Q COSTARICA—Labor and education unions across the country marched on Wednesday to demand an end to the wage freeze. They are also demanding increased funding for the education sector to improve the quality of education.
The protest disrupted classes at the primary and secondary levels and also impacted services at the Costa Rican Social Security Fund (CCSS), as the march was joined by the Association of Secondary School Teachers (APSE), the National Union of Employees of the Social Security Fund (Undeca), and the National Union of Guidance Counselors (Sinapro and Related Professionals), among others.
The union members marched to the Ministerio de Hacienda (Ministry of Finance) in downtown San José, where they presented a document calling for transparency regarding the debt-to-GDP ratio and, at the same time, the reinstatement of the wage negotiation commission.
Long Wage Freeze
After five years of a wage freeze, public sector employees will receive a salary increase next year.
However, this could be a false hope, as Costa Rica’s economic conditions are expected to freeze cost-of-living increases again in 2027.
Preliminary estimates suggest that the debt-to-GDP ratio will once again rise above 60%, triggering the fiscal rule.
This rule, passed during the Carlos Alvarado administration (2018-2022), restricts public spending and salary increases for government employees when the national debt exceeds this threshold.
Fernando Rodríguez, an economist at the National University (UNA), indicated that this decision will depend on an update to the metrics used by the Central Bank to measure various macroeconomic variables.
“The Central Bank announced this Wednesday that it will revise upward, so to speak, some growth and production estimates from recent years, which could positively affect the debt-to-GDP ratio. Therefore, we cannot rule out the possibility that this index will fall below 60%; we must wait for these statistics to be released to gain a clearer picture,” Rodríguez said.
The specialist added that the five-year wage freeze has caused state workers to lose purchasing power, while also warning that the government “went overboard” with salaries, as evidenced, for example, by the exodus of specialists from the Costa Rican Social Security System (CCSS).
Next year, public employees will receive a salary increase, but with exceptions.
This is because the debt-to-GDP ratio closed at 59.9% in 2024, and has remained below the minimum threshold of 60% throughout this year, as required by the fiscal rule.
However, the increase will not apply to all state workers; exceptions will apply.
The Public Employment Law, which came into effect in March 2023, established a maximum overall salary per position for the entire public administration. The idea is that an employee with the same skills and responsibilities should earn the same salary anywhere within the government, thus avoiding the imbalances and the snowball effect of the previous incentive system.
Under this premise, if an employee’s salary was above the overall salary when the Public Employment Law came into effect, their compensation cannot increase further until the salary scale assigned to their category reaches the same level.