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Panama’s Minimum Wage For Workers, and the Politics Related to Wage Increases


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The matter of wages and minimum wages, enrollment in social security programs, etc., is ripe with opportunity for expatriates to become exposed to actions in the labor courts. Please do not consider information posted in this topic as legal advice. We recommend that those dealing with employees seek competent professional advice.

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Here is the chart in English.  Boquete is Region 1

http://www.businesspanama.com/about_panama/investment/labor_salaries.php

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NOTE BY ADMIN_01: Per the originator's request (see below), the referenced document has been obscured because it was incorrect information.

 

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It is interesting to note that the average increase of the minimum wage or salary is around 8% in general.   It is obvious that workers and their unions are not happy because they consider it should be higher and they were aiming for something like 50% !!   For some of them it is not enough to cover the Canasta Basica Familiar but the increases are done based on the economy expectatives and in a way that doesnt affect the economy in general, the price level of goods and services and business.  

Those workers doesnt understand that it is the minimum wage and some workers are earning more than that.  Also that when the minimum wage or salary increase the other salary levels tend to accomodate accordingly and increase too.   

This chart is a good information for some of you that owns business and have people working for you.   

 

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An 8 percent increase in the minimum wage?? Soon places like "International Living" will need to raise their dollar estimate of necessary money to live in Panama.

Willing to pay more for better quality and good customer service (no talking to a friend on phone when I'm waiting to purchase an item).

There is a direct relationship between salaries and cost of items like tomatoes, eggs, rice, beans, and other items. As salaries go up so do all prices for other items.

Just my opinion but soon expats will choose another country for retirement living.

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13 hours ago, JudyS said:

I did a search for "Panama minimum wage law 2016" and this came up.  It's wrong.  It's the old law.  Could the moderator please delete the whole post?

Never mind.  Hil posted the right one.

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On December 25, 2015 at 1:42 PM, Pat said:

An 8 percent increase in the minimum wage?? Soon places like "International Living" will need to raise their dollar estimate of necessary money to live in Panama.

Willing to pay more for better quality and good customer service (no talking to a friend on phone when I'm waiting to purchase an item).

There is a direct relationship between salaries and cost of items like tomatoes, eggs, rice, beans, and other items. As salaries go up so do all prices for other items.

Just my opinion but soon expats will choose another country for retirement living.

With the increase in menu prices, sounds like the local restaurants (Baru and La Posada) heard about the 2016 minimum wage increase.

P.S., I'm looking for more ways to cook and serve sweet potatoes and any other food I can prepare at home. Suspect other expats will do the same.

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The Government must now establish new minimum wage rate

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After four months of having formed the National Minimum Wage Commission (CNSM) the Minister of Labor, Luis Ernesto Carles, reported that there was no agreement and it will be up to the Executive to establish the new minimum wage. Through his Twitter account @LE_CarlesR the Head of the Labor Ministry thanked the contribution of employers and employees who since August 16 were part of the CNSM.

The National Council of the Private Enterprise (Conep) attributed the lack of consensus to the methodology used at the negotiating table. Conep described the formula proposed by the Ministry of Labor and Labor Development as improvised, being different from the one used in 2015 when the last minimum wage adjustment was made. In a statement, the entity that groups various private sectors asked: “the National Government to fulfill the role it has to play now and review the minimum wage, objectively and scientifically, without pre-electoral influences and thinking first of the competitiveness and sustainability of the jobs of thousands of Panamanians”.

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Minimum Wage: Negotiation begins in Panama

The union sector aims for a minimum wage of $1,040 by 2020, but employers say the current economic situation does not lend itself to substantial increases.

Wednesday, October 16, 2019

Workers, employers and government representatives in Panama are discussing adjustments to the minimum wage, the changes to which must come into effect on January 1, 2020.

