• Costa Rica Coffee Guide

Salary increase for private sector set at 2.01 percent

October 28, 2014

The National Wages Council on Monday evening approved a 2.01 percent salary increase for private-sector employees that will be applied in the first half of 2015.

The approved rate corresponds to the proposal presented by government officials during a hearing at the Labor Ministry earlier on Monday.

For domestic workers, the salary increase is 2.5 percent.

“If we had applied the methodology in place since October 2011, it would have resulted in a 1.62 percent increase. We recommended a higher increase, which is in line with this administration’s commitment to better wages,” Labor Minister Víctor Morales Mora said in a press release.

During the council’s previous two sessions union leaders offered three proposals ranging from 2.91-4.58 percent, while the Costa Rican Union of Private-Sector Chambers and Associations (UCCAEP) last week submitted a 1.62 percent proposal on behalf of employers.

“We have been applying methodology from 2011 that takes into account two variables: One is inflation and the other is growth of the country’s gross domestic product. This time, however, the GDP variable was not taken into account, as unemployment currently exceeds 8 percent,” Labor Vice Minister Alfredo Hasbum said.

UCCAEP President Ronald Jiménez said the business sector considers the increase fair as it is the result of normal negotiations between government officials, employers and unions, as established in the 2011 calculation formula.

“Our sector believes that the adjustment is positive, as it defends the purchasing power of the minimum wage without representing a threat to the competitiveness of the country’s businesses,”  Jiménez said.

Union leaders, however, were not as upbeat. Édgar Morales, leader of the National Union of Workers, said he is outraged by the approved percentage.

“We are absolutely dissatisfied,” he said. “Representatives of all three workers’ unions voted against it. … This does nothing to improve the situation for workers or to boost the country’s economy, since higher salaries would have translated into more purchasing power.”

Morales also criticized the position by the administration and employers not to approve a higher increase for unskilled workers such as coffee pickers and other agricultural laborers, who currently earn less than minimum wage.

“The government’s obligation is to ensure that every worker earns at least the minimum wage, but they wouldn’t even discuss it. The extra amount they approved for domestic workers doesn’t even cover daily bus costs,” he said.

New salary rates will take effect on Jan. 1.

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