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Minimum Wage Increase in Panama Has Some Angered

Article Summary:

Employees earning minimum wage across the nation of Panama will see an increase of 18% this next January. This has caused an uproar from the public sector who were not included in the wage increase. Those who will see increases, the amount will vary by activity and type of occupation with special treatment for small businesses and the agricultural sector.

Photo Credit: El Economista

Original Article Text From El Economista via Google Translate :

Minimum wage will rise to 18% in Panama

The Panamanian government approved raising the minimum wage in the private sector from 15% to 18% from January 2012, the new rates were set according to economic activity, occupation and firm size.

The Minister of Labour, Alma Cortés said the wage increase decreed by the Executive, having failed negotiations for several months held employers and employees to establish a new minimum wage earn about 250 thousand employees. “We are aware that we will not look good either with employers because they will see very high, and with the workers, because they will not meet your expectations, but I am confident that is the best decision you have taken for the country, “Cortes said in a press conference.

The minimum wage in effect until December averages $ 416 dollars. The new rate will be applied based on two industrial regions, number one, which includes Panama City, Colon and San Miguelito, recorded the highest salaries.
Cortes noted that for both areas increases the range varies by activity and type of occupation with special treatment for small businesses and the agricultural sector.

With the new reclassification wages are unified in areas such as mining, financial services and insurance, professional, scientific and technical, telecommunications, security agencies, and shopping malls (with more than 50 local).

The executive order also unifies wages for port workers of companies with more than 50 employees, attorneys, health technicians and journalists who have increased the minimum wage, from $ 376 to $ 490.68, an increase of 18%, said Cortes .

In the case of l domestic service, was set at $ 200 for region 1, and $ 175 for the challenge facing the country.
This is the second minimum wage set by the present Government to the private sector, the first time was in December 2009.

The president of the Chamber of Commerce, Industries and Agriculture of Panama Federico Humbert was concerned about the range of increases, which explained the proposal beyond the business sector by 7% based on technical and economic studies to prevent a cyclical effect inflationary.

He said the wage increase of 15% will cause an increase of $ 300 million in private-sector payroll , that regardless of subsequent increases in the rest of the organization of societies.

“Undoubtedly, this increase will finance a blow to private enterprise, especially given a thrust to micro and small enterprises, an important part of our economic engine,” said Humbert. In contrast, workers unions considered that “the increases are insufficient” to address the decline in the value of the dollar, the high cost of living in the country and the strong economic growth would close 2011 at 10.5%, according to estimates government.

The workers had suggested a minimum wage increase between $ 540 and $ 550 per month to meet rising prices especially of basic food basket. In November, the Consumer Price Index (CPI) rose 6.8% compared with the same month last year, while in the 11 months, cumulative inflation was 6.1%, according to the Comptroller General of the Republic.

The wage increase did not include public employees, who in 2010 received a raise of $ 50. The Minister of Economy and Finance, Frank De Lima said the General Budget of the Nation approved for 2012, does not include a minimum wage increase for the public sector, but said the issue will be discussed in the coming months.

“… It is not fair that an increase in private sector minimum wage and not the officials who work in the public sector … we have to see where we make the transfer of items to make the rise,” he said De Lima.

Link to Original Article:

From El Economista

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