Nearshore Americas

Pressure Mounting on LatAm Countries to Further Raise Minimum Wage

Many Latin American governments are under tremendous pressure to raise their minimum wage, as several economies across the region are experiencing high inflation.
Over the past few months, many countries in the region have increased minimum wages, but analysts say the wages are still insufficient to classify them as middle-class workers.
Mexico, for instance, increased the country’s daily minimum wage for 2016 by 4.2% to $4.30. But its wages are still among the lowest in Latin America. Venezuela has recently succumbed to this pressure, raising its monthly minimum wage by a record 30%.
The Colombian government raised the minimum wage 7%, slightly more than the country’s 6.11% inflation in 2015. But workers’ unions have called the increase insufficient, saying the decreasing value of the peso has inflated the prices of goods.
The recent rise in minimum wages in Venezuela increased salaries and pensions by about 20%, but the country is still struggling with a record annual inflation of 64%.
In Brazil, former President Dilma Rousseff raised the minimum monthly wage from 788 ($193) to 880 reals ($215). Again, the reason for the increase was skyrocketing inflation.
Mexico raised its minimum wage to twice the 2015 inflation rate. Yet, the country’s El Daily Post says it is not enough, saying that the working poor rose from 32.9% in the third quarter of 2008 to 41.4% in the first quarter of 2015.
The widening gulf between rich and poor is also contributing to the trouble. “In the most unequal economies, poor people tend to receive fewer benefits from economic growth,” explains El Daily Post.
In Chile, the increase was well above the 4.4% inflation the country faced in 2015. Despite the this, several labor unions held protests across the country demanding further increase. Guatemala increased the minimum monthly wage by about 4%, from 2,534 ($331) to 2,747 quetzals ($359), but labor unions are calling for 10% increase.

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Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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