Minimum Wages
Submitted by fyl on Tue, 2013/01/22 - 07:34.
Nicaragua's minimum wage is a bit complicated as it depends both on what kind of work you do and where you live but the general conclusion is that it only covers the cost of about 50% of the necessities (canasta basica). Some of us may have an idea how that compares to the value of the minimum wage back home which, for the majority of NL readers is in the US but a more useful comparision would be to other countries in the region.
Enter an article in Guatemala Times. It turns out that you could pretty much replace the word Guatemala with Nicaragua in the article.
A 5% increase in the minimum wages for agricultural, non-agricultural and maquila export was approved. The decree establishes that wages for farm and nonfarm activities will be $ 271 monthly. In 2011 it was $ 258. For employees and maquila exports will increase from $ 235 to 249 per month. In Guatemala 53% of the 14.3 million people live in poverty and 13% in extreme poverty. Guatemala is the number 4 country in the world in child mal nutrition. It has the worst health and nutrition indicator in the hemisphere.
For what it's worth
A few data points:
Several fincas in the Esteli area pay 100 cordobas per day -- or about $0.50 per hour or $107 per month for a six day work week. The jobs include two meals of rice, beans, and a splash of coffee per day (about 20-25 cordobas worth of food at most according to someone I know). These folks don't receive a work contract with all the extra goodies that entails.
I know several people in the tourism industry who work as guides or at hostels. They have college degrees and earn between 125 and 175 cordobas per day (about $5.15 - $7.25). They don't get any sort of work contract. Sometimes they receive a free meal, but that's usually for the lower paid folks who work at a desk.
A barber friend of mine makes, on average, about 175 cordobas per day with tips. He strikes me as both capable and likeable. He doesn't have a contract.
A couple acquaintances (they'd say friends) of mine work in the cigar plants. Both really hustle to make around 6,000 cordobas ($250) per month for a full-time (I think 48 hour) work week. These folks do receive work contracts.
An junior accountant for Pellas Group in Esteli makes about $300/month. A pharmacy technician makes $250 per month. They both have contracts.
None of these people, save the accountant, has a bank account, and all of them live with another working adult (at least) in very modest circumstances. They do have electricity and water and pre-paid cellphones, but not TV, Internet, or conventional telephone. None of them eat much meat even though they'd all like to. Everyone except the accountant and pharmacy technician have a concrete hole in the back for their toilet and a bucket for a shower.
The farm worker minimum wage
includes meals and accommodation (not what we would eat and where we would sleep) but it has to be taken into account.
90%?
From the cited article and I would be amazed is this was not a wildly gross understatement: "...over 60% of the private sector does not pay minimum wages. ...". The real number is likely closer to 90%. If the work day were tied to the salary minimum, this number would probably climb to 95% if not higher (countless people work every week day, and hours that grossly exceed the intended definition, etc.). Guatemala has many of the same problems as Bolivia. One thing not touted in the reports is that a moderate increase of income in the two countries does not automatically, moderately increase "health and nutrition". As bad off as people are, added income, if there ever is any, is not necessarily targeted at more food stuffs and even when it is, is not necessarily targeted at more nutritious food stuffs. The poorest countries also usually have a serious sanitation factor that cannot be overcome by better food alone. Due to food inflation and cash-crop pressure, the problem is getting worse. Some of the most nutritious crops are pegged for export to wealthy countries (why most Bolivians cannot afford quinoa anymore) whereas the countries receives tons of foreign food aid, mostly subsidized surplus wheat and what not. Guatemala is a major agro-exporter, though you would never guess that looking only at people in rural areas. If you use alternative poverty-health measures, Honduras is actually worse off than Guatemala (MPI: Honduras, 32%; Nicaragua, 28%; Guatemala, 26%; even when you measure the intensity of the poverty on an MPI scale, Guatemala is not worst, Honduras is). The mainstream press, and perhaps even more so the non-mainstream press, produce far more articles on the plight of indigenous peoples even when the situation cannot be said t be unique (it is horrible, no doubt, but not unique and often not the worst there is).
Valid points
While it may not belong in this thread, having a thread that would address what the numbers say vs. the reality with regard to standards of living in the region would be really helpful. Some of this is, of course, hard to obtain. Hard numbers may be less important than helping someone living in the US or another first world country understand the effective income of someone living in Nicaragua (and, if possible, comparisons with other destinations in the region).
We get a lot of questions on NL and I get them personally asking about cost of living. Sometimes it is "how much money will I need to send to Nicaragua to support a daughter-in-law" or some such. Other times it is "can I live in Nicaragua on $x/month?" If the person asking has spent little time in Nicaragua, they generally don't have the context to really understand the answer.
For example, when I was writing Living Like a Nica I remember chatting with a waiter in a restaurant in Ocotal about the cost of rent. His point was that you could rent a house for $700/month near the center of town or another house for $30/month only about half a kilometer away. If you have spent a bit of time in Ocotal looking around this totally makes sense but if you are in Gringolandia this probably won't.
This difference gets further distorted when, in the US, you might have to add in utility costs -- particularly energy for heat -- whereas you are probably going to cook with scavenged wood in that $30/month house. Telling a person who don't understand the Nicaragua context that it could cost $100 to $2000 a month to live a non-extravagent lifestyle is just too big a range to be meaningful.
What amazes me about Nicaragua is how much it does
...with so little. Guatemala is a more prosperous country by the more typical economic indicators, but having the worst health and nutrition indicators in the hemisphere puts it behind here (I also suspect that when surveys are revised, Nicaragua isn't going to be the second poorest country in the hemisphere either, but that Honduras could be).
Rebecca Brown
Minimum wage applies to about....
100,000 or so workers in private industry and about 14,000 in the government sector.
Total Workforce is: 2,807,000 Self Employed: Employers: 856,600 Business Owners: 168,700 Salaried Employees: 1,222.200 Non Paid Employees: 559,400
Only 650,000 or so subscribe to the INSS program.
Here are your current minimum wages:
http://www.mitrab.gob.ni/documentos/salario-minimo/Salario-Minimo-septie...
The "Informal Category" of Workers...under the table or radar and anything from squeegee boys to "Ceramica?" sales is a bit of a smoke screen in relation to unemployment figures as is the "Non Paid Employees" category above.