More than 2.3 million workers will not receive an increase to the minimum wage, according to the UFG country report |El Salvador news
The increase to the minimum wage that will enter into force on August 1 is not the solution to enhance the economy of Salvadorans, since the increase will only benefit 580,000 workers and instead will make prices more expensive for all consumers, says the socioeconomic reportMade by the Public Policies Observatory of the Francisco Gavidia University (UFG).
The 2021 country situation report details that in 2019 the Multiple Purpose Household Survey (EHPM) registered 2,897,130 employed workers and that at 2021 there would be around 2,918,200.
He adds that the ISSS (Salvadoran Social Security Institute) reported 808,911 workers working in the “formal” sector to May of this year, of which 184,657 are public employees and 624,254 of the private sector, which represents 27.7% of workers in the country.Therefore, there are 2,109,289 (72.3%) that works in the informal sector.
According to records, there are 5,740 public servants and 75% of the people working in the private sector receive minimum wage (around 468,500 people), which implies that some 474,000 people will receive the salary increase, representing 16.6 % of the total employed workers of the formal sector, details the UFG report presented by researcher Claudio de Rosa.
And if that is added that 5% of the workers in the informal sector (106,000 people) achieve a minimum increase in the salary, then there would be about 580,000 people (19.9%) The beneficiaries of the measure, which leaves out of the increase to 2,338,200 workers in the informal sector, that is, 80.1 %, explained Rosa.
The minimum salary council approved a 20%rise in early July, after Bukele's request.
All this panorama is not good for the working class and less for the unemployed, since, according to the economist, not only the prices of the products increase."The risks are in principle that people stop hiring, because if they planned.
Jobs to recover
Another important point that highlights the report is that by the economic recession in 2020, 71,605 formal jobs were lost, of which 29,351 jobs have not been recovered."And this will take several years to recover," said the researcher.
"This will put a brake on employment recovery, since there are still 29,000 formal jobs to recover, because in the informal sector there is no minimum wage, nor are there benefits and remember that they represent 80 % of the workers," said Rosa.
The document also emphasizes that the poverty population will increase.
According to EHPM data, 32.2% of the population (2.18 million people) would have lived in poverty in 2020, but the number has increased, since 2021 would be reaching 33.3% (2.28 million people).
“But special attention should also be paid to people who live in extreme poverty, who are around 476,000, that is, 7 % of our population lives in these conditions, at serious risk of malnutrition and this is where the government should at least intensifyThe delivery of food baskets, ”said the economist.
By consulting the exhibitors of the report what they think about the only labor offer observed by the government for the poorest youth is to be an element of the armed force, as Leonor Selva, Executive Director of Anep, Oscar Picardo, Oscar Picardo, recently pointed out,Director of the Institute of Science Innovation (ICTI), replied that it seems that it is not the most democratic or integral path.“Other types of investments could be made;Every year six out of ten students are lost and those six will swell the ranks of migration, gangs and low remuneration jobs, when it could be reversed in educational opportunities and possibilities and that would facilitate the decrease in crime and crime, ”he explainedPicardo.
Public debt rises
Total public debt, which includes a financial sector, increased $ 675 million, compared to last December, indicates the report of the Franciso Gavidia.
According to the aforementioned data, between January and May 2021, it increased by $ 2,046 million and reached $ 23,298 million, that is, 89.8 % of GDP (Gross Domestic Product).
“It is important to note that although the governments that increased the most debt have been those of Maurico Funes, in five years;Salvador Sánchez Cerén, in five years, it must be emphasized that in two years the government of President Nayib Bukele is almost over to overcome them, which is largely due to the pandemic, ”said Rosa.
Experts showed concern about debt growth and recommend reorienting the general budget of the Nation on two ways: reduce spending in 2.4% of GDP and increase tax income by 1.6% of GDP, to contain the deficit and indebtedness, if you want to make an agreement with the International Monetary Fund for a loan of $ 1.3 billion.
The UFG report also exposes recommendations for the Government to easier its efforts to enhance the economy.One of them is to establish a national plan against poverty and hunger, explained Roberto Morán, dean of the Faculty of Legal Sciences.
It is also necessary that the government clearly defines the relations with the United States, the main commercial partner and majority source of family remittances, as well as with China for the projects to be carried out.