At the fourth meeting of the Minimum Wage Commission last week in the nation’s capital of Managua, seven proposals were being discussed from various employment groups as part of the minimum wage review 2024. The commission will need to arrive at a consensus over the next few weeks (four more meetings are scheduled) in order to avoid a mandatory adjustment for March 1st 2024.
At last week’s meeting, the Central Bank of Nicaragua (BCN) presented its economic report in relation to the discussions on the minimum wage. According to the BCN, the accumulated inflation figure is 5.6% and the GDP (Gross Domestic Product) growth projection is 4.5%.
The third important factor in every minimum wage review is the Canasta Básica or Basic (Food) Basket often comes up when reading anything about the cost of living or minimum wage. This is up 4.32% from last year and is currently about 19,800 Córdobas per month.
The basic basket is a fixed list of 53 products and services in set monthly quantities and is used to track how inflation affects the monthly basic living expenses of an average lower income (minimum wage) Nicaraguan household (made up of six people, four adults and two children). It includes; food, household items, clothing, rent and utilities.
So far there are seven union proposals on the table ranging from 7% to 15%.
Meanwhile the business group is holding at 12.99%.
The Sandinista Workers’ Central Union is at 13.5%, the General Confederation of Independent Labor is OK with 12 % and Sugar Workers want 15%.
The highest percentage increase being proposed so far in the minimum wage review 2024 comes from Alex Castillo, member of the Executive Committee of the Association of Farm Workers. He is looking for a 17% increase in the minimum wage for his members who currently have the lowest minimum wage at 5,196 Córdobas per month (although many at that level also get basic accommodation and food provided).
Castillo made the point that the important agricultural sector represents 15% of the country’s GDP and accounts for 35% of total exports. He added that inflation and the basic basket increases of 5.6% and 4.32% respectively to create an almost 10% loss in purchasing power which has to be considered and reviewed as per the minimum wage law.
On February 23rd last year, Alba Luz Torres (Minister of Labor) announced that a consensus had been reached and that she had approved a 10% increase in the minimum wage from 1st of March 2023 until February 29th, 2024 (a leap year).
