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LABOUR-EL SALVADOR: Near Universal Poverty Wages

Raúl Gutiérrez

SAN SALVADOR, Jul 29 2008 (IPS) - Eighty-one percent of the economically active population of El Salvador do not earn decent wages, and two out of three young people are under- or unemployed, according to the 2007-2008 Human Development Report on this Central American country.

Salvadorans are hard-working and tenacious, but most have trouble finding decent work that makes it possible for them to meet their basic needs, said the country representative of the United Nations Development Programme (UNDP), Jessica Faieta, presenting the report earlier this month.

“Employment is more than a source of income; it is a fundamental aspect of human dignity,” she told her audience, which included Vice President Ana Vilma de Escobar and representatives of parliament, the justice system, the diplomatic corps and civil society.

Nidia González, 23, who earns the minimum wage of 183 dollars a month as a product promoter in a supermarket, says it is not enough to cover her needs, but that she has had “difficulties finding better-paid work.”

“The big companies could afford to pay well, but they don’t because they are only interested in profits,” she told IPS.

The minimum monthly wage is currently 183 dollars in retail and services, less than 180 dollars in industry, and 85.5 dollars in the rural sector.

Lesbia Orantes, a 44-year-old city government employee in San Salvador, says that even though her salary is “not so bad,” it only covers “80 percent of my basic basket of goods.”

From her 420 dollar monthly paycheck, she has to deduct her social security and pension payments, as well as income tax. By the time she has paid the tuition for her son’s private school, she barely has enough left to scrape by on.

Official figures from 2006 show that unemployment stood at 6.6 percent, although 43 of every 100 working people are under-employed: either active in the informal economy, involuntarily working less than 44 hours a week, or earning less than the minimum wage.

The main problem “is not unemployment,” but “the record high levels of under-employment,” which Salvadorans “have gotten used to living with,” said William Pleitez, the lead author of the 2007-2008 UNDP Human Development Report.

“There is a high level of tolerance for under-employment, and people even point to that as an example of how hard-working and stoic the Salvadoran population is, even though this kind of precarious employment does not even offer a minimum wage, let alone access to social security,” said Pleitez.

The 375-page report states that the unemployed, under-employed and fully employed who earn poverty wages and have no social security coverage do not earn enough to cover the cost of the basic basket of goods and services.

A mere 19 percent of the economically active population have a “decent job,” the report adds.

Pleitez said that even though “it has been determined that there is a direct relation between decent work and human development, full employment” and the steady improvement of productivity and wages, “these have never been assumed as central objectives of the state’s human development strategies.”

But, he added, this “is not only up to the government; it is the business of all of the actors in the world of work; it is the responsibility of workers, employers and the rest of society, and requires a cultural change.”

The president of the Chamber of Commerce and Industry, Jorge Daboud, said that what is needed is “the creation of more companies that offer formal sector jobs that make it possible to have health and pension systems,” although he argued that raising wages could be counterproductive.

“People obviously need solutions to the current economic situation, but the remedy could be more costly than the disease: raising wages would generate more unemployment,” said Daboud.

For years, economic analysts have said that many business owners pay low wages, often below the minimum wage, while others discount social security contributions from their employees’ wages without channelling them to the state coffers.

The Salvadoran economy has experienced ups and downs since the country’s 12-year civil war came to an end in 1992. In the first half of the 1990s, gross domestic product grew at an annual average of 5.4 percent, but the rate fell to three percent between 1996 and 2005. In 2007, GDP growth stood at 3.8 percent.

The report also indicates that 12.4 percent of youngsters between the ages of 15 and 29 are unemployed, while 50 percent are under-employed.

Even though these young people have an average of eight years of formal schooling, “they face almost the same difficulties finding a decent job” as people between the ages of 50 and 84, who have half that level of education.

According to the latest census, from 2007, nearly 35 percent of El Salvador’s population of 5.7 million people is between the ages of five and 19.

David Juárez, a 28-year-old systems engineer, told IPS that he left his last job because “the salary was much lower,” and although he likes his present job, he would like to “earn a bit more.”

“As far back as I can remember, it has been like that, with many professionals earning low salaries,” said Juárez, who earns just two minimum monthly salaries.

“The lack of decent work along with the high levels of violence are undermining the country’s governability and competitiveness,” warned Pleitez.