Thursday, June 8, 2023

“It’s not enough for me”, the salary reality of impoverished Central America

“It’s not enough for me”. This is an affirmation that is repeated throughout the impoverished Central America the masses of workers who earn an insufficient basic salary that pushes many to informality or emigration.

With nearly 50 million inhabitants, the precarious salary Along with violence, they are the great promoters of the flight to North America of thousands of Central Americans, who with their remittances have become pillars of economies locked in a vicious circle of informality and labor poverty.

The International Labor Organization (ILO) indicated in its most recent report on the Latin American labor outlook that in the post-pandemic the “most urgent” problem in this area for the region “is that of the quality of employment and the insufficient labor and total income generated by workers and your families”.

Added to the low income is now the crisis global inflationary pressure, which is undermining an already restricted purchasing power in the vast majority of the Central American region.

In this context, the ILO has alerted Latin America and the Caribbean on the “phenomenon of the poor worker”, that is, “those people who, even having a job, even a formal one, can find themselves in a situation of poverty”.


The level of minimum salary in Central America it ranges from US$213 in Nicaragua, a country with a per capita income of US$2,102.8 according to 2021 data from the Central Bank, to US$640 in Costa Rica (US$12,333 per capita income in 2022) and Honduras ( US$ 3,010 per capita in 2021).

In Guatemala, with a per capita income of US$5,456 according to the Central Bank, the monthly minimum wages depending on the sector can range between US$381 and US$403.

In Honduras, the lowest minimum wage is US$331, and in El Salvador, with a per capita income of US$4,551.2 in 2021, according to the World Bank (WB), it is 243, while the highest in the latter country reaches US$ 365.

In Panama, with a per capita income of US$ 14,617 in 2021, according to WB data, there are dozens of minimum wages, depending on the activity and area of ​​the country. But in a round figure, this income reaches US$380, economist Felipe Argote told EFE.

In these countries, unemployment ranges from 2.6% in Nicaragua to 11.8% in Costa Rica, going through 8.7% in Honduras and 9.9% in Panama, while informality is around 50%.

In NicaraguaAccording to independent economists such as Adolfo Acevedo, more than 70% of jobs correspond to the informal sector, where wages are low and without access to social security.


Mrs miraclesa 69-year-old Panamanian retiree who rounds up her pension by working in cleaning services, told EFE that at the end of the month she does not have enough money to cover all the expenses of her house, which she shares with her now unemployed daughter.

The “retirement is mortgaged” with the payment of a loan and the light and food are increasingly “more expensive,” explains this widow, mother, grandmother and former employee, who earns around US$ 700 a month between retirement and her job cleaning in offices.

But income Milagros, the fictitious name of this widow from the interior province of Coclé, is just under double the minimum wage in Panama.

“The poor jobs they do not collaborate with the economy”, Argote affirms to EFE, and accuses the Panamanian state of implementing a “very old concept that to preserve jobs” workers must be satisfied “with very little” salary, a situation that promotes informality “because it is better to sell things on the street than to be in some formal jobs that pay less” .

In Guatemalathe minimum wage “is 40% below the cost of the basic food basket,” the economist Luis Linares, a researcher at the Association for Research and Social Studies (Asies), explains to EFE.

“Low wages, difficulty to find a good job and the lack of efficient public services end up driving irregular migration to the United States because salary levels cannot be compared,” added Linares.

This is a reality that is also lived in The Savior or in Honduras, where according to the director of the Honduran Observatory of the Labor Market, Cándido Ordóñez, a family must earn at least three minimum wages to cover the cost of the food basket, payment of basic services and housing rent.

In Costa Rica, the most recent report of the National Institute of Statistics and Censuses (INEC) points out that in 2022 the average household income was about US$1,878, 3.2% more than in 2021, but it was not enough to offset the 10.06% year-on-year price increase (as of July 2022).


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