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The Government begins today the dialogue towards a real formulation of the minimum wage

By Cristina Alvarado O. and Esteban Salazar

In Peru there is already a formula to technically calculate the Minimum Living Remuneration (RMV) since 2007, created within the National Labor and Employment Promotion Council (CNTPE). This formula is calculated from productivity and inflation (see infographic).

This mechanism has not been institutionalized for 14 years because the technical criteria agreed upon during that roundtable have been, over time, overtaken by political maneuvers that they have sought a purely proselytizing income in the opinion of different union unions.

Indeed, from the Central Unitary of Workers (CUT), they affirm that the S / 930 that we receive today as a minimum wage, are not calculated based on this formula. Julio César Bazán, president of the CUT Peru, mentions that the different governments have allowed themselves to be pressured by the companies because they say that unemployment will be generated.

Former Deputy Minister of Employment Fernando Cuadros Luque Remember that the basic basket of family consumption at the national level is S / 1,500. This is to the extent that, from January to October 2021, inflation in metropolitan Lima grew 5.23%, according to INEI figures. “The optimal thing is that the minimum wage covers the basic basket of family consumption,” he explains.

In this regard, the sociologist and member of the Center for Public Policies and Human Rights (Peru Equidad), Enrique Fernández-Maldonado, affirms that policies in favor of the minimum wage do not generate job losses. On the contrary, in a country like Peru in which 40% of the population earns the minimum wage Yes, it would help to invigorate the internal market and work. “Whenever internally made products are consumed,” he said.

RMV: a mechanism

This formula has already been used as a reference in previous governments to raise the RMV, according to the MTPE and its execution has not generated unemployment or informality (in the opinion of Cuadros Luque). How does it work?

The formula is governed by the sum of productivity and inflation, and includes four variables by which the RMV will not increase if any of the following situations occurs, which could configure an inappropriate context: deep recession, strong rise of the open unemployment rate, a sharp rise in the rate of labor informality and an excessive rise in the ratio of the minimum wage to the average wage.

Cuadros points out that the formula, although due to the context of the pandemic, it would indicate that it is not the time to raise the RMV, this should not represent an obstacle to institutionalize it.

“A law is not required, a supreme decree of the Ministry of Labor is enough where the formula and the parameters to apply it are indicated,” he affirms.

Business position

For his part, Manuel Faura, member of the Labor Commission of the Lima Chamber of Commerce (CCL), affirms that it is not convenient to raise the RMV in the current situation and that, due to the pandemic, is not a good time to institutionalize the formula; this to the extent that around 20% of the workforce is formal, 80% is informal.

“Many companies have been economically affected by the pandemic and during all this time they are making efforts to get ahead.

The increase in the minimum vital remuneration only includes formal companies; the small ones, seeing their labor costs increased, could go to informality. The cost overruns that an increase of this nature represents, small businesses could not bear. We must keep that in mind ”, he warned.

Dialogue table for reform

The National Labor Council, a body that is resuming its place in the national economy as of today, brings together workers, businessmen and the Government, in order to adopt decisions on labor policy in a consensual manner.

Although trade union centrals such as the CUT have indicated that it is a re-launching ceremony, the workers They will take the opportunity to deliver their pending documents, not only those reflected in an eventual increase in the minimum wage, but also in terms of collective bargaining, among others.


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