Never-ending Struggle for Minimum Wage

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.

Friday, January 4, 2019

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.

In Nicaragua, the government increased by 5% in September last year, even though since April 2018 the country has been plunged into a complex political and economic crisis. See "Rise in Minimum Wage Goes Ahead Despite Crisis"

Last October, it was reported that starting January 1, 2019, Costa Rica will begin to apply for the private sector the 3% increase to the minimum wage. According to the National Council of Wages, after analyzing the proposals approved the increase unanimously.

Regarding decisions on the matter and their impact on the political context in El Salvador, at the beginning of December 2018, Elsalvador.com reported that "... the Minister of Labor, Sandra Guevara, and representatives of the National Minimum Wage Council, affirmed this day that a new minimum wage increase will be analyzed for implementation in 2019. The announcement is given at a time when the political campaign for the elections of the Legislative Assembly and the municipal elections begins." See "Government analyzes new minimum wage increase for 2019".

In Guatemala, the government decided not to change the minimum wage this year. Nils Leporowski, president of the Chamber of Agriculture, said that "... they recognize the political will, since for the first time in more than 20 years, the minimum wage has been set in a technical manner according to the economic reality of the country." See CAMAGRO press release.

The Executive Director of CAMAGRO, Carla Caballeros, explains that "... Guatemala keeps on having one of the highest minimum wages in the region, so the salary established for 2019 will also allow to reduce the gap of competitiveness and real productivity with respect to the minimum wages in force in other countries where Guatemala and therefore Guatemalan workers and producers compete not only to reach markets, but also to attract productive investments."

Some do not share the decision made by the Morales administration. For Luis Linares, an economic analyst at the Association of Research and Social Studies (Asíes), "... the proposal to use the formula was a step forward, but the most appropriate thing would be to measure productivity and be able to include that topic in the discussions because of the decline in the last year. Poverty affects most of the population and one of the means is to improve the working population's income, this government decision is totally unjustified and socially damaging."

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More on this topic

Minimum Wage: Negotiation begins in Panama

October 2019

The union sector aims for a minimum wage of $1,040 by 2020, but employers say the current economic situation does not lend itself to substantial increases.

Workers, employers and government representatives in Panama are discussing adjustments to the minimum wage, the changes to which must come into effect on January 1, 2020.

Nicaragua: Minimum Wage Unchanged

August 2019

Nicaraguan authorities and workers' unions decided not to make changes to the minimum wage, so it will be until 2020 when the issue is discussed again.

Days ago there was tension over the possible increase to the minimum wage in a context of economic recession, but finally the negotiating table decided not to make any change.

El Salvador and the New Government's Plans

June 2019

One of the first actions of El Salvador's new president, Nayib Bukele, was to announce the elimination of four secretariats and the creation of two new ones: Innovation and Trade and Investment.

In El Salvador, the changes that are coming with the arrival of Nayib Bukele to power are beginning to be announced, since at the first meeting of the Council of Ministers it was reported that the Technical Secretariat of the Presidency, the Social Inclusion Secretariat, the Governance Secretariat, the Transparency and Anti-Corruption Secretariat, and the Vulnerability Secretariat, all created during the FMLN government, will disappear.

Guatemala and the Minimum Wage Discussion

December 2018

For agricultural businessmen, the proposal to change the minimum wage discussed nationwide jeopardizes the jobs and incomes of about 500,000 people working in agriculture.

The guild assures that in addition to the 500,000 direct jobs that could be lost, if the proposal is approved, nearly 1 million indirect jobs would also be put at risk.

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