Paraguay 11/04/11

Paraguayan council recommends readjustment of minimum wage and Venezuelan MP’s plan a lobby to overcome last hurdle towards Mercosur.

This week, Paraguay’s Consejo Nacional de Salarios Minimos (National Council for Minimum Wage – Conasam) reacted to workers’ demands and voted in favour of a minimum wage increase (no exact amount was specified), recommending the executive branch take the necessary steps towards its readjustment.

According to Labour director Filemón Delvalle – who voted for this initiative based on the principle of ‘equality and compensation’ – the government should change the minimum wage mainly because the last two readjustments during Lugo’s administration cut workers’ wallets by 4,1%.

The single vote cast against this decree came from a spokesman for the business sector, Aniano Ramón Onué. Onué argues that as this year’s inflation (9,8%) did not reach the 10% limit since its last increase, there is no legal basis (as prescribed by the Labour Code) for such demands.

On Friday, negotiations took place between President Fernando Lugo, a team of economists which accompanied him and five labour unions. Workers demanded an increase between 15 and 32%, threatening to go on strike if the government failed to yield to these numbers.

Lugo and his team put their foot down for an increase between 10 and 15%, which did not appease the unions, and as a result the meeting was adjourned until next Monday.

In Paraguay, the concept of minimum wage only applies to the private sector. It is currently set at US$373 (1,507,484 guaranís), but only 15% of the country’s workforce operates under the minimum wage regimen.

When it comes to domestic workers (i.e. the occupation of 2 out of every 10 women in Paraguay), for instance, their actual minimum wage is usually 60% less. Furthermore, in 2001 the World Bank estimated that 36% of the population had an income which was below the poverty line.

This silent majority presents a social framework of precarity against which the private sector’s minimum wage can be easily translated into ‘high earnings’ within the national context, seeing as it represents almost double the average salary (US$150-200).

With only 15% of a ‘highly-paid’ work force (according to Paraguayan standards) to satisfy, the government’s unwillingness to yield to the 15-32% increase is unsurprising.

It becomes even less surprising with the revelation that unions in Paraguay hold considerably less power than in other Latin American nations such as Argentina – it only has 7 labour unions, with less than 100,000 members in total.

In other news, members of the Venezuelan parliament are looking to create a lobby in Paraguay for the long awaited integration of their country into the Mercado Común del Sur (Southern Common Market – Mercosur).

Starting around May 2011, this would involve a constant ‘debate’ with the Paraguayan Senate, as the president of the Venezuelan Parliament Rodrigo Cabezas stated, adding that the ‘political and technical aspects of the negotiation’ would be handled by the chancellor Nicolás Maduro.

As Pulsamerica reported last month, the Paraguayan Congress remains the last hurdle for the full integration of Venezuela, since Brazil, Argentina and Uruguay have already formalized their support for the initiative.