In a context of a sharp drop in economic activity, the government decided to increase the minimum wage by 2.63% as of 1 March.
The increase, which was agreed by the Ministry of Labor and which will affect ten economic activities, was endorsed by the authorities on 6 February. Workers in free zones will be the only ones not to be subject to this increase, since wages in this sector were raised at the beginning of the year.
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.
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.
Beginning August 29, Nicaragua will begin to negotiate changes in the minimum wage, but the businessmen ask that the decision-making process consider the levels of inflation and fall in production.
In Nicaragua, there is uncertainty because the government is reviewing the tax reform without the participation of businessmen, and because adjustments to the minimum wage could be made in September.
Weeks ago, it was reported that when the government's review of the tax reform in force in the country since February is completed, businessmen consider that no tax cuts will be made, despite the fact that production costs in the country have risen considerably.
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.
On January 5th, 2019, an 8.25% increase in the minimum wage for workers in free trade zones came into effect in Nicaragua.
According to the Ministry of Labor, the minimum monthly wage in the free trade zones last year reached $168 during 2018, and with the increase in force since the beginning of the year, the minimum monthly payment will be $182.
The increase in salary is because employers and workers signed a multi-year agreement to increase the minimum wage annually by a percentage of 8.25% in the period 2018-2022.
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.
In the midst of Nicaragua's delicate economic situation, the government has announced that the 5.2% increase in the minimum wage agreed in March will come into effect on September 1.
Official media reported that the National Minimum Wage Commission ratified the agreements reached in March 2018, and from September 1 the new salaries will enter into force.
Due to a lack of consensus between employers and workers, the government established the increase for this year at 10.4%, which will be applied in two parts, beginning with a 5,2% adjustment, starting from March.
As the business sector and workers could not agree on fixing the increase, the Ortega administration made the decision to establish the adjustment. The first increase will be 5.2% and will apply from March, while the second will also be 5.2%, and will be fixed from September of this year and will run until February 28, 2019.
On September 1, the 4.1% rise in the minimum wage for workers in nine of the ten sectors established by law will come into force.
The 4.125% increase is part of the 8.25% adjustment approved jointly by the private sector, government and unions in February. At that time it was agreed that the adjustment would be made in two parts, at the beginning of each semester.
From January 2018 until 2022, there will be an annual increase of 8.25% in the wages of workers in free zone companies.
The agreement will be valid for five years and will come into effect from January 1, 2018.
Laprensa.com.ni reports that "...Currently the minimum wage in force in a free zone is US $180, and when the adjustment is applied next year it will go up to approximately US $195".
Businesses will have to apply an initial increase of 4,125% from 1 March 2017 and a second increase, of the same amount, on September 1.
The agreement was approved with the consensus of the private sector, trade unions and government. The decision to establish the increase at 8.25% came after the business sector proposed an adjustment to 7.63%, and unions, between 9% and 10%.
On September 1 a second increase of 4.5% will come into effect as agreed earlier this year in negotiations between the government, unions and employers.
With the 4.5% increase the minimum wage will be $180.7 a figure that will be maintained until March 2017, when the members of the Tripartite Minimum Wage Committee will meet again.
Through a tripartite agreement an adjustment to the minimum wages in all sectors was established at 9% , and 8% for SMEs.
The announcement made by the Ortega administration, in agreement with unions and the business sector, establishes an increase of 9% starting from this year.
"... The adjustment to the minimum wage will be made in two parts, the first from March 1 and the second from September 1. "