El Salvador’s minimum wage is $365.00 a month for the commerce, industrial, and service sector; $359.16 for the Maquila, manufacturing, and textile sector; $272.66 for the Coffee mill and Sugar cane harvesting coffee workers; and $243.46 for the agriculture, and coffee or cotton harvesting sector.
According to Salvadoran authorities, El Salvador’s minimum wage increase of twenty percent “20%”, which became effective on August 1, 2021, will benefit all sectors.
With this increase, the minimum wage in El Salvador for commerce, industrial, and service workers will be $1.50 an hour, $12.00 per day, $365.00 per month.
El Salvador’s minimum wage or legal minimum wage for formal businesses is divided into four sectors; two for the city and two for the countryside or rural areas.
| Industry | Hourly | Monthly | Yearly |
|---|---|---|---|
| Commerce, industrial, and services | $1.50 | $365.00 | $4,380.00 |
| Maquila, manufacturing, and textile | $1.48 | $359.16 | $4,309.92 |
| Coffee mill and Sugar cane harvesting | $1.12 | $272.66 | $3,271.92 |
| Agriculture, and coffee or cotton harvesting | $1.00 | $243.46 | $2,921.52 |
Commerce and Services Sector Wages
The commerce and services sector employs many Salvadorans; it includes call centers, hotels, secretarial work, bank tellers, and many other types of professional work.
Some of these jobs have extra benefits, such as bonuses and overtime. However, they might also have unique requirements, such as being bilingual and having a college degree.
Maquila, Manufacturing, and Textile Sector Wages
The maquila, manufacturing, and textile sector is one of the top job-producing industries in El Salvador. This area includes the production of items such as shirts, pants, shoes, and many others.
The majority of items produced by this sector are exported to the United States, Canada, and Europe.
Coffee Mill and Sugar Cane Harvesting Sector Wages
The sugar and coffee sector in El Salvador is so large that they have their own minimum wage. El Salvador is a top producer of coffee beans and sugar cane, which require many workers.
Agriculture and Coffee or Cotton Harvesting Sector Wages
The agriculture and coffee or cotton harvesting sector employ a large percentage of the Salvadoran population.
An issue with companies in this sector, especially agriculture, is that most do business informally. Therefore, many workers in these areas get paid less than the minimum wage assigned to this sector.
El Salvador Wages in the Informal Sector
El Salvador’s informal sector does not have a minimum wage. Therefore, workers in this area get paid whatever the employers feel is correct for the work being done. It could be more or less than the appointed minimum wage for the industry.
El Salvador has laws protecting workers, so they get paid at least the minimum wage. However, an issue arises when it comes to enforcing these laws in the informal sector.
Because of the large number of businesses that operate informally, it is difficult to keep accurate information records such as how much money workers get paid or the hours they work.
Most of the businesses that operate informally are in the agricultural sector. Also, small businesses that sell goods and services in smaller towns are known for conducting business informally. One thing is for sure, El Salvador’s minimum wage is even lower in the informal sector.
Increasing the Minimum Wage in El Salvador
Increasing the minimum wage in the country is not an easy thing to do. Obviously, workers want an increase that covers at least the essential cost of living in El Salvador. However, businesses oppose a significant increment as it would reduce their profit margin.
Article 144 of the Salvadoran labor laws says the following; “Every worker, including the home workers, has the right to earn a minimum wage that sufficiently covers the common needs of their home, in the material, moral and cultural order, which will be set periodically.” El Salvador Labor Code.
The current minimum wage is not enough to cover the essential cost of living in El Salvador. The last minimum wage increase was done in 2021 by the Nayib Bukele administration.
2021 Minimum Wage Increase
On July 1, 2021, president Nayib Bukele announced that he would request a 20% minimum wage increase for all sectors.
“I have sent a request to the Minimum Wage Council to increase the minimum wage for Salvadorans. Although this increase depends on the approval by the government, business and workers sectors, I have requested that it be increased by 20%,” President Bukele.
The following day, the minimum wage council met, and with the votes of the government and workers sector, the increase was approved.
The council members representing the private sector did not support the wage increase. The new minimum wages went into effect on August 1, 2021.
| Industry | From | to | $ | % |
|---|---|---|---|---|
| Commerce | $251 | $304 | $52 | 21% |
| Services | $246 | $304 | $55 | 23% |
| Textile and manufacturing | $210 | $299 | $88 | 23% |
| Coffee field workers | $171 | $227 | $56 | 33% |
| Sugar field workers | $109 | $227 | $118 | 108% |
| Cotton workers | $98 | $202 | $104 | 105% |
| Agriculture workers | $118 | $202 | $84 | 72% |
El Salvador Minimum Wage Compared to Other Countries in Central America
The following is the minimum wage in all the Central American countries. Keep in mind that some of these numbers might not be accurate to the penny for the following reasons.
There is the exchange rate. To make an accurate calculation, I took the minimum wage paid on each countries currencies and exchanged it for US dollars. I am using today’s exchange rate to set an amount; but, exchange rates fluctuate daily.
Furthermore, most countries have different minimum wages for other sectors, just like El Salvador. For the purposes of comparison, I am using the highest minimum wage a person could get paid in each nation.
| Country | Local Currency | $ Per month | $ Per year |
|---|---|---|---|
| Guatemala | Quetzal, 2,825 | $368 | $4,427 |
| El Salvador | US $304 | $304 | $3,650 |
| Honduras | Lempira, 8450 | $340 | $4,085 |
| Nicaragua | Córdoba, 7,133 | $211 | $2,537 |
| Costa Rica | CR Pesos, 320,618 | $558 | $6,702 |
| Panama | US $345 | $345 | $4,140 |
How Often is the Minimum Wage in El Salvador Reviewed?
According to the country’s Labor Code, El Salvador’s minimum wage must be evaluated every three years. This is done to verify whether it is feasible to make any increase.
The analysis looks at the overall economic aspect of the country, the economy, inflation, cost of essential items, and business environment.
The analysis is done by the minimum wage council; it includes 2 representatives from the labor sector, 2 from the employer sector, and 3 from the government. After the review, they decide if an increase is necessary and recommend it to the Salvadoran congress.
How Many Days per Week do You Work in El Salvador?
The standard workweek for most Salvadorans is 5 1/2 days. It usually begins on Monday and ends on Saturday at noon. In the informal sector, it is normal for employees to work six days per week or even seven.
How Many Hours per Day do You Work in El Salvador?
Each employer has its own schedule and set of hours that the employee is supposed to work. Also, they have to pay overtime if it goes over the established amount of hours.
Coming up with a specific number of hours in the informal sector is complicated. Most of these employers expect workers to stay until the job is done.
El Salvador’s Minimum Wage is Not Enough for Salvadorans
A big reason why El Salvador has a poverty problem and that a lot of its citizens look for opportunities elsewhere is the minimum wage issue.
The minimum wage in El Salvador is too low, it does not allow employees to live a regular life or to increase the standards of living of their families. Besides, it does not come close too cover the cost of living in El Salvador.
The hope is that in 2021, the politicians and the government take a look at the minimum wage in El Salvador and do something about increasing it.
