New Minimum Wage - October 2008

The unions "Frente Nacional de los Trabajadores" (FNT) and the "Central Sandinista de los Trabajadores" (CST) has for the longest time since after the advent of the economic 'crisis' (for lack of a better word) have been negotiating minimum wage increase, with the union groups demanding 20 - 35% while companies are only willing to compromise up to 11.75%, as that is what the businesses can afford to survive the business climate in the country.

More recently, the government has, in compromise, approved 18% in minimum wage increase and about time, I think. See table below for the new minimum wage in Nicaragua (click to enlarge).

A necessary move, for sure, but a very disconcerting development for companies in the Zona Franca that caters to the US market. The only thing people are waiting to see now is how this is going to affect the export companies in the 'red'. Surely a 'damn if you do and damn if you don't situation". Vamos a ver.

For reference: 1 USD = 19.75 Nicaraguan Cordobas

Sources: La Prensa and The Real Nicaragua.