It’s time once again for Nicaragua’s Minimum Wage Commission to hold its usual minimum wage review in anticipation of any increase being voted on ready for a March 1st 2023 implementation. The commission has been installed and they have already had their first meeting.
As is laid out in the labor law, the three groups that make up the commission represent the workers, the employers and the government, through the Ministry of Labor (known as MITRAB).
Discussions will take into account the economic development of the country, the generation of new jobs and the impact increases in the “Canasta Basica” (the Basic Basket), which is a fixed list of 53 products and services used to monitor how inflation affects the standard of living of the lower income Nicaragua family. The list includes items such as food, household items, clothing, rent and utilities.
There was no early speculation regarding what the magic number would be. All the groups were given the relevant information to add to their own data on inflation and economic growth.
So far, and as was the case last year at this point in the process, the Superior Council of Private Enterprise (COSEP) were absent and the employers were represented by the Association for the Promotion of Development and Sustainability of Nicaragua (APRODESNI).
The last increase in the minimum wage was March 1st 2022 and was 7%, the first substantial in the minimum wage since early 2018. The graphic below shows the result of lasts years Minimum Wage Commission review and subsequent increase implemented on March 1st 2022:
It should be noted that although the Zona Franca (tax free zone workers) are one of the ten different minimum wage groups representing about 300,000 minimum wage employees in total, the approximately 136,000 tax free zone workers are subject to a different regime.
Last October, free zone union representatives negotiated a five year wage agreement which gave workers an 8% increase from the 1st of January this year, 2023.