You may be interested in "Panama: Minimum Wage Rises by 6.5%"

Genaro Lopez, general secretary of the National Confederation of Trade Union Unity (Conusi), told Laestrella.com.pa that "... According to our economists, the household that does not receive $1,040 cannot satisfy its basic needs. In addition, this would be an orientation for the new salary to be at least in that figure."

Severo Sousa, former president of the National Council of Private Enterprise (Conep), explained that "... the sector does not disagree with an increase, rather they do not support the excessive income that is not in accordance with the current reality. We have become accustomed to an increase in salary; however, the law does not establish that it should be increased, but rather talks about revising it. The country's current economic situation does not lend itself to further increases."

The minimum wages that are in force in the country are differentiated, and for the years 2018-2019 were set at $721 for Region 1 and $563 for Region 2.

 

https://www.centralamericadata.com/en/article/main/Minimum_Wage_Negotiation_begins_in_Panama

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OPINION; The minimum wage dilemma

Posted 14/12/2019

The discussion of the minimum wage is a ritual of disagreement that is repeated every two years. Those who sit at the table should be accompanied by the most diverse representations of micro and small businesses, unemployed, self-employed and even a spokesperson for the growing sector of young people who neither work nor study.

The minimum wage is less and less relevant in a labor market with an informal labor sector as large as the Panamanian. The fundamentals of capitalist economies are very simple: there has to be a demand that justifies an offer. The economic growth figures for the year ending are only 3.5% of GDP. Hundreds of companies have fired  employees and the change of government has resulted in the dismissal of at least 12 thousand public servants.

Those were salaries that paid bills and produced other jobs. To these realities is added the increasing automation of work, which makes the real dilemma of the minimum wage is not to maintain or increase it, but to preserve existing jobs and generate new jobs. LA PRENSA, Dec. 14

 

https://www.newsroompanama.com/opinion/opinion-the-minimum-wage-dilemma

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Minimum Wage Increase = Unemployment and Informality

The Panamanian business sector believes that increasing the minimum wage under current conditions will generate more unemployment and increase informality in the labor market.

Wednesday, December 18, 2019

With the possibility of an increase in the minimum wage next year, the National Council of Private Enterprise (Conep) insisted that in the context of the economic slowdown, it is not possible to increase workers' pay.

You may be interested in "Never-ending Struggle for Minimum Wage"

Julio De la Lastra, president of Conep, told Prensa.com that "... We are optimistic that the country's economy is moving forward, that is why we are respectfully requesting a year to be able to evaluate how that economy will be and to make the same analysis so far."

The article adds that "... Businessmen say that each 1% increase in the minimum wage represents an additional $30 million in payroll for all businesses in the country, with the greatest impact on small and medium businesses, which represent 96% of the business park."

Since workers and employers did not reach an agreement, the government will have to decide whether or not to make adjustments in the minimum wage for the periods 2020 and 2021. The decision will have to be communicated before the end of the year.

https://www.centralamericadata.com/en/article/main/Minimum_Wage_Increase__Unemployment_and_Informality

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Wage increase will increease layoffs - business group

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Posted 18/12/2019

A wage increase  in the current economic slowdown would impact businesses, create layoffs  and lead to  bankruptcies   says the National Council of Private Enterprise (Conep),

.Julio De La Lastra, president of the Council said on Tuesday, December 17  that the position of the sector is based on the fact that the adjustment to the salary would have repercussions on the existence of jobs and companies if the decision is not handled in a balanced way. He explained that a 1% increase in the minimum there is an additional annual $30 million payroll expense that companies will have to face, especially small and medium-sized enterprises (SMEs), which make up most of the business fabric of the country and that have been reporting lower income.

“SMEs represent more than 90% of companies in the country. Any adjustment to the salary at this time will impact operations and increase layoffs, ”said De La Lastra.

