Paraguay's President Adjusts Minimum Wage Upward by 5%

Paraguayan President Santiago Peña has announced a significant 5% increase to the country's minimum wage, a move that will take effect on July 1. This adjustment will raise the monthly minimum wage to approximately 3,044,000 guaraníes, equivalent to about $500 based on current exchange rates. The increase surpasses the rate of inflation, which the labor code typically uses as a benchmark for wage adjustments.

Peña explained his decision during a management report to his party colleagues, emphasizing that a standard increase of 2.4%, aligned with the interannual inflation recorded in May, would be insufficient for the working class. "I have decided to double that amount, so that the increase is 5%, which I believe is a balanced figure and does not jeopardize macroeconomic stability," the president stated.

The decision comes after the National Council of Minimum Wages (Conasam), a tripartite body, concluded a month of negotiations without reaching a consensus. Employers had advocated for a 2.4% raise, matching inflation, while labor representatives pushed for a 20% increase to compensate for lost purchasing power. The president acknowledged that business sectors might disagree but asserted that public policy must prioritize workers, many of whom struggle to make ends meet.

"No economic progress can be unaccompanied by microeconomic progress for the most vulnerable sectors," Peña underscored. The Ministry of Labor, Employment, and Social Security confirmed the lack of agreement within Conasam. The new minimum wage will be formalized through a decree, which must be signed by July 1.