The recovery which started in September 2009 has come to an end in March 2010 and since then, more than 3,000 jobs have been lost.
The global economic crisis of 2008 caused the disappearance of 50,000 jobs in the private sector. Recovery began in September 2009 through March 2010 generating 36,000 new jobs. But since then, private employment has begun to fall again.
The business sector agrees with unions in the need to modify the current scheme, but differ in how to implement it.
Unions want changes “that recognize past inflation and at least half the expected inflation for the current year”, said Mauricio Castro, director of the National Association of Public Employees.
Businesses prefer to promote a unified minimum salary, allowing a dignifying lifestyle for any worker, whatever their job is.
The bill was finally passed by the Costa Rican Legislative Assembly, all that remains is Oscar Arias' signature and its publication in the official government newspaper.
With 44 votes in favor, the law was passed on Thursday 17.
"This bill broadens the existing Free Zone Law, by adding a new category for manufacturing companies. It specifies incentives and clear regulations, but also puts the country in line with a WTO Agreement covering subsidies and compensatory measures", reported El Financiero.
Starting January 1, 2010, all private workers earning minimum wage must have their salaries increased 5%.
Representatives of Costa Rican Worker Unions had requested a 7.74% increase, whilst the Union of Business Chambers and the Private Enterprise had offered 3.9%.
Gessa employees in Costa Rica will work one day less per month and they will see their salary reduced proportionately.
The management and employees of the administrative and logistics sector company agreed not to work the third Friday of each month in an effort to cut costs and avoid personnel layoffs.
A survey by UCCAEP of 405 companies from various sectors revealed that there will probably be more unemployment in the second half of the year.
Hassel Fallas wrote in an article in Nacion.com: "Shirley Saborío, director of UCCAEP (Costa Rican Union of Chambers and Private Enterprise Associations,) explained that the survey presented yesterday revealed that the index of business confidence in employment for the second quarter is 4.12 points out of a possible 10. During the same period in 2008, it was 6.15.
The Bank does not see a reduction in interest rates, especially in colones, while there is no decrease in inflation.
Marvin Barquero published in the Nacion website: "Given that banks have the resources to lend, the businessmen request to reduce the minimum legal deposit (percentage of public deposits that banks must keep as backup) was virtually ruled out.
Given the current economic climate, distrust and pessimism has taken over Central American Business.
El Salvador published on its website: "While there are very particular circumstances in each country, a very promising future is not foreseen. One of the things that hinder economic development is the decline in credit and sales which has resulted in job losses. These are some of the findings of various studies that measure the perception of entrepreneurs in the region ran by private and government entities. Theses feelings were shared in a video conference organized by the Central American Economic Integration Bank (BCIE)."
The study is related to the quarterly survey "Business Pulse" by the Costa Rican Union of Chambers and Associations of the Private Business Sector.
El Financiero, in its website, publishes: "The consumer confidence [index] measures the expectations for the first quarter of the year (January, February, and March). The score is measured from 0 to 10 in five categories: poor (0 – 2.5), same as poor (2.5 - 5), same (5), same as well (5 - 5.75) and very well (7.5 - 10). The sectors in which the decline in confidence was greatest are commerce and tourism."
In response to the economic crisis the Government is proposing to make the work day more flexible in order to minimize layoffs.
According to nacion.com "the bill proposes creating new two work days: a 12 hour day with 3 free days per week and an annualized work day. This will allow for 10 hours when there is a lot of work and a maximum of six during the low season, and this way the workers will at no time get less than the minimum wage.
The project allows for citizen consultations to be called for projects related to the environment and this caused protests from the business sector.
The minister of the Presidency, Rodrigo Arias, announced today that they have decided to totally veto the law which was unanimously approved by Congress.
The Costa Rican Chamber of Industry warned that they have grave doubts with regard to the FTA with China saying it would be preferable to enter into a partial agreement.
Juan Maria Gonzalez, President of the Chamber indicated that China's interest in Costa Rica is not commercial, but rather geopolitical and that when these two plans mix results are not good.
The business sector is warning that the Costa Rica could enter a crisis of massive layoffs if they cannot finance their activities.
The warning is based on the scarcity of credit both from the public and private banks, which is causing many companies not to have sufficient financial resources to continue operations or expand.
Representatives of the Unión Costarricense de Cámaras y Asociaciones de la Empresa Privada (Uccaep) met with their associates to explain the urgent need for credit.
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