Bad Time to Standardize Salaries

Costa Rican businessmen warn that the government's decision to standardize wages in 2020 will lead to more unemployment, affect workers with less education and reduce competitiveness even further.

Monday, November 18, 2019

For the business sector is imprudent to approve and implement the wage standardization in 2020, since it will have a strong impact on productive sectors such as agriculture, trade, transport, tourism and construction, explains a statement from the UCCAEP.

From the UCCAEP statement:

November 17, 2019. The government's decision to standardize salaries now will lead to an increase in unemployment, hit workers with less education, generate loss of competitiveness and will be a severe blow to economic activities that are frankly slowing down, warns the Costa Rican Union of Chambers and Associations of Private Enterprise (UCCAEP).  The economy will receive a strong impact this Monday at 4 pm with the firm approval of the start of this wage standardization.

"Without business support, but with the votes of trade unions and the government in the Superior Council of Salaries, this homologation was ratified last week, whose entry into force, from July 2020, would be very serious", warned the interim president of UCCAEP, Álvaro Saenz.

Saenz stressed that the scheme composed of the 2.54% annual increase decreed the previous month, plus the homologation, together with the next increase in the employer's contribution to the CCSS's I.V.M. regime, would raise minimum wages well above inflation.

Read full statement (In Spanish).



More on this topic

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The Panamanian business sector believes that increasing the minimum wage under current conditions will generate more unemployment and increase informality in the labor market.

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Costa Rica: Minimum Wage Adjustment of 35%

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The draft Minimum Living Wage Act under discussion in Costa Rica eliminates the wage adjustment formula agreed in 2011 and could mean a rise of 35% in the minimum wage in the private sector.

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Costa Rica: More Informal Employment

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In the last year the number of people with jobs outside the formal market grew by nearly 3%, showing the deterioration of the competitiveness of the Costa Rican economy.

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Want More Unemployment? Increase the Minimum Wage

March 2015

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.

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