Minimum wage will increase $6 in 2020

The Ministry of Labor announced Friday afternoon that Ecuador’s minimum wage will increase by $6 January 1, 2020. The new rate will be $400 a month. The ministry says that a larger increase is unwarranted given the annual inflation rate of less than one percent.

Labor unions objected to the $6 minimum wage increase.

The new rate was announced after talks between employer representatives and labor unions failed to reach an agreement earlier in the day. Labor negotiators had asked for a $15 increase over the protests of some labor unions which demanded much more.

Ecuador’s minimum wage is the basis for calculating elegiblity for a broad range of government programs, including health care, housing credits and tax exemptions and is used to determine legal fines for a broad range of offenses such as driving infractions, robbery and illegal enrichment. It is also the amount that foreigners applying for temporary and permanent residency must prove they receive.

The Unitary Workers Front (FUT) was one of the labor unions objecting to the $6 monthly hike. Originally demanding a 25 percent increase, the FUT said it will meet with members to determine if it will call a national strike in protest.