Nicaragua: Minimum Wage Unchanged

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.

Friday, August 30, 2019

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.

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Alba Luz Torres, head of the Ministry of Labor, explained to that "... such a measure will keep employment stable and for the decision was taken into account the behavior of inflation and variables related to economic growth."

Luis Murillo pointed out that "... although this measure is cautious, taking into account the economic contraction, this will not mean that it will not have an impact on households, which have seen their purchasing power quickly decline. At the end of the day, the most affected are the most vulnerable... it is practically a deterioration in the standard of living of the population and a setback in economic development, because you are condemning people to lower consumption, because prices have risen and wages have remained static, so what families are going to prioritize is basic consumption spending."

The position of the Nicaraguan Foundation for Economic and Social Development (Funides) is that a wage increase will put more pressure on the economy and could generate more unemployment.

After this decision, the issue will return to the debate at the beginning of next year, when it will be discussed again whether or not to apply a rise.

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