Debate Over Minimum Wage Increase in Panama

We must have a discussion based on facts and objectivity, we cannot throw out figures that we simply believe benefit some, when in truth they are harming the engine of our economy, the micro, small, and medium-sized enterprise, affirmed Raúl Fernández, director of the Micro, Small, and Medium-sized Enterprise Authority (Ampyme). The request by workers to increase the minimum wage to $900 will be impossible to meet for some sectors, exacerbating the country's unemployment and informality rates. However, he considers that the country needs to improve its equity and competitiveness, addressing the marked difference that exists between urban and rural areas. In this regard, economist René Bracho indicated that establishing a new minimum wage, amidst the country's liquidity contraction, will be a challenge because it is not just about aspirations, but about finding a balance between household needs and corporate treasuries. He assured that the members of the table can present their aspirations, but the final decision must contemplate the reality of the country and its possible risks to the economy. "I am confident that the labor movement and business will find a figure in common agreement," he said. The director of Ampyme aspires for the tripartite table to make a decision based on the country's growth, its inflation levels, and needs. The Minister of Labor and Labor Development, Jackeline Muñoz, also hopes that both actors will agree to make a joint proposal to the Executive Branch. She stated that there is "no human way" for small business owners to carry this increase without adverse consequences that put the economy at risk; therefore, the discussion must focus on real scenarios with benefits for all sectors. She detailed to Panamá América that in the metropolitan area, half of the salaried people earn less than $773.01 monthly, while in some provinces like Darién, the median salary barely reaches $531.10. She mentioned that any "abrupt" movement will significantly impact this group because it represents 70% of the local economic engine, that is, it brings together a large number of employers who would be forced to close their businesses for not being able to meet their labor obligations. She added that labor norms must be adjusted through a special regime more friendly to SMEs, since labor liabilities are one of their means of subsistence.