Yesterday, President Cristina Fernández de Kirchner announced an increase in the new minimum wage of 25.2%. The hike is to be implemented in two stages: by the 1st August, the minimum salary will reach $3,300 and by January 2014, it is to extend to $3,600 per month.
The decision was convened by the Minimum Wage Council after negotiations between businesses, trade unions, and the Labour Minister. The rise is consistent with the increases obtained in collective wage negotiations.
During the announcement, President Fernández also informed that the July half-year bonus (known as ‘aguinaldo‘) will be exempt from income tax. Those who have already paid the tax will receive a refund next month.
Speaking of the minimum salary, Labour Minister Carlos Tomada said “I want to highlight the dialogue between the businessmen and the workers as an example of the compromise of these players. It is very rewarding to arrive at this point.”
President Fernández also declared that the new amount was decided “unanimously”, and pointed out that “since 2003 the minimum wage has increased by 1,700% (…) This new minimum wage of $3,600 is the highest in Latin America.”
The measure was received with scepticism by the opposition-aligned unions. The head of the Judiciary Workers’ Union, Julio Piumato, denounced the process as “labour tripartism which asks friend to put a signature on a figure that is unreal.” Hugo Moyano from the General Labour Confederation (CGT) and Pablo Micheli from the Argentine Workers’ Union (CTA) did not take part in the negotiations, also condemning the decision. William Yanozi, a representative of the Agrarian Federation, also refused to attend so as “not to endorse this practice clerkship that they are trying to impose.”
Critics of the decision have estimated that a basic food basket, which is used to determine the cost of living, needs to be reviewed and that the minimum wage should be raised to $5,180 in order to compensate for the higher cost of living.