Another May 1 with one of the poorest minimum wages in the region

A recent report by Oxfam Intermón reveals that the wages of workers in the world, in real terms, fell by 3.19% in 2022, while those for executive directors increased by 9%. This prediction reaffirms the 11% year-on-year drop warned by the BCRP on the average real income of S/1,841 in Metropolitan Lima in the first quarter. The Oxfam document further warns that 1 billion workers in 50 countries have suffered an average wage cut of US$685 in 2022 – a joint loss of US$746 billion in real wages – compared to what they would have earned “if wages had kept pace with inflation.”

Situation that has been, of course, noticed not only by housewives and precarious workers in a market dominated by labor informality (70% of the PEA), but also by union centrals that on Workers’ Day marched for a new increase of the minimum vital remuneration (RMV) towards maximums that can compensate the national inflation of 8.04% that plagues the market.

This is how the CGTP understands it, which the day before requested that the minimum wage in Peru rise to S/2,500. For the former Vice Minister of Employment, Fernando Cuadros, this figure is disproportionately far from the S/1,200 that today could have been reached if since 2007, when a technical mechanism for reviewing the RMV was approved by the National Labor Council (CNT), was decreed and implemented on an annual basis based on the productivity-inflation formula.

“Even so, it would be below the S/1,500 that the basic basket costs. In Peru, the minimum wage is one of the lowest in the region, we are at a lower level of purchasing power levels if we take into account the exchange rate and inflation. At the beginning of last year a greater increase could have been achieved, it is obvious that today it is not enough,” he says.

Do not cut more rights

During the event, it was President Dina Boluarte herself who dotted the i’s and clarified, in the presence of her new minister Fernando Varela –reluctant from the MTPE to regulate outsourcing– that the rights of workers will not be immolated to reactivate the economy in his government. “In this management, in no way, the rights of workers will be cut, because they are acquired rights, there will be no setback,” said the president during the ceremony of Decoration of the Labor Order.

However, labor activist Javier Mujica believes that this defense must begin by settling the demands for flexibility and “anti-internal market measures” put forward by a part of the private sector, which would end up affecting consumption “based on real wages, employee pensions, retirees and state purchases”.

However, it also recognizes a “cultural phenomenon” internalized in the market to the point that conglomerates such as Gamarra (40,000 pre-pandemic jobs; 99.5% mypes) end up consolidating this model of underemployment and, at times, exploitation. “When those who have power form this public culture, ordinary people end up replicating it. There are micro-entrepreneurs who think like the big ones, who must reduce labor rights without realizing that they affect themselves. It is the man being man’s wolf”, affirms the expert.

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Diary. The CGTP announced that it will take a document with 19 labor demands to the MTPE in the month of June. Wages. The RMVs of 11 Latin American countries are higher than in Peru (US$262), according to Bloomberg.

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Fernando Cuadros, former MTPE Vice Minister

“There are others pending, such as reactivating the CNT for a reform of the General Labor Law see from temporary hiring, layoffs, outsourcing and pension reform, among others”.

Javier Mujica, lawyer Peru Equity

“In all countries the RMV they are readjusted periodically, and the most widespread standard is that they are updated annually. This calculation preserves purchasing power to replenish the labor force.