Wages are not enough for household expenses

Thousands of Panamanians perform miracles every day to stretch theirs salary until the end of the month and meet their basic needs due to the increase in the price of food and other services.

The evidence confirms that Panamanians were right to protest against high food prices in July 2022 and that the measures taken have mitigated the effects of this problem, he said. economic researcher Reyes Valverde in his studio: “In Search of a Fair Minimum Wage: Cost of Living and Purchasing Power.”

The economist refers to the low purchasing power that a large part of the population has due to the economic activities in which they participate.

An uneducated person, especially women, has to go to the home service market where she earns a maximum income of $315, which represents a purchasing power of $283.22, compared to a basic basket that exceeds $340.

In similar circumstances are thousands of workers in small restaurants, hotels and other small businesses whose wages do not exceed $380 to $390, with a purchasing power of $352.43 to $362.76, which apparently limits them to more than meet their biological needs. Valverde points out.

The results show that inflation of both fresh and processed food directly affects people who earn low incomes related to the domestic service sectors for private households, commercial, hotel and restaurant activities (small businesses and companies with more than 11 employees); while when workers are measured according to their profession, unskilled, salesmen and artisans or semi-industrial workers are at the top of the classification, according to International Standard Industrial Classification (ISIC) and classification by professions, the economist detailed.

In particular, close to 30% of the population does not have the means to meet their basic needs and security, says Valverde.

As we move away from the capital, inequality deepens, which generates interprovincial migration in search of better income,” he adds.

According to data from Ministry of Economy and Finance (MPEG), he caloric cost of a basket of basic family food pIt went from $330.40 in June 2022 to $342.02 in December of the same year, an increase of $11.62 during 2022.

This upward trend did not stop in January 2023, when the calorie cost of the basic family food basket reached $344.67, or $2.65 more than in December 2022, closing the first half of 2023 at $345.83.

Amidst this reality, workers and business people are debating what the minimum wage should be in Panama, the discussions that have held the table of the minimum wage, which is due to take effect from January 2024, are at a standstill.

Workers would demand a minimum wage of $1,000, a proposal that, although not firmly on the table, has already caused reactions in the business sector that warn of the consequences of such an increase.

In an economy, wages are never combined with price movements, there is always a large part of the population with very low wages, the economist pointed out.

Reyes Valverde maintains that the minimum income a household must have to meet safety and security needs in Panama is $1,810, or two minimum wages of $900.

The economist warns of the pressure that society exerts on those who do not have enough to make ends meet, which implies a poorly fed, emotionally marginalized population, social groups that even feel unworthy of participating in various activities, due to low means, he points out.

But, What prevents Panamanians from striving for better wages? The specialist believes that the main cause is the lack of education, as well as the need to open a professional spectrum based on the production process within the economy, which enables specialization and training of the domestic workforce.

He adds that the fact that 80% of the business fabric consists of micro, small and medium-sized entrepreneurs, who mostly lack the support of the state that increases them, offers more space for employment, and therefore better wages for the population within the country. labor market.

He Executive decree on the minimum wage which government in Panama considers 53 minimum wages, 73 economic activities; (36 with national salary); 20 occupations (19 with national salary).

Currently the country has 81 districts and they are considered 2 regions: Region 1 consists of 40 districts and the rest of the districts in Region 2, details Mitradel.