With the New Year less than a week old, at least one side in the Tri-Party Wage Commission is already looking forward to starting the minimum wage review that will decide this year’s minimum wage increase.
There is some talk that trade unions have already discussed how their opening strategy will rely heavily on the much publicized robust economic figures produced by the Central Bank of Nicaragua and which indicate an economic growth for 2021 of about 8.5%.
In addition, inflation predictions for 2021 are a little higher than expected for 2021 and have been adjusted to between 6 and 7% from between 5 and 6%.
With employers doing better and higher prices at the grocery store, some unions have been talking about an increase in the minimum wage of over 15% for 2022.
Nicaraguan law calls for a minimum wage review every six months based on economic growth and inflation. The current schedule is that the review takes place in January and February for a March 1st change, followed by a July and August review for the September change, if any.
Zona Franca Category
Adding to the justification of the union’s demands, and as reported at the end of last year, Zona Franca (Tax Free Trade Zones) employees are now in the last year of a five year wage deal which has seen then receive an 8.25% raise every January for the last 5 years. The unions will be renegotiating that 5 year wage contract later this year.
The 2022 minimum wage for the other nine categories will be important to those discussions as will the current 5 year Zona Franca deal to the 2022 minimum wage discussions.
Tri-Party Commission
Joining the unions at the negotiating table will be representatives from the government (Ministry of Labor MITRAB) and representatives of the private sector. This was usually the Superior Council of Private Enterprise (COSEP), however in 2021 it was the Nicaraguan Council of Micro, Small and Medium Enterprises (CONIMIPYME), standing in for COSEP.
Last year, the commission was installed on Thursday the 14th of January. The pre-agreed number of weekly meetings was set and the commission tasked with arriving at a consensus by the end of the last scheduled meeting which was Thursday the 25th of February.
Recent Minimum Wage Adjustments
Adjustments to the minimum wage in Nicaragua in recent years (Source; Dele Peso)
2017 – 8.25% increase.
2018 – 10.40% increase.
2019 – 0% No Increase.
2020 – 2.63% increase.
2021 – 1% – 3% increase.
