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.
Costa Rican businessmen warn that the government's decision to standardize wages in 2020 will lead to more unemployment, affect workers with less education and reduce competitiveness even further.
For the business sector is imprudent to approve and implement the wage standardization in 2020, since it will have a strong impact on productive sectors such as agriculture, trade, transport, tourism and construction, explains a statement from the UCCAEP.
The 2.53% increase approved for the minimum wage for private sector workers in Costa Rica will be in effect from January 1 next year.
With this increase, a messenger worker who has an Unskilled Occupation and earns today ¢309,143.36 ($518) per month will earn ¢316,964.68 ($531) as the minimum wage, the government said.
For the minimum wage adjustment planned for January 2020 in Costa Rica, the business sector proposes a 2.53% general increase.
The Unión Costarricense de Cámaras y Asociaciones del Sector Empresarial Privado (UCCAEP), representing the formal private business sector, submitted the salary adjustment proposal to the National Salaries Council.
In Costa Rica, modifications to the salary tax brackets establish that income of up to $1,394 will be exempt from collection of the tax, and those exceeding $1,394 and up to $2,046 will pay 10%.
On June 25, the Ministry of Finance published in La Gaceta the new income tax brackets to be applied to salaries between July 1 and September 30, 2019.
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.
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 increase will apply to the private sector from January 1st, 2019, and will continue throughout the year, applying to all salary categories.
The representatives of the National Wage Council reported that after analyzing the proposals presented, the minimum wage adjustment was unanimously approved on October 24th.
As of January 1, 2018, the increase rate will apply to the private sector, which will apply for all wage categories and will remain in force throughout the year.
The increase approved by the National Salaries Council is one that had been proposed by the associations of private companies in October.
From January 2017 an increase of 1.14% comes into effect for private sector wages in all categories included in the official decree.
The National Wages Council confirmed the government's proposal that the adjustment to be made from January 2017 will be 1.14% for wages of workers in the private sector.
The draft Minimum Living Wage Act under discussion in Costa Rica eliminates the wage adjustment formula agreed in 2011 and could mean a rise of 35% in the minimum wage in the private sector.
From a statement issued by the Costa Rican Union of Chambers and Associations of Private Business Sector (UCCAEP):
Living wage law will cause unemployment and poverty
Costa Rican industrialists warn that increasing the minimum wage in the private sector by 34% will cause more unemployment and encourage more companies to operate unofficially.
The bill concerning the minimum wage will endanger plans for new hires in the private sector, and its passage into law could cause more informality and more unemployment. The proposal aims to increase the minimum wage by 34% for unskilled employees in the private sector. With the increase, the salary would go from $534 to $718.
Bowing to pressure from those who can choose what to eat every day, the Morales administration has repealed the differentiated minimum wage, denying the right to choose how to live to those who do not have that option.
EDITORIAL
President Morales has put an end to an initiative that aimed to attract investment to four municipalities by applying differentiated minimum wages, yielding to the the high profile power of those who, from the comfort of a heated office and while receiving thousands of dollars in salaries each month, feel that it is reasonable remove the possibility of having a job from those who have nothing.
From the comfort of a heated office and after receiving thousands of dollars in salary at the end of every month, well-intentioned people are trying to take away from those who have nothing, the possibility of having a job.
EDITORIAL
The indispensable struggle for the dignity in jobs and the eradication of slavery of the people living under a wild form of capitalism, has led to the introduction of minimum wages in modern societies.
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