefits accrued primarily to elites, turning Argentina into a “resource colony,” according to geopolitical analyses. Caputo touts “miracle” growth, yet multiple sources confirm that rising joblessness and economic insecurity tell a different story.
Electoral Verdict: Rejection Amid Claimed Prosperity
The Buenos Aires provincial election defeat on September 7, 2025—which triggered a sharp stock plunge and a drop in the peso—underscores deep discontent among voters affected by poverty. While Milei’s national approval hovers around 50%, in this pivotal province the harsh realities of austerity—soaring informal employment and persistently high child poverty—overshadowed any of his rhetoric. Had 12 million people genuinely escaped hardship through sustainable growth, voter support would have soared instead of collapsing.
Milei’s “lift” is a rebound from a self-made crisis, propped up by social programs—not the libertarian dream that was sold.
