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Deal struck on public employee wages

February 24, 2012

One week after thousands of public employees filled the streets around Casa Presidencial in Zapote, in southeastern San José, major progress was made between strike organizers and the Costa Rican government toward resolving a salary dispute.

National Association of Educators President Alexander Ovares expressed his satisfaction with the “pre-agreement” made in a meeting between 10 union leaders and government representatives including President Laura Chinchilla on Monday. 

Ovares, designated spokesman for the unions, said the six-hour meeting focused on four points. He told The Tico Times that the sides came to an understanding on three of those main issues. The issue of salary hikes – the topic that sparked last week’s protest – remains the one unresolved issue. However, Ovares insisted the “other points were very important,” and progress has been made toward resolving the wage debate. 

The Feb. 15 protest saw teachers, port workers, public health officials, telecommunications work and government employees walk off their jobs to object to a ₡5,000 ($10) monthly salary increase for the first six months of the year. Workers stated the unilateral increase was not enough to match the mounting cost of living. The following day, Chinchilla invited union leaders to a dialogue that was held Monday.

“They gave us a quick answer because we had a large enough force,” said Ovares, discussing the success of the demonstration. 

In the meeting, Chinchilla promised to block a new public-employment bill from discussion at the Legislative Assembly, and agreed to consult the unions before another version of the bill reached lawmakers. 

She conceded negotiating powers of public-sector wages back to the unions. In November, the government reduced unions’ power to determine salaries for public workers by granting the Budget Authority, a government agency, discretionary power. 

The president pledged to discuss the methodology used to define the increase in public-sector salaries for the second half of this year.

One option could be to follow a 2007 agreement, which requires calculating inflation to determine wage increases. But formulas that would better take into account the current fiscal crisis also will be considered.

The possibility exists that the salary negotiated in the second half of the year, which begins in July, will include compensation to make up for the small increase during the first six months of the year. This deal would give the government considerable time to crack the fiscal crisis and establish reforms.

In addition, Chinchilla stated in the meeting that there will be no pay cuts for workers who participated in last Wednesday’s strike. 

That left only the wage-hike issue remaining.

Before the strike, Finance Minister Sandra Pisk said Costa Rica’s current fiscal deficit made it difficult to give “higher raises without causing a higher disparity in public finances.”

This point was highlighted in a La Nación editorial titled “Wage Struggle” on Feb. 17 that suggested the government’s “hands are tied” due to the current fiscal crisis. 

“The Costa Rican government needs a profound reform. Wage policies, the benefits granted to its employees over decades and the reduction of payroll are priority issues,” the editorial stated, adding that “the wage increase offered to the public sector falls in a Costa Rican reality characterized by low inflation and a large gap between revenues and expenditures.”

Ovares said the unions understand the government’s point of view, and they will take that perspective into consideration as the groups attempt to come to a compromise. 

“The government presented to us two valid arguments for having decreed the ₡5,000,” Ovares said. “There is the fiscal aspect and also the fact that the raise benefits most the lowest salaries. The additional ₡5,000 favors lower salaries more than the high ones [compared to a raise determined by a percentage].”

The unions will meet on March 3 to discuss the positions they want to take with the salary issue. On March 5, the government and union heads will convene again to try to finalize the accord.

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