 

https://www.newsroompanama.com/business/wage-increase-will-increease-layoffs-business-group

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Minimum wage up 1 to 8%

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Doris Zapata

Posted 31/12/2019

A minimum wage increase ranging between one  and eight percent   depending  on the economic activity was  announced on Tuesday, December 31 by the Minister of Labor t, Doris Zapata

In the case of education, free zones, hotels, agriculture, and water supply the increase will be 1%, while in the area of Bocas del Toro where banana companies operate the adjustment will be 8%.

On Monday, December 30, after an 8-hour meeting of the Cabinet  Council  Zapata said the business sector and labor unions failed to reach an agreement at the negotiating table.

So the Government conducted a study of each economic activity and determined the increase would be according to the growth registered by that each of the activities during the year, said the Minister.

The adjustment for the majority of workers who are in the minimum salary range would be 3.3%, but did not give details of how much this increase represents in money, claiming that everything will depend on the classification of economic activity.

Workers with companies in the agribusiness sector, they will receive an adjustment of 5 cents an hour to  $1.58, while those in wholesale trade will receive an adjustment of 9 cents.

The decree, which will take effect from January 15, and must be published in the Official Gazette along with economic activities that increased from 34 to 37 with a reclassification of some sectors such as casinos, radio stations and supermarkets.

In the case of the stations, the said that in the case of radio it is not the same for a station with national coverage, as for  those that only operate in some provinces of the country.

 Likewise, a classification by supermarkets with more than 5 branches was carried out.

The business sector had indicated that the economic conditions of the country did not allow any adjustment to the minimum wage that is reviewed every two years and which impacts more than 290,000  workers nationwide.

 

https://www.newsroompanama.com/business/minimum-wage-up-1-to-8

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“Worst ever” minimum wage adjustment

conatoj.jpeg

Posted 01/01/2020

The   new minimum wage adjustment which  ranges  from,  1% in the struggling  hotel sector to  8% in the  “green gold” banana sector is  the “worst-ever says The National Council of Organized Workers (Conato)

In a press release issued after the government’s December 31 announcement the Conato asserts that the adjustment "is outrageous and a grievance for the life of the working population, since in some sectors" 1%  translates into just two cents hour …This new salary is really insignificant especially for the most humble and impoverished sectors of the country. It is clear that this government pleases businessmen, who imposed their interests without support in any indicator," said the statement.

Conato said  that Panama closes the year with the highest economic growth in the region and has the best projections (5%) for 2020, but  despite this the announced salary adjustment is significantly below the adjustments approved in other Latin American countries with lower growth than Panama.

 

https://www.newsroompanama.com/business/worst-ever-minimum-wage-adjustment

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OPINION: Productivity off the table

pro.jpg

Posted 03/01/2020

Some 290.000 workers will benefit from the increase in the minimum wage, which is 3.3% on average. The increase ranges from 1% for workers in the education and tourism sector, up to 8% for workers in the banana plantations. The untimely decision was announced in the last minutes of the old year, reflecting the pressure of the banana plantation sector Bocatoreño.

 The human drama of families that depend on the minimum wage cannot be ignored, however, the effect that this economic decision has on the unemployed and the cost of doing business in Panama is underestimated. The best way to increase the income of a worker is to increase their productivity, improving their education and the technology of their work. Again, this was out of the discussion.- LA PRENSA Jan 3

 

https://www.newsroompanama.com/opinion/opinion-productivity-off-the-table

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Wage increase  will be reflected in transport and construction

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Posted 05/01/2020

The adjustment of the minimum wage that will take effect from t January 15 will reflect most  in the transport and construction sectors

In these sectors, the increase per hour ranges from 9 to 22 cents an hour , as established on December 31, 2019.

The Executive decreed an average increase of 3.3% for the minimum wage, the lowest of all adjustments since 2011.

In practical terms, the increase may represent between $8 and $30 per in worker pay packets, depending on the economic region.

 

https://www.newsroompanama.com/business/wage-increase-will-be-reflected-in-transport-and-construction

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