The Panama Government has announced a two-year phased increase in the minimum wage, varying by business type.
It ranges from 4.5% to 7.0%. Doris Zapata, Labor and Workforce Development Minister, announced this in Panama City.
Small businesses will see a 4.5% rise. Large corporations will have a 6.0% hike. Banana industry companies will get a 7.0% boost.
This applies equally in cities and countryside areas.
The new rates start next Tuesday. They become effective in the second week of this month. The current average minimum wage is $636.80.
The Minister did not compare this with previous years’ adjustments. The highest minimum wage, $1,015.03, is for air transport mechanics.
The lowest, $341.12, is for small agricultural businesses.
This decision came after failed negotiations. Worker representatives and business leaders could not agree.
Zapata emphasized the country’s need for economic and social recovery. Everyone’s contribution is essential for national and people’s well-being.
She explained this was the reason behind the wage increase decision.
A tripartite social dialogue was used for the wage review. It involved commissioners but did not reach a final agreement.
However, it offered valuable insights for future analysis. Zapata is optimistic about Panama’s future.
She believes in the strength of all productive sectors. She also mentioned that economic growth forecasts for Panama are promising.
Background
Panama’s minimum wage hike mirrors broader Latin American trends, with Argentina and Chile raising theirs to $429 and $615 due to inflation and demand.
Ecuador is set to increase its minimum wage from $450 to $460, starting January 1, 2024.
President Andrés Manuel López Obrador has announced a 20% hike in the minimum wage for 2024 in Mexico.
A study by the cashback platform Picodi reveals that Uruguay’s minimum wage in Latin America stands at $424.
On the other hand, Paraguay will establish its new minimum wage at 2,680,373 Paraguayan guaraníes, roughly $383.
These wage adjustments are designed to safeguard the purchasing power of low-income earners and boost economic activity.