Paraguay Raises Minimum Wage, but Most Workers Still Struggle

Paraguay’s government has decided to increase the minimum wage by 3.6% starting July 1, 2025.

The new minimum monthly salary is set at 2,899,048 guaraníes, which is about $368 at today’s exchange rate.

This change follows the country’s law that says the minimum wage should go up when prices rise, using the official inflation rate as a guide.

The National Minimum Wage Council, which includes government, business, and worker representatives, recommended this increase. Their goal is to help workers keep up with the cost of living.

However, the government admits that this method does not always mean workers can actually buy more, especially when the prices of basic goods go up faster than the official inflation number.

Only about 282,000 people in Paraguay, a small part of the workforce, actually earn the minimum wage.

Most workers—about 62%—work in the informal sector, where employers do not always follow the law. This means most people will not see a change in their pay because of this new rule.

Paraguay’s job market has improved a bit. The unemployment rate dropped to 5.6% in early 2025, the lowest in eight years.

More people have formal jobs, and the government says that private sector jobs have grown by over 43,000 in the last year.

Paraguay Raises Minimum Wage, but Most Workers Still Struggle

Still, many workers are either underemployed or do not have regular work. Worker unions say the new minimum wage is not enough to cover the real cost of living.

They want a bigger increase, arguing that many families cannot afford basic needs even with the new wage. Unions have asked for the minimum to be raised to about $500 per month.

Compared to other countries in the region, Paraguay’s minimum wage is lower than in Chile and Uruguay, but higher than in Brazil.

The government’s approach focuses on following the law and keeping up with inflation, but it does not solve deeper problems like high informality and low wages for most workers.

In short, Paraguay’s new minimum wage gives a small boost to some workers, but most people will not benefit.

The change shows that while the country is following its rules, many workers still face tough times.