Minimum wage in el salvador
Minimum Wages in El Salvador

The minimum wage in El Salvador in 2020. How does it compare?

 

The minimum wage in El Salvador is $304.17 a month for the commerce and service sector; $299.30 for the manufacturing and textile sector; $227.22 for coffee and sugar field workers; and 202.82 for the agriculture and cotton sector.

El Salvador’s minimum wage or legal minimum wage for formal businesses is divided into the four sectors listed above; two for the city sector and two for the countryside or rural areas.

Minimum wage in El Salvador in 2020 by individual sectors.

IndustryMonthlyYearly
Commerce and services$304.17$3,650.04
Textile and manufacturing$299.30$3,591.60
Sugar and coffee field workers$227.22$2,726.64
Agriculture and cotton workers$202.822,433.84

Commerce and services sector wages.

The commerce and services sector employes a large percentage of the Salvadoran population. This sector includes workers in call centers, hotels, secretarial work, and many others. Some of these jobs have extra benefits, such as bonuses; however, they might also have unique requirements such as being bilingual.

Textile and manufacturing sector wages.

The manufacturing and textile sector is another of the top industries in El Salvador. This area includes the production of items such as shirts, pants, shoes, and many others. A large number of what this sector produces is exported to the United States, Canada, and Europe.

Sugar and coffee field workers.

The sugar and coffee sectors in El Salvador are so large that they have their own minimum wage. El Salvador is a top producer of coffee beans and sugar cane, which require a large number of workers.

Agriculture and cotton field workers.

The agriculture and cotton sector employs a large percentage of the Salvadoran population. An issue with the agriculture sector is that most of these businesses work unofficially. Therefore, many people get paid less than the minimum wage assigned to this sector.

Minimum wage in El Salvador

El Salvador wages in the informal sector.

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.

The country has a large number of businesses that operate informally. Therefore, keeping accurate records of information such as how much they pay their employees or how many days or hours they work is challenging to do.

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 businesses 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 to at least cover the cost of living. However, businesses do not want to give part of the profit margin.

Article 144 of the Salvadoran labor laws say the following.

Todo trabajador, incluso el trabajador a domicilio, tiene derecho a devengar un salario mínimo que cubra suficientemente las necesidades normales de su hogar, en el orden material, moral y cultural, el cual se fijará periódicamente.
Source: Report.
Translation: 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.

Undoubtedly, the current minimum wage is not enough to cover the cost of living in El Salvador. The last minimum wage increase was done in 2018 by the Salvador Sanchez Ceren administration.

2018 minimum wage increase.

IndustryFromto$%
Commerce$251$304$5221%
Services$246$304$5523%
Textile and manufacturing$210$299$8823%
Coffee field workers$171$227$5633%
Sugar field workers$109$227$118108%
Cotton workers$98$202$104105%
Agriculture workers$118$202$8472%

How often is the minimum wage in El Salvador reviewed?

According to the country’s Labor Code, El Salvador’s minimum wage is to be evaluated every three years; this is done to verify the possibility of 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.

In any case, the analysis is done in a group that 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 congress.

When is El Salvador’s minimum wage set to be reviewed again?

The minimum wage was reviewed by the group towards the end of 2019; however, no agreement was reached.

The sectors involved may meet in 2020 to discuss the situation and discuss the new increase.

But, as of today, there is no stipulated date on when this meeting might take place or how much the new increase to the minimum wage will be.

One thing is for sure, if approved, the increase would not take effect until the beginning of 2021.

El Salvador’s minimum wage in 2020 update.

Most likely, El Salvador’s minimum wage in 2020 will remain the same; the main reasons are because of the coronavirus in El Salvador problem, and also taking into consideration that a general election is set to take place in February 2021.

It is unlikely that either president Nayib Bukele, or the Legislative Assembly are willing to take the issue of the minimum wage and try to increase it in 2020. The country’s economy has been shut down since early March, and most politicians are thinking ahead to the next elections.

El Salvador's minimum wage in 2020

The minimum wage in El Salvador 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.

To begin with, there is the exchange rate. To make an accurate calculation, I took the minimum wage paid on each countries currencies and exchanged to 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 different 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.

CountryLocal Currency$ Per month$ Per year
GuatemalaQuetzal, 2,825$368$4,427
El SalvadorUS $304$304$3,650
HondurasLempira, 8450$340$4,085
NicaraguaCórdoba, 7,133$211$2,537
Costa RicaCR Pesos, 320,618$558$6,702
PanamaUS $345$345$4,140
If any of these numbers are not accurate, please let me know at, [email protected] and I will make the proper corrections.
El Salvador minimum wage
Photo by: PMenjivarD

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?

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 in 2020 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 in 2020 is way to 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.