After the bad 2023, is it appropriate to raise the minimum wage now?

“The CNT must now approve the increase mechanism”

Fernando Cuadros Luque, former vice minister of Employment Promotion

The mechanism for increasing the RMV approved by the Labor Council in 2007 must be prioritized, and which now requires an update and adjustment always in line with the technical parameters provided by the ILO.

At the end of 2022, through ILO assistance, a mechanism was proposed, based on the 2007 methodology, making it more viable. The CNT now has to debate the ILO proposal, which was not approved by the employers when they withdrew from this space.

There is no reason to wait, as Minister Daniel Maurate says, “for the recession to end” or “the indicators to improve.” The optimal thing would be for the CNT to approve by consensus the ILO proposal, which can still be adjusted along the way as part of social dialogue.

Said adjustment of the ILO minimum wage says that it will depend on inflation, productivity and its annual review periodicity, in a context where there is no large increase in labor informality, unemployment or the relationship between the minimum wage and the formal average.

Once it is approved, the MTPE will materialize it through a supreme decree and proceed to evaluate whether or not it is appropriate to raise the minimum remuneration. There are approximately more than a million workers who would benefit from the increase.

“The rise to S/1,025 has suffered an enormous devaluation”

Gustavo Minaya, CGTP general secretary

We met with the Minister of Labor (Daniel Maurate) in an extraordinary session of the National Labor Council, and we raised the need to raise the RMV in this context of economic recession that means crisis for the poorest and workers who have the least income. . Raising it would help boost the economy because salary expenses would target essential markets and products.

The increase to S/1,025 that occurred for the last time in May 2022 has already suffered an enormous devaluation, so this Government has to decide now to raise the minimum wage with a view to reaching the amount of the family basket in a time determined: S/2,025, as endorsed by the INEI.

Today we cannot go directly to S/2,025, but a progressive adjustment is required that should not drop below S/200 annually towards the next five years; And this amount is a subsistence basket. With the salary of S/1,025 we are below all the thresholds.

A few years ago, guidelines were approved to institutionally approve the RMV, but since there were no meetings in the National Labor Council because the businessmen withdrew from the dialogue table, this important issue cannot yet be brought up for debate. Later, the increase in the RMV does not have to be a political decision but rather an institutionalized one.

“At this time it does not seem reasonable to raise it”

Jorge Toyama, partner of Vinatea and Toyama

The minimum living wage must be subject to the situation in the country: the impact of the recession is very high on the informal sector, microenterprises and young people, and added to the threat of El Niño, at this time it does not seem reasonable to raise it.

Another thing is its effect: the Peruvian minimum wage is almost 78% of the average salary. It is a very high rate. The OECD has a figure of 55% of the median salary and in the United States it is 29%. What is the reason for this nature of our labor market? Our worker is not very productive and does not generate much value for the company. The Peruvian worker is more about services, commerce and informality.

55.5% of the Economically Active Population earns less than the minimum wage, which reveals that an increase in the RMV directly impacts the labor market: the informal sector and microenterprises would be hit harder due to underemployment.

We must evaluate it well and not bet on populism.

What must be promoted is better labor productivity, private investment and the creation of formal employment. However, private investment is at rock bottom. Social dialogue between unions and sectors must be prioritized through collective bargaining. Civil construction has been a success story for more than 20 years.

“Companies are not in a position to assume more costs”

Daniel Hermoza, director of Mypes Unidas del Perú.

The Executive is playing on the enthusiasm that has been put into the reactivation. It is obvious that we are going to bounce. They have put almost S/5,000 million into the Impulso loans and they have paid, little, but paid part of the Fonavi; In fact there is money in the market, but it is too little to talk about a real reactivation.

After a very poor Christmas campaign, the mypes have a lot of stock and they auction it off in any way possible to recover the capital either from the bank or from the drop by drop and, therefore, with this pseudo-reactivation it would be a crime to try to raise the minimum wage when the companies are not in a position to assume more fixed costs.

A major problem would be generated such as the lack of motivation to hire employees. It seems irresponsible to me to want to debate it or imply it.

I understand the workers because it is an issue of necessity and it is very clear, but the conditions are not in place to raise it. It would only have to be evaluated starting in the second semester to see if what the Minister of Economy projects about the recovery is true. Yes, inflation has destroyed salaries, but it is not the fault of companies or workers, but rather the poor management of the Government for not addressing the crisis. Purchases from Myperú have not been carried out for more than a year and the credits do not reach the mypes, there are two examples.