Businesses fight against impact of raising minimum wage

As noted previously in El Salvador Perspectives, the government of El Salvador recently passed a significant increase to the minimum wage in both the manufacturing sector and in agriculture.    But  the business sector is not content to simply pass along the wages.   Danielle Mackey, writing in Equal Times, describes the backlash from factory owners: 

Since the beginning of this year, the salaries of maquila workers have increased by nearly 40 per cent, from US$211 to US$295 per month, while coffee and cotton workers have seen their wages more than double, from US$98 to US$200 per month. In addition, other rural agriculture workers have seen their pay rise to US$224 per month, while employees of commerce, service and industries now receive a minimum of US$300 per month. 

Nevertheless, the wage increase has provoked a strong backlash from what has been described as El Salvador’s “rabidly anti-union private sector”, with business lobbies issuing legal challenges, factories firing workers and other businesses threatening to relocate to countries with cheaper labour costs.

Mackey describes how, even though the minimum wage is still not enough to cover the cost of living, businesses have engaged in layoffs, the elimination of bonuses, lawsuits, and other tactics to thwart the success of the wage increase.   Read the entire article here.