QCOSTARICA – A minimum wage comparison across Latin America by Mexico’s Financialred.com.mx provides an insight of what is earned in each country, in local currency and converted to US dollars, and its ability to cover basic needs.
The comparison between countries with similar conditions is a good reference for understanding the standard of living and purchasing power.
Costa Rica has the second highest minimum wage in Central America and third in Latin America, US$516 monthly. Venezuela tops the list at US$885 and Panama US$667.
The average monthly minimum wage across Latin America is US$354.
According to Salarionminimo.com.mx, in Latin America, Nicaragua has the lowest minimum wage at US$115 monthly, followed by Mexico at US$129. (Although Cuba is included in the list, with a minimum wage of US$23 monthly, it can be argued that conditions in Cuba are not similar to the rest of Latin America.)
Where it comes to purchasing power, Costa Rica tops the list, with a 567.28%. That is to say, the minimum wage of ¢283,799 colones monthly is 5 times the ¢50,028 cost of the Canasta Basica* (Basic Basket).
Click here for the Costa Rica Ministerio de Economia (Ministry of the Economy) report on the Canasta Basica items and price comparisons.
The lowest in purchasing power is Colombia, where the minimum salary covers only 49.57% of the Canasta Basica; in other words Colombians need more than 2 minimum wages to cover their basic needs. Colombia’s minimum wage is COP644.350 Colombian Pesos, while the cost of the Canasta Basica is COP1,300,000.
A similar situation is lived in Paragua, Peru and Ecuador.
In Central America, Nicaraguans also need two mininum wages to cover basic needs. The minimum salary in that country is 7.133 Cordobas, while the Canasta Basica costs 12.278 Cordobas.
What’s The Affect?
The inability to cover basic needs leads to a greater sense of injustice and inequality, reflected not only in organized violence, gangs and drug trafficking, but tugs at the social fabric of a nation.
What if the minimum wage is increased? Experts such as economits, politicians and businessmen say that increasing wages could affect a country’s econony.
Wages not enough to cover the basic needs of a person keeps the population in a permanent state of poverty.
* Although the Canasta Basica of each country varies, it is typically made up of a set of goods and services essential for a person or a family can meet their basic needs from their income; in other words, a basic basket is one that has all the necessary products in order to have a healthy life, both physically and mentally.