After Panama's National Assembly approved a legislative bill that sets the minimum wage for workers in the maritime industry at $4.15 per hour, local businessmen have expressed their disagreement.
The document approved in third debate, establishes in its articles that workers of concessionary companies, contractors and subcontractors of ports and maritime transport terminals will earn a minimum wage of $4.15 per hour throughout the national territory, informed the National Assembly on April 12, 2021.
The average rise is 3.3%, varying from 1% to 8% depending on economic activity, and will be in effect from January 15, 2020.
In the case of the education sector, free zones, hotels, agriculture and water supply the increase will be 1%, while in the area of Bocas del Toro where banana companies operate the adjustment will be 8%.
The Panamanian business sector believes that increasing the minimum wage under current conditions will generate more unemployment and increase informality in the labor market.
With the possibility of an increase in the minimum wage next year, the National Council of Private Enterprise (Conep) insisted that in the context of the economic slowdown, it is not possible to increase workers' pay.
With the recent signing of the U.S.-Canadian-Mexican trade agreement, a precedent was set for future negotiations, as this agreement sets binding labor conditions, such as making exports subject to the payment of a minimum wage.
For example, one of the conditions of the Treaty between Mexico, United States and Canada (T-MEC), which was signed on December 10, 2019, is that vehicles exported from one state of Mexico to the other two countries "must come from plants that pay wages not less than $16 an hour.
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.
From July 1, the second increase in the minimum hourly wage for construction workers in Panama comes into effect, which occurs in a context of considerable decline in the sector's activity.
The increase is part of the Collective Bargaining Agreement CAPAC-Suntracs, whose negotiation ended a strike that in 2018 lasted more than 30 days. According to official figures at the end of the first four months of 2019, the cost of new construction, additions and repairs fell 28% compared to the same period in 2018.
In recent years, the sector in Guatemala has lost nearly 30,000 jobs, because the high costs resulting from having one of the highest minimum wages in the region, makes it more profitable only to export raw materials, rather than making them in the country.
Vestex figures show that in recent years several jobs have been lost in the sector, given that between 2006 and 2018 the industry lost a considerable number of jobs, going from 82,109 to 53,636 places, equivalent to a 35% decrease.
During last year, the Panamanian state spent $3.925 million in salaries to public officials, 8% more than what was reported in 2017, a rise that is explained by the year on year increases reported in the first months of 2018.
Figures from the General Comptroller of the Republic detail that between 2017 and 2018, spending on salaries for public employees increased $298 million, going from $3.627 million to $3.925 million.
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.
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.
The Panamanian government has spent $2.580 million in salaries for civil servants from January to August this year, 10% more than had been reported in the first eight months of 2017.
According to figures from the Office of the General Comptroller between January and August 2017 and the same period this year, the expenditure on salaries for civil servants increased by $241 million, from $2,339 million to $2,580 million.
Between January and June, the Panamanian State disbursed $1.915 billion in salaries to public officials, 12% more than the $1.708 billion reported in the first semester of 2017.
The Office of the Comptroller General of the Republic reported that the cumulative gross salary of the Public Sector payroll in June 2018 amounted to $333.3 million, of which $312.2 million corresponds to permanent officials and $21.1 million to interim staff.
30 days after the strike began, employers and workers have finally reached an agreement on the scale of salary adjustments for the period 2018-2021.
From a statement issued by the Panamanian Chamber of Construction (CAPAC):
May 18, 2018.The Panamanian Chamber of Construction (CAPAC) informs its members and thegeneral public that today, May 18, a salary agreement was reached with the National Union of Construction Workers and Similar (Suntracs).
The Panamanian State spends $321 million a month on salaries paid to public officials, well above the $209 million spent on this expense four years ago.
Monthly expenditure on public salaries has increased, especially during the Varela administration, as according to figures of the Ministry of Economy and Finance from March 2018, every month $113 million more is paid than in 2014.
The total amount disbursed by the government in payment of salaries up until October 2017 was $321 million, 18% more than in the same month in 2016.
According to a report by the Comptroller General of the Republic, a total of 233,111 posts were registered in October of last year, which are divided into 209,173 permanent and 23,938 contingent workers.By sector, 150,414 corresponded to the Central Government and 82,697 to the Decentralized Sector.