| GOOD FOR MINIMUM WAGE INCREASE Again in Peru debate minimum wage issue. So far, we have not heard anyone it deems to be sufficient to live to 500 soles, pose no real increase. Undoubtedly, none of the critics of raising the minimum wage has never lived with this monthly amount. The central debate, however, focuses on the potential effects of raising the minimum wage on employment. Critics of minimum wage increase have said that could lead to a loss of jobs because companies would presumably less inclined to hire workers if they have to pay more. Recent studies show that this effect does not exist or is relevant. But we must not lose sight of the macroeconomic impact. Because while wages are a cost to the company paying the other hand are also the income that families go to the market to buy food, clothing and more. So that the minimum wage increase would make companies face increasing demand, allowing them to increase production and, because it will require more workers. This increased demand, in turn, allows small and medium enterprises, move towards larger-scale technologies and increase productivity. Unfortunately, the minimum wage only affects formal enterprises, and even within them a small portion of workers, because most earn more than the minimum. For example, the minimum wage increase would affect 500 soles 360 000 workers nationwide, less than 4% of the total. Therefore, the minimum wage increase should be part of an employment policy aimed at increasing wages in general, which should go along with ensuring basic rights of association and collective bargaining for workers. We must keep wages at the very low level found from the shock Fujimori. Obviously, economic growth depends not only on demand workers, and it is necessary to preserve the macroeconomic equilibrium, since otherwise we can fall in external deficits or high inflation that does not do anyone any good. But in the current conditions of the Peruvian economy, with a large surplus in the external accounts, a modest increase in domestic demand would accelerate economic growth without risk. There are, of course, also a social effect. Who earns the minimum wage is among the poor of Peru. Enter by raising at least one element of social justice in a fragmented country with high social conflict, where the differences between the incomes of business owners and their workers are abysmal, it is also important. The discussion of the minimum wage must take into account all possible effects that would increase. And it must also consider how Peruvian society is finding its balance - economic and social - and its course towards the future. This more comprehensive analysis indicates that a significant increase in the minimum wage would be good for the country. Agree or not, hopefully the candidates will be manifest on this issue and submit their proposals on how to improve earnings in the next 5 years. |
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Pedro Francke
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