Guatemala: Victory of the Privileged

Bowing to pressure from those who can choose what to eat every day, the Morales administration has repealed the differentiated minimum wage, denying the right to choose how to live to those who do not have that option.

Tuesday, February 2, 2016

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.

The main argument of opponents of the differentiated minimum wage is that the amount does not provide enough for the highly official "basic food basket" established by bureaucrats in power, who assume the right to decide how much each Guatemalan should eat, without every worrying about what form of employment will provide them with the money to do so. They say that the differentiated minimum wage would only provide enough for 16 days out of the month, therefore it is inconstitucional. They would prefer that some Guatemalans - not themselves of course - do not eat on any days of the month, rather than eat for 16 ... According to World Bank data, in Guatemala the percentage of the population in conditions of malnutrition is 14%.

Agreements 304 307-2015 have been repealed, documents which established differentiated wages for the municipalities of Masagua, Escuintla; Estanzuela, Zacapa; Guastatoya and San Augustine Acasaguastlán, El Progreso. Although the approval of the initiative had been temporarily suspended by the Constitutional Court, in order for it to be eliminated completely a repeal was needed by the Executive Power.

Prensalibre.com reports that "... The repeal became official with the publication of Government Agreement 35-2016, which will take effect from Wednesday 3 February. It specifies that differentiated wages 'are not consistent with the principles, rights and social guarantees that our Constitution guarantees.'"

With the repeal, an end has been put to an initiative aimed at providing better opportunities for development in remote areas of the capital and places that are unattractive for private investment, by allowing businesses to pay wages below the official minimum.

See "It is easy to talk about differentiated minimum wages" and "What salary is lower than the one you do not have?"



More on this topic

Alternatives to Differentiated Wages

February 2016

After the government repealed differentiated wages, the Guatemalan business sector will be proposing new options such as work paid by the hour and other initiatives to promote investment and employment.

Entrepreneurs will not stand idly by and will be proposing new alternatives for flexible working hours and wage schemes to improve conditions and attract more investment to the country, especially in areas far from the capital.

Guatemala: Backwards Step for Differentiated Salaries

September 2015

A declaration of unconstitutionality has been given to the initiative aimed at attracting investments in four municipalities in the country by setting minimum wages lower than the national level.

The proposal sought to establish a wage below the national minimum in the municipalities of San Agustin and Guastatoya Acasaguastlán, El Progreso; Estanzuela, Zacapa, and Masagua, Escuintla, in order to encourage the establishment of companies and job creation in those areas.

What Salary is Lower Than The One You Dont Have?

April 2015

In the discussion taking place in Guatemala on differentiated wages, voices are being heard, speaking from the comfort of their desks, framing the issue as an all or nothing situation.

EDITORIAL

Juan Carlos Tefel, Director of the Board of the CIG and General Manager at Fogel, discusses with entreprenureal pragmatism but also social sensitibility the issue of the definition of differentiated salaries for some Guatemalan communities that have "a high rate of unemployment and 'real' income well below the minimum wage. "

Guatemala: Differentiated Minimum Wages Needed

March 2015

The Executive argues that foreign companies planning to invest in the country desist from doing so if they are not provided with tax incentives and the possibility of paying differentiated wages.

The Government is continuing to put pressure on Congress to approve the Investment and Employment Act which has been temporarily suspended due to several actions of unconstitutionality presented before the Court.

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