QUITO — Ecuador’s President Guillermo Lasso decreed the monthly minimum wage be hiked nearly 6% to $450 for 2023, a measure that worries the country’s employers.
Lasso, a conservative former banker who took office in May 2021, announced the additional $25 wage increase after employers and workers were unable to reach an agreement, a move he is taking for a second consecutive year.
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“The country is doing well, we are growing, companies are selling and it would be good that this success is also shared with workers,” Lasso said on Wednesday night in a televised speech.
During 2021, the minimum wage remained frozen at $400. While in 2020, the pandemic forced a momentary reduction in private sector salaries to address the South American nation’s fiscal crisis.
The employers’ representative in the National Labor and Wages Council, Rodrigo Gomez de la Torre, told Reuters on Thursday that the president’s decision was more political than technical and legal because it does not take into account the effects it may have on job creation.
“There will be companies that will be able to afford it and there will be companies that will be forced to lay off or not hire more people and the pandemic taught us that through the use of technology we can replace jobs,” Gomez de la Torre said.
“We have higher and higher salaries, but fewer people with salaries, and jobs,” he added.
Ecuador’s unemployment rate stood at 4.1% in October this year, compared with 4.6% in the same month of 2021.
Lasso said he was fulfilling his campaign promise to progressively increase the salary to reach $500 by the end of his term in 2025. (Reporting by Alexandra Valencia Editing by Marguerita Choy)
