The Minimum Wage in Uruguay Is Rising Too Fast
The minimum wage in Uruguay has increased to 15,000 pesos per month, a rise of 12.5% yearly from nine percent the year before. Uruguay is catching up with advanced economies, but the minimum wage in Uruguay remains much lower than in the U.S., Canada, and Western Europe. But if Uruguay has any lessons to teach us, it’s that the minimum wage is rising too fast. And the country is doing it by hiring domestic workers who are not as skilled as Expatriates.
Expatriates pay above minimum wage to domestic workers
Expatriates in Uruguay have traditionally paid above minimum wage to domestic workers, but the recent rise in minimum wages in Uruguay has sparked controversy. Despite recent increases, labor groups in Uruguay have said that these wages do not keep up with local costs of living. As a result, the 2019 law will allow the Salary Council to review wage levels. The official inflation rate in February 2019 was over 7%.
Minimum wage is equivalent to US$93 per month in Uruguay
Uruguay’s minimum wage is equivalent to US$93 per month. The standard working week is forty-eight hours for industry and commerce, with a minimum of thirty-six hours of rest. Workers in Uruguay are entitled to overtime pay for hours worked over forty-eight. The national retirement age is sixty years old, and employers must pay at least 50 percent of their workers’ pay toward social security. The government also mandates that employers pay taxes equal to the employee’s wage.
Investment in Uruguay is encouraged by the Uruguayan authorities, both foreign and local. The Uruguay Investment Law guarantees repatriation of capital and profits, and the country’s tax system does not favour foreign investors. Investment in Uruguay is encouraged through a general promotion system as well as through special promotions for specific activities such as the exploitation of non-exploited raw materials. Local workers are skilled in exploitation of these resources and are paid a minimum wage equivalent to US$93 per month.
Minimum wage will increase in Venezuela
The minimum wage in Venezuela is set to rise again in just a few days. Venezuelan President Nicolas Maduro has ordered the increase for the eleventh time in as many months. The basic salary will rise by six7%, from 64 U.S. cents to $2.40 a month, and state workers will also receive a food bonus of 200,000 bolivars. The government has been struggling to keep up with hyperinflation and is trying to increase its standard of living.
Despite the recent increase in the minimum wage, it remains below the minimum wage in most formal jobs. In fact, the minimum wage is one of the lowest in the world, pushing many professionals to leave the public sector. The government blames the lack of revenue from sanctions for the current state of the economy. As a result, the government has been forced to de facto dollarize the country, despite the fact that most Venezuelans still live below the poverty line.
In the beginning of 2019, Venezuelan oil revenues stabilized and wages could soon be set at one or two Petros. While the Petro was initially meant to be a cryptocurrency, it has since been mainly used as a unit of government spending. The value of a single Petro has hovered around $60, which is roughly equivalent to the price of a monthly food basket. With such low wages, many public sector employees have moved to the private sector, or even abroad.
While there is much to be said about the minimum wage, in both countries, the proposed increase is not necessarily a radical one. The proposal was conceived as a gradual three-fold increase and a call for the country to consider other alternatives. In Mexico, the opponents of the proposal largely ignored this document. But it is worth noting that the proposal to increase the minimum wage has attracted a large number of supporters and detractors.
It is worth noting that the minimum wage issue was the hot topic of the elections in Mexico and Uruguay in June 2015. The PAN party and former Secretary of Labor Javier Lozano made their stance clear during the campaign. But Lozano was not able to convince the Senate to support his initiative. The right wing party, PAN, was most aggressive in pushing the proposal, causing the government to back down from its policy.
The two countries have a similar history, although the current distribution is less equal in the former. The median income of the richest quarter of the population is only about 15% of the country’s GDP. But Mexico has some of the richest people in the world. After Brazil, it has the second-largest number of billionaires in Latin America. Moreover, the country’s richest people have the highest share of the GDP.
The debate over the minimum wage in Uruguay and Mexico is political and ideological. While there are technical arguments against a minimum wage, it should be remembered that these objections are largely ideological and political in nature. While the technical group behind Mexico City’s initiative recommends a new labor policy and other measures in the labor market to ensure income equality, the political will is not sufficient to implement the proposal. These countries’ governments have to make sure that it is popular.
On May 1, the minimum wage in Uruguay and Ecuador will increase to approximately S/ 1,025 per month, which is roughly equivalent to US$ 313 per month. The minimum wage in these countries is also known as the minimum living wage. While some countries set minimum wages to low amounts, others are more generous and offer higher wages. In addition to the minimum wage, these countries also have different laws governing overtime pay, which compensates employees for extra hours worked.
In contrast, Uruguay has a more progressive social contract than most Latin American countries. In addition to raising wages, it has a social safety net that covers nearly 90% of the population. The country has one of the highest pension coverage rates in Latin America, with 90 percent of its population older than 65 covered by the pension system. The Uruguayan minimum wage is much higher than that of Ecuador, and it provides a basic level of income for those in need.
The income tax in Uruguay is relatively low, with a nontaxable minimum established by law. In addition, income from abroad is not subject to taxation under the source principle. There are also several tax exemptions for capital income. Interest on public debt is exempted, as is income from capital leases. However, the income from these sources is limited to a certain amount. This makes it difficult for many workers to get by on minimum wage alone in Uruguay.
The immigration system in Uruguay is designed to provide skilled labor, not the typical low-paid worker. Foreign workers can get a work permit through the National Direction of Migration, but the process usually begins once they’ve arrived. Initially, foreigners can stay for 90 days as tourists and then extend it for another ninety days. To work in Uruguay, foreigners must begin the residence procedures. If you are not registered in the country, you risk a large fine from the Ministry of Labor and Social Security.