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.
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.
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.
Lack of control over the use of materials and job insecurity are two of the problems which would be resolved if the National Construction Council is created, suggests the private sector.
Informality in the construction sector is growing and with it "... security policies are becoming more flexible, they start to be neglected and then the potential for situations - such as increasing the minimum wage outside the scope of productivity and of consensus - becomes much larger," says the chairman of the Superior Council of Private Enterprise (COSEP), Joseph Adam Aguerri.
The private sector has rejected the methodology used by the government to establish the increase for this year and presented a proposal to make adjustments in the future.
From a statement issued by the Superior Council of Private Enterprise (COSEP):
The Superior Council of Private Enterprise (COSEP) in light of the unsuccessful negotiations in the National Minimum Wage Commission to reach a tripartite agreement and the political decision of the government through the Ministry of Labour (MITRAB), to approve the minimum wage unilaterally, which is in effect for all economic sectors of the country from March 1 this year, wishes to express the union position on this.
The Ministry of Labor will define the wage adjustment in the absence of an agreement between the private sector and trade unions.
In the last meeting on 13 March the parties were not able to reach an agreement. The private company proposed an increase of 9%, while unions demanded an adjustment of between 10% and 14%.
Freddy Blandon, representative of the Superior Council of Private Enterprise, Cosep noted that "...
The Labor Ministry approved an 8% in the minimum wage paid to construction workers.
It applies to masons, carpenters and builders, and will only apply for new construction projects, not to those already underway. It does not apply to housing projects either.
The new minimum wage was set at $1.04 (21.5 córdobas) for each coffee can.
Facing opposition from coffee growers, the Ministry reduced the minimum wage from $1.21 to $1.04 per can.
"Coffee growers sill reject this minimum wage, arguing that Nicaragua's economic situation does not allow them to assume this wage increase", reported Elnuevodiario.com.ni.
According to recent regulation, daily wages in the coffee industry must increase from $4.36 to $6.03, and the remuneration for each coffee can to $1.21 from $0.87.
This new compulsory regulation has met with strong rejection on behalf of coffee growers and packers, who argue it will increase their production costs.
Representatives from Asocafemat, the Metagalpa Coffee Growers Association told Nicaraguan newspaper La Prensa that "...they will analyze what options they have to reduce the salaries established by the Work Ministry".
Five Free Trade Zone companies have applied for temporary suspensions and, with these five, it would be seventeen that have already been affected in the first quarter of the year.
Among the applicants are Arnecom S.A., Clypso Apparel S.A., Santa María, Atlantic and Yutex S.A.
Yu Jin is the second textile company closing during the course of 2009 in Nicaragua, leaving at least 500 people unemployed.
Cone Denimtextile from the US was the first textile company to formalize its closing when it requested a temporary, 14-month closing at the end of March due to the suspension of orders from United States. The closing sent 800 people to the ranks of the unemployed.
The closing of the U.S. company because of the economic crisis sends 800 workers to the ranks of the unemployed.
The company, which had announced a temporary closing for a couple of weeks, requested a temporary closing of 14 months from the Ministry of Labor.
The Elnuevodiario.com.ni website published: "The board of directors of Cone Denim Nicaragua, located in Ciudad Sandino, confirmed the information through a press release in which they explained that the decision to close operations in the country was made due to the global economic crisis and the slowdown in the supply chain."
Nicaragua's Labor Ministry is preparing to sit down with business and labor representatives on July 24 to discuss the nation's minimum wage.
In Nicaragua, the minimum wage is applied to nine sectors of the economy and must be adjusted every six months.
Inflation is currently running close to 12 percent per year. The minimum wage is currently 1,901 cordobas, or just under 100 dollars, per month.
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