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Minimum Wage Adjustment Could Lead to an Increase in Poverty in Guatemala

LADB Article ID: 79867
Category/Department: Guatemala
Date: 2016-01-21
By: Louisa Reynolds

On Dec. 31, the Guatemalan government caused controversy by approving a new minimum wage for apparel and textile factory workers in four municipalities in eastern Guatemala that is 23% lower than the minimum wage paid in the rest of the country. The new salario mínimo diferenciado (“differentiated minimum wage”) of US$255.46 a month will apply to apparel and textile factory workers in the municipalities of Masagua, in the department of Escuintla; Estanzuela, in the department of Zacapa, and San Agustín Acasaguastlán and Guastatoya in the department of El Progreso. The legal minimum wage for textile and garment factory workers in the rest of the country is US$331 a month. The decree has caused controversy as the country’s highest court, the Constitutional Court, ruled in September 2015 that such a minimum wage adjustment would be unconstitutional.The United Nations, Guatemala’s Human Rights Ombudsman’s Office, labor unions and local think tanks have raised concerns that the new minimum wage does not cover the cost of the basic foodstuffs needed to feed a family of five (the Guatemalan average) and could thus push thousands of workers below the poverty line in a country that already has one of the worst poverty indicators in the Western Hemisphere.

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