Increase in the minimum wage to S/ 1,000 will promote greater informality in the country, experts say
An eventual increase in the Minimum Vital Remuneration (RMV) from S/ 930 to S/ 1,000, as announced by President Pedro Castillo in Ayacucho this Wednesday, will generate greater informality and more unemployment in the country, according to specialists consulted on the subject.
For the former Minister of Economy and president of the Private Council for Competitiveness, David Tuesta, the message of raising the minimum wage does not have any kind of technical support, but pure voluntarism precisely in a scenario where the labor market is informal.
“The minimum wage will not even affect those who work in large companies, because they pay, in many cases, more than S/ 1,000, but it will cause uncertainty for those who work in medium and small companies because that pushes them towards informality or fire employees”, he referred to this medium.
He added that this announcement is in line with the ideological vision of the head of state and puts the institutionality of the Ministry of Economy and Finance (MEF) in trouble, an entity that a few months ago opposed the measure of raising the minimum wage for now. .
In that case, the economist argued that the MEF must show a technical report justifying that the increase in the minimum wage will not affect the economy.
More layoffs
As recalled by the labor lawyer Ricardo Herrera, main partner of the Muñiz Study, the Central Reserve Bank (BCR) prepared a report where it mentions that for each sol of increase in the minimum wage there are 910 people who leave the payroll.
"There will be more than 6,000 Peruvians who would leave the starting payroll and the few hiring expectations that were had for next year will fall more, given that for every sun that the employer pays there is 50 cents of labor cost," said the lawyer. to this medium.
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In this sense, Herrera indicated that it is inappropriate for President Castillo to intend to increase the Minimum Vital Remuneration (RMV) at a time when companies are on their way to recover after the strong blow as a result of the pandemic.
“This is a populist measure just at a time of political crisis with the issue of promotions in the Army and FAP. Let us remember that in the pandemic we lost 1,600,000 formal jobs and only 900,000 were recovered, so there are about 700,00 that are still missing and if you increase the vital minimum for the employer, that will generate an opposite effect for hiring, ”he explained.
Likewise, the laborist commented that the worker who will not be able to pay his workers that increase of not less than S / 1,000 will not have another option but to dismiss the worker or send him to the informal sector. He stressed that there are currently approximately 250,000 in the formal sector who earn the minimum wage.
“The increase they intend to make is almost 10%, so the question is: has the Peruvian economy increased by 10%? In addition, this type of measure must be adopted within the framework of the National Labor Council”, he pointed out.
Only two of 10 ten workers would be benefited
For its part, the Payet, Rey, Cauvi, Pérez study considered that only two out of ten workers would benefit from the increase in the RMV announced by President Pedro Castillo.
“The rest, which would involve 9.01 million workers in the urban area alone, would remain unprotected, without receiving the RMV, or the other benefits granted by Peruvian labor legislation (legal bonuses, CTS, vacations, among others), without access to coverage in social security health - EsSalud and pensions, and with a higher risk of suffering accidents at work, as well as being victims of harassment and other mistreatment, "he said.
Thus, he recommended that the Government should focus on attacking labor informality, which is the main problem in the Peruvian labor market.
“It should focus on designing incentives to achieve greater formalization of the Peruvian labor market, and not on dictating populist measures like this, less so in a context of growing political and economic crisis, like the present one,” he ratified.