Ecuador Unions Say 9% Wage Hike Not Enough

Latin American Herald Tribune
Brings minimum wage to only around $218 a month, well below the $450 a month that the government estimates is needed to feed a family.

QUITO -- Ecuador's biggest labor federation, the FUT, considers the 9 percent increase in the minimum wage announced this week by President Rafael Correa inadequate, the press reported Friday.

FUT leader Mesias Tatamuez said the hike would bring the minimum wage to only around $218 a month, well below the $450 a month that the government estimates is needed to feed a family.

"Every year, the increase for the workers is a humiliation, because it's like begging for charity," the labor boss said.

Correa said Tuesday that the minimum wage would go up 9 percent beginning next month, though he did not rule out another boost in mid-2009 to expand workers' purchasing power.

He said the 9 percent figure was based on the forecast rate of inflation in 2009 and cited the international financial crisis as the reason for not mandating a bigger increase in base pay.

"Regrettably, in this context of crisis, we cannot - at least for the moment - augment" the minumum wage above the expected rate of inflation, the left-leaning president said.

Urging Correa to reconsider, the FUT's Tatamuez said that unions might convene protests and strikes to demand a larger wage increase.

Jaime Arciniegas, head of the smaller Ceosl labor federation, was even harsher in his criticism, calling the proposed wage hike a "mockery" of the workers.

Last year, the government improved the minimum wage by 17.6 percent to roughly $200 a month, the first increase since the dollarization of the Ecuadorian economy in 2000.

Correa, a U.S.-trained economist, says that bumping up the minimum wage by more than 9 percent could hurt businesses and lead to layoffs in an economy where the unemployment rate is already 10 percent.