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Guatemala Annual Per Capita Income

The World Bank 2010 data for Guatemala indicates that the Gross National Income (GNI) Per Capita for Guatemala is $2,740  and for the Lower Middle class the average annual income is $1,619 in US dollars. http://devdata.worldbank.org/AAG/gtm_aag.pdfThe few earn much more than the many

Guatemala Minimum Wage

Most of the Guatemala's  workers do not receive the minimum wage and  indigenous workers receive even less.   A November 11, 2011 article in the Guatemala Times reports that over 60% of of workers in Guatemala earn less that the minimum wage. From the article it appears the 2010 minimum monthly wage is between $209 and $252 (between $2,508 and $3,024/year)*.   "The study shows that the monthly salary in the private sector is 8 percent below the average minimum wage, 1, 802.99 Quetzales ($ 232.04/ month or $2,784))."  The article also states that "The (monthly) salary of the indigenous people is 1,255.38 Quetzales, ($ 161.56/month or $1938/year), which constitutes about 23 percent less than the national average, the report concluded".  The newspaper article is based on the National Institute of Statistics of Guatemala (INE) 2011 annual national survey on income and expenditures.  Article : http://www.guatemala-times.com/news/guatemala/2661-guatemala-60-percent-of-workers-earn-less-then-minimum-wage.html .  *Based on calculations derived from each of the two statements in the article which provide inconsistent numbers for minimum month wages. (Given the variability in the exchange rate they are probably close. Please let me know if you know better numbers Lynn@terraexperience.com Thanks!)

The 2011  minimum wage was 63.70 quetzales ($8.16) per day for agricultural and nonagricultural work and 59.45 quetzales ($7.61) per day for work in garment factories  .   This compares to based on the United Department of State's  2011 Country Report on Human Rights Practices ( http://www.state.gov/g/drl/rls/ ).   If an employee worked 365 days a year this would translate to $2978/year. The same report  states that "In December (2011)  the (Guatemalan) National Statistics Institute estimated that the minimum food budget for a family of five was 2,440 quetzales ($312) per month (or $3804/year) . The basic basket for vital needs, including food and housing, was 4,452 quetzales ($570 or $6840/year). Labor representatives noted that even where both parents worked, the minimum wage did not enable a family to meet the basic basket of vital needs."

 These reports are prepared annually by the by the Departments of State's Bureau of Democracy, Human Rights, and Labor and usually released in March of the following year. I have regularly looked at this information. Table A summarizes the minimum daily wage from 1999 (the year Terra Experience started business)  to 2011.  Its not always clear to me what assumptions go into determining the wage that the State Department reports. But it is useful to have a consistent source of this information from year to year. Presumably it uses a consistent method to determine dollar exchange rate and other factors.  Guatemala has some requirements for mandatory bonuses that complicate the calculation of what the actual minimum wage is.  For example the 2011 report states "The legal workweek is 48 hours with at least one paid 24-hour rest period.". Some years State Department reports have clearly reported on the minimum wage with and without these bonuses.  Other years, especially more recently, this distinction has not been made.  I presume that the number they report these years is the minimum wage with any required bonuses, but I am not sure.
 

The Fair Wage Guide Calculator


The Fair Wage Guide or calculator (http://www.fairtradecalculator.com/index.php) is a free website that helps artisans and craft buyers calculate costs and determine if an artisan is being paid a fair wage for their labor time.  The calculator uses information about the number of hours that go into a product and the cost of materials to determine an average wage that the artisan earns on a product.   I first learned about it in 2006 and gradually started the concepts of the calculator with my weavers to evaluate doll huipile pricing and design. Its a continuous improvement process. 

The Fair Wage Calculator  assumes a daily wage calculation based on: 40 hours per week 8 hours per day 160 hours per month 5 days per week 20 days per month 240 days per year. Based on Fair Wage Guide information there is quite a variability between natural minimum wages and what is considered a Non-poverty wage in neighboring countries in Central America (Table B). The minimum wage of Guatemala is fairly high compared to other similar countries.

Table B  Fair Wage Wage in Guatemala and some other Central America Countries

Wage Indicator  (2012 Results)

Guatemala
USD (Per Day)

Nicaragua
USD (Per Day)

El Salvador
USD (Per Day)

Honduras
USD (Per Day)

Fair Wage Guide Minimum

10.05

3.86 1.18 14.43

Minimum Wage (National)

9.14

3.51 1.07 13.12

International Poverty Line

2.00

2.00 2.00 2.00

Non-Poverty Wage

7.54

4.67 7.39 4.67

$4 a day poverty line

4.00

4.00 4.00 4.00

Source:  Fair Wage Guide. (http://www.fairtradecalculator.com/index.php) based on calculations made 6/1/2012.


Table A   Guatemala Annual Minimum Daily Wage from 199 to 2011*

US Dept State Report Year 

Without Mandatory Bonus

Without Mandatory Bonus

With Mandatory Bonus

With Mandatory Bonus

       

Agriculture

Non Ag.

Agriculture

Non Ag.

Q

US $ **

Q

US $
**

Q

US $
**

Q

US $
**

2011 ?

 

? ? ? 63.70

$8.16

63.70

59.45*

$8.16

7.61*

2010 ?

 

? ? ? 63.70 $7.96 63.70

59.45*

$7.96

7.43*

2009 ?

 

? ? ? 56 $6.86 56

51.75*

$6.86

$6.34*

2008 ?

 

? ? ? 52  $6.73 52

47.75*

$6.73

$6.18*

2007 44.58 5.94 45.82 6.10 ? ? ? ?

2006

?

?

?

?

52.91

6.95

7.12

52.91

2005

42.46

5.66

43.64

5.82

53.8

7.17

55

 7.33

2004

38.6

4.86

39.7

4.96

45

 5.63

46.3

 5.79

2003

33.

4.25

35.

4.56

43

 5.58

45

 5.87

2002

27.50

3.52

30.

3.85

 ?

 ?

 ?

 ?

2001

25.08

3.24

27.67

 3.57

30.46

 3.93

32.82

  4.32

2000

25.08

 3.24

27.67

  3.57

30.46

 3.93

32.82

  4.32

1999

17.86

2.29

19.71

  2.53

 ?

 ?

 ?

 ?

Source:   United Department of State's  Annual Country Report on Human Rights Practices ( http://www.state.gov/g/drl/rls/ ).

*  In 2008 and after the the wage for Agricultural and Manufacturing workers has been the same with the exception of workers in the garment industry (marked with *)

**  The exchange rate between Quetzals and United States dollar is  that reported by the US Department of State for a specific year.

 

2011 Guatemala - United State Department of State's Country Reports on Human Rights Practices   http://www.state.gov/j/drl/rls/hrrpt/humanrightsreport/


The law sets national minimum wages for agricultural and nonagricultural work and work in garment factories. The minimum wage was 63.70 quetzales ($8.16) per day for agricultural and nonagricultural work and 59.45 quetzales ($7.61) per day for work in garment factories.

 In December the National Statistics Institute estimated that the minimum food budget for a family of five was 2,440 quetzales ($312) per month. The basic basket for vital needs, including food and housing, was 4,452 quetzales ($570). Labor representatives noted that even where both parents worked, the minimum wage did not enable a family to meet the basic basket of vital needs.  The legal workweek is 48 hours with at least one paid 24-hour rest period.
 

2010 Guatemala - United State Department of State's Country Reports on Human Rights Practices

 

2009 Guatemala - United State Department of State's Country Reports on Human Rights Practices

 

2008 Guatemala - United State Department of State's Country Reports on Human Rights Practices  http://www.state.gov/j/drl/rls/hrrpt/2008/wha/119161.htm

 

The law sets national minimum wages for agricultural and nonagricultural work and work in garment factories. The daily minimum wage was 52 quetzales ($6.73) per day for agricultural and nonagricultural work and 47.75 quetzales ($6.18) per day for work in garment factories.

The minimum wage did not provide a decent standard of living for a worker and family. The National Statistics Institute estimated that the minimum food budget for a family of five was 1,976.05 quetzales ($256) per month, 18.85 percent higher than in 2007. Labor representatives noted that even where both parents worked, the minimum wage did not allow the family to meet its basic needs.

 

2007 Guatemala - United State Department of State's Country Reports on Human Rights Practices

 

2006 Guatemala - United State Department of State's Country Reports on Human Rights Practices (http://www.state.gov/g/drl/rls/hrrpt/2006/78893.htm)

The law sets national minimum wages for agricultural and nonagricultural work. The daily minimum wage was $6.95 (52.91 quetzales) per day for agricultural work and $7.12 (54.15 quetzales) for nonagricultural work.

The minimum wage did not provide a decent standard of living for a worker and family. The National Statistics Institute calculated that the minimum food budget for a family of four was $197.40 (1,502.28 quetzales) per month, significantly above the $208 (1,587.40 quetzales) per month that could be earned at the nonagricultural minimum wage rate. The institute's estimate of a family's total needs, including housing, clothing, utilities, and healthcare, was $360.23 (2,741.38 quetzales). Labor representatives noted that even where both parents worked, the minimum wage did not allow the family to meet its basic needs.

2005 Guatemala - United State Department of State's Country Reports on Human Rights Practices  http://www.state.gov/g/drl/rls/hrrpt/2005/61729.htm

The law sets national minimum wages for agricultural and non-agricultural work. In December President Berger ordered a 10 percent increase in the legal minimum wage after the National Salary Committee failed to achieve consensus. The new daily minimum wage was $5.66 (42.46 quetzales) in agriculture and $5.82 (43.64 quetzales) in non-agricultural work. In addition to the increase in base minimum wage, the president also increased the mandatory monthly incentive bonus for salaried employees from $14.66 (110 quetzales) to $33.33 (250 quetzales), effectively raising the minimum wage to $7.17 (53.8 quetzales) per day for agricultural work and $7.33 (55 quetzales) for non-agricultural work.

The minimum wage did not provide a decent standard of living for a worker and family. The Guatemalan National Statistics Institute calculated that the minimum food budget for a family of 4 was $202 (1,515 quetzales) per month, significantly above the $161 (1,210 quetzales) per month that could be earned at the non-agricultural minimum wage rate. The institute's estimate of a family's total needs, including housing, clothing, utilities, and health care was $369 (2,765 quetzales). Labor  representatives noted that even where both parents worked, the minimum wage did not allow the family to meet its basic needs.

2004 Guatemala - United State Department of State's Country Reports on Human Rights Practices   http://www.state.gov/g/drl/rls/hrrpt/2004/41762.htm

The law sets minimum wages. Noncompliance with minimum wage provisions in the rural and informal sectors was widespread. A 2001 government survey, the most recent available, noted that only 60 percent of the working population received the minimum wage or more. Advocacy groups, focused on rural sector issues, estimated that more than half of workers engaged in day-long employment in the rural sector did not receive the wages, benefits, and social security allocations required by law.

The Ministry of Labor oversees a tripartite committee that makes recommendations for increases in the minimum wage. In the event that agreement is not reached in the tripartite commission, the Government may decree such increases based on recommendations of the Labor Minister. The daily minimum wage was $4.86 (38.6 quetzals) in agriculture and $4.96 (39.7 quetzals) in commerce. The law requires an incentive bonus be added to this minimum wage for all hours worked, effectively raising the daily minimum wage to $5.63 (45 quetzals) in agriculture and $5.79 (46.3 quetzals) in commerce.

On June 30, a new minimum wage came into force that provided increases of 21 percent for agricultural workers and 16 percent for non-agricultural workers.  The minimum wage did not provide a decent standard of living for a worker and family. In its 2003 Human Development Report, the UNDP estimated that 57 percent of the population lived below the poverty line and 21.5 percent in extreme poverty. The Ministry of Labor conducts inspections to monitor compliance with minimum wage provisions; however, the Ministry of Labor lacked the resources to enforce the minimum wage law adequately.

2003 Guatemala - United State Department of State's Country Reports on Human Rights Practices    http://www.state.gov/g/drl/rls/hrrpt/2003/27900.htm

Although the law sets minimum wages, noncompliance with minimum wage provisions in the rural and informal sectors was widespread. A 2001 government survey, the most recent available, noted that only 60 percent of the working population received the minimum wage or more. Advocacy groups, focused on rural sector issues, estimated that more than half of workers engaged in day-long employment in the rural sector do not receive the wages, benefits, and social security allocations required by law. Minimum wage and working hour protection laws do not extend to domestic workers; however, in May, the President submitted a bill to Congress that would do so. It remained pending at year's end.

The Ministry of Labor oversees a tripartite committee that makes recommendations for increases in the minimum wage. In the event that agreement is not reached in the tripartite commission, the Government may decree such increases based on recommendations of the Labor Minister. The daily minimum wage was $4.25 (33 quetzals) in agriculture and $4.56 (35 quetzals) in commerce. The law requires an incentive bonus be added to this minimum wage for all hours worked, effectively raising the daily minimum wage to $5.58 (43 quetzals) in agriculture and $5.87 (45 quetzals) in commerce. In November, the President authorized a new minimum wage (effective January 1, 2004) that provided increases of 21 percent for agricultural workers and 16 percent for non-agricultural workers. For day shift workers, the standard 6-day workweek is 44 hours; for night shift workers, it is 36 hours; for swing shift workers, it is 42 hours. Time-and-a-half pay is required for overtime work.

The minimum wage was not sufficient to provide a decent standard of living for a worker and family. In its Human Development Report issued in September, the UNDP estimated that 57 percent of the population live below the poverty line and 21.5 percent in extreme poverty. The Ministry of Labor conducts inspections to monitor compliance with minimum wage provisions; however, the Ministry of Labor lacked the resources to enforce the minimum wage law adequately.

An estimated 75 percent of workers were in the informal sector and were therefore completely without labor protections. Only 24.6 percent of workers were covered by the National Social Security System in 2001, according to the Labor Ministry.

2002  Guatemala - United State Department of State's Country Reports on Human Rights Practices  http://www.state.gov/g/drl/rls/hrrpt/2002/18333.htm

Although the law sets minimum wages, noncompliance with minimum wage provisions in the rural and informal sectors is widespread. A May 2001 government survey of employment and income revealed that only 60 percent of the working population received the minimum wage or more. As minimum wage provisions have become more complex through inclusion of a monthly "incentive bonus", and as the minimum wage has risen during the year and with a deepening economic crisis affecting the coffee-growing sector, noncompliance with the law, which was already high, has risen. Advocacy groups that focus on rural sector issues estimate that more than half of workers engaged in day-long employment in the rural sector do not receive the wages, benefits, and social security allocations required by law. Minimum wage laws do not extend to domestic workers.

The Ministry of Labor oversees a tripartite committee that makes recommendations for increases in the minimum wage. In the event that agreement is not reached in the tripartite commission, the Government may decree such increases based on recommendations of the Labor Minister. The 2000 Labor Code reforms placed responsibility for drafting the decrees setting new minimum wage levels, should there be no consensual proposal submitted by the tripartite commission, on the Labor Ministry. On January 1, a minimum wage increase, promulgated by executive branch decree after the tripartite commission was unable to reach a consensus, took effect. This decree raised the minimum daily wage for agricultural work by $0.31 (2.42 quetzals) to $3.52 (27.50 quetzals). It raised the minimum daily wage for service, industrial, and government sector work by $0.29 (2.33 quetzals) to $3.85 (30.00 quetzals). In August 2001, the Government decreed a mandatory monthly bonus for all workers of $31.25 (250 quetzals) from a previous level of $20.20 (162 quetzals) for agricultural workers and $19.30 (154 quetzals) for nonagricultural workers.

The minimum wage was not sufficient to provide a decent standard of living for a worker and family. According to the UNDP, at least 80 percent of the population, including approximately 60 percent of working population, lives below the poverty line. The Ministry of Labor conducts inspections to monitor compliance with minimum wage provisions; however, the Ministry of Labor lacks the resources to enforce adequately the minimum wage law.

An estimated 70 percent of workers are in the informal sector, and are therefore completely without labor protections. Only 21 percent of workers were covered by the National Social Security System (IGSS) in 2000, according to the Labor Ministry.

2001 Guatemala - United State Department of State's Country Reports on Human Rights Practices http://www.state.gov/g/drl/rls/hrrpt/2001/wha/8344.htm

 The law sets minimum wages; however, noncompliance with minimum wage