Business criticism: Ecuador raises the minimum wage 6.25% for 2022

RIO DE JANEIRO, BRAZIL – Lasso, a former conservative banker who took office since May, announced Monday night in a televised speech the increase in the minimum wage, the highest in the last eight years, as part of measures to reactivate the economy, hit hard by the pandemic of Covid-19.

“It must be recognized that this is a decision that involves a great effort for the business sector, but it is a fair benefit that corresponds to the workers’ sector,” Lasso said Tuesday in an interview with local radio stations.

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The basic salary remained frozen at US$400 during 2021 and, in 2020, the pandemic forced a momentary reduction in wages to face the country’s fiscal crisis. Lasso said that the economy is normalizing and that for this year, he expects economic growth of 3.5%, a recovery after the 7.8% drop in 2020.

The government has said that in the first four months of management, they have created some 275,000 new jobs and are managing to reduce a large fiscal deficit.

“It is not technical to increase salaries excessively because it could generate an adverse effect on employment,” said the president of the Chamber of Industries and Production of Ecuador, Pablo Zambrano, to a local radio station. And he added: “What do we get by fixing salaries by decree if there is no sustenance in the economy.”

“It is necessary to analyze economic growth, productivity, and economic recovery, and those factors in Ecuador, as a result of the crisis, do not exist,” he remarked. Lasso’s announcement is known when workers and employers discussed setting the salary amount based on projected inflation for 2022. Lasso said he was fulfilling his campaign offer to progressively increase the salary to reach 500 dollars at the end of his mandate in 2025.

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