For the past two years, wage increases have been certain in Ecuador as President Guillermo Lasso has pledged to fulfill his campaign bid to raise the basic wage from $400 in 2021 to $500 in four years of his government – and therefore decreed an increase of 25 dollars in 2022 and another $25 in 2023, but now that he is leaving office early there is uncertainty about whether there will be an increase and how much it will be.
Only between 1998 and 2000, when the country went through a financial crisis, and in 2020, due to the pandemic, no salary increase was determined, which would take effect from January of the following year. Now, in the midst of the change of government, the basic salary for 2024 is being determined.
The new increase of $25 left no floor
The current government intended to reinstate the $25 increase in the basic wage in 2024 if workers and employers do not reach an agreement within the National Labor and Wages Council. But on November 10, the inauguration of the newly elected president Daniel Nobo Azín was announced in advance: at first it was scheduled for December, then for November 30 and finally it was left for Thursday 23, and thus this edition is now out of the question. management by Guillermo Lasso.
2024 base salary no longer dependent on Guillermo Lasso due to Daniel Noboa estate progression
That’s because a decision must be made by November 30, by which time a new president elected in early elections after the death crucifixion that shortened Las’s term will already be in office.
What did Daniel Noboa say about the salary increase?
When he was a finalist for president, Daniel Noboa did not consider it feasible to raise the base salary to $500 “because the cost of living is rising more than the salary. The problem is not the increase in salaries to infinity, the problem is that costs are rising faster than the basic salary. This is controlled by lowering the cost of living, with greater competitiveness in electricity and fuel costs, which translates into lower food costs. Then your purchasing power increases and you can have greater prosperity.”
The basic salary enters the center of the debate
He said this three days after entering the second election round, in August of last year, in the only interview since then for this newspaper.
These are the positions of workers and employers
The National Wage Council has already held its first meeting on November 9 to begin analyzing the amount that will prevail in 2024. Union headquarters are proposing an increase of $100 to reach a base amount of $550 – the equivalent of the cost of a vital basket – while the economic associations have not yet given the amount as a proposal, but their statements were in the direction that the fixation must be given in a technical way and that the Council’s institutionality and let that body decide on it.
The discussion on determining the basic salary for 2024 begins
At that first meeting, economic forecasts were announced: an estimated economic growth of 1.5% at the end of 2023 and 0.8% for 2024, according to data from the Central Bank of Ecuador. And average annual inflation of 2.56% for this year and 2.07% for the next. The next meeting is scheduled for this Friday, November 17, and another one a week later, where a consensus will be reached, the government says.
How did the basic salary develop in Ecuador?
Before dollarization, the basic salary in Ecuador was 100,000 sucres, and it remained at that value for almost three years due to the crisis the country was facing at the time. When the economy was dollarized, the wage, affected by the progressive devaluation of the sucre, remained at $57 and was then adjusted to the system.
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In these two decades, salary increases ranging from $5 to a maximum of $30 were applied, and in 2021 there was no increase, so the basic salary was $400 for two years. It has since risen $25 due to Guillermo Lasso’s option bid and currently stands at $450.
Which countries pay the most and which pay the least in the region?
Ecuador has the fourth highest basic salary in Latin America, according to portal data An extraafter Costa Rica, Uruguay and Chile, and Venezuela would have the lowest salary.
These are the minimum wages in Latin America valid in 2023 according to the exchange rate:
Source: Eluniverso
Alia is a professional author and journalist, working at 247 news agency. She writes on various topics from economy news to general interest pieces, providing readers with relevant and informative content. With years of experience, she brings a unique perspective and in-depth analysis to her work.
