With the recent signing of the U.S.-Canadian-Mexican trade agreement, a precedent was set for future negotiations, as this agreement sets binding labor conditions, such as making exports subject to the payment of a minimum wage.
For example, one of the conditions of the Treaty between Mexico, United States and Canada (T-MEC), which was signed on December 10, 2019, is that vehicles exported from one state of Mexico to the other two countries "must come from plants that pay wages not less than $16 an hour.
In recent years, the sector in Guatemala has lost nearly 30,000 jobs, because the high costs resulting from having one of the highest minimum wages in the region, makes it more profitable only to export raw materials, rather than making them in the country.
Vestex figures show that in recent years several jobs have been lost in the sector, given that between 2006 and 2018 the industry lost a considerable number of jobs, going from 82,109 to 53,636 places, equivalent to a 35% decrease.
From January 1, 2019, the minimum wage increase came into effect, which will be paid in accordance with economic activities and company size in relation to the number of workers.
From the COHEP statement:
The Honduran Council of Private Enterprise (COHEP), with the purpose of informing Honduran companies and society about the Minimum Wage Agreement that will govern the country during 2019 and 2020, announces the following:
The determination of how much and how the minimum wage should be regulated, something that occasionally seems to be done in an arbitrary manner and for political purposes, continues to be one of the factors that most confront Central American businessmen and governments.
In Costa Rica, a 3% increase in the minimum wage was approved for 2019; in El Salvador, an increase is expected to be discussed, and in Guatemala, the commission in charge of the issue reported that no increases will be made this year.
The increases range from 3.9% to 6.15%, depending on the number of employees on the payroll and the economic activity to which the company is dedicated.
The increase applies from January 1, and will be 3.9% for companies with between 1 and 50 employees, 5.5% for those with between 51 and 150 employees, and 6.15% for companies that have more than 150 workers.
The increase that applies to companies with 50 to 150 workers on their books is 5%, and for companies and with more than 150 employees, the setting is 6%.
From a statement issued by the President of Honduras:
The labor and business sectors and the government of President Juan Orlando Hernandez signed an agreement on the new minimum wage for the period 2017-2018.
Bowing to pressure from those who can choose what to eat every day, the Morales administration has repealed the differentiated minimum wage, denying the right to choose how to live to those who do not have that option.
EDITORIAL
President Morales has put an end to an initiative that aimed to attract investment to four municipalities by applying differentiated minimum wages, yielding to the the high profile power of those who, from the comfort of a heated office and while receiving thousands of dollars in salaries each month, feel that it is reasonable remove the possibility of having a job from those who have nothing.
With businesses opposed to the raise, the Labour Ministry has confirmed an increase of between 5.5% and 8% in the different categories of minimum wage.
The minimum wage for 2016 has been set as per the agreements of the tripartite commission agreed, even though the private sector has called for a review to take into account inflation.
From the comfort of a heated office and after receiving thousands of dollars in salary at the end of every month, well-intentioned people are trying to take away from those who have nothing, the possibility of having a job.
EDITORIAL
The indispensable struggle for the dignity in jobs and the eradication of slavery of the people living under a wild form of capitalism, has led to the introduction of minimum wages in modern societies.
In Guatemala people are now suffering from the "labor agreements", which come from the same strain of virus as the "Collective agreements" which have made the State Costa Rica sick, distorting the labor market and generating inequality.
EDITORIAL
The editorial "Harmfulness of labor agreements in the public sector", published today on Elperiodico.com.gt, might have been written some years ago to describe Costa Rica. Guatemala still appears to have a chance to react to the disease, with proper medication. In Costa Rica, however, the disease is so widespread that major surgery is needed which today does not seem feasible, and the only thing left is to wait for the inevitable final crisis.
In a context of high unemployment and informal work any increase in the amount of the minimum wage produces more unemployment, more informality, and consequently, more poverty and inequality.
In Costa Rica, the latest numbers released by the National Statistics Institute (INEC) located unemployment during the first quarter of 2015 at 10.1%. If you add those who are not unemployed but who have informal jobs, which is 45.3% of the working population, you can tell why almost half of the population in Costa Rica who wants to work do not get better incomes if the minimum wage is increased.
In Honduras and Nicaragua the cost that a company must assume to formalize a worker amounts to more than 70% of what they will produce, while in Costa Rica, El Salvador and Panama, it is just under 40%.
From a statement issued by the Inter-American Development Bank (IDB):
Formalizing a worker in Latin America costs 39% of what they produce
Wage and non-wage costs relative to productivity, are 50% higher in Latin America than the average in OECD countries.
Before negotiating a new amount for the minimum wage in Panama, the Chamber of Commerce, Industries and Agriculture notes that "those who strive more should receive more."
From a statement issued by the Chamber of Commerce, Industries and Agriculture (CCIAP):
With the establishment of a table for revision of the minimum wage, involving business associations and workers in mediation with the government, a process has been started that we hope will be carried out in accordance with the spirit for which this provision was set.
Trade unionists who promote it, the officials who estimate it, the rulers who decree it, are not part of the legion of unemployed who surely would work for less than the official minimum wage.
EDITORIAL
The unemployed have no voice, in principle because they do not pay a sindical fee, and if they did have one, they would not raise it, because it feels devoid of the dignity necessary to do so, because they are used to adopting a very humble position in job interviews. Nothing further impoverishes the human spirit that lack of gainful income of one form or another.
The Ministry of Labour and Social Security has updated the structure for minimum wages for different productive sectors, with effect from January 2015.
From a statement issued by the Ministry of Labour and Social Security of Honduras:
As of January 1, 2015, employees who are affected by the general minimum wage have an automatic increase in salary ranging from between 5.3% and 8%, depending on the number of employees the company has and its activity, as announced by the Secretary of State in the Ministry of Labour and Social Security, Carlos Madero Erazo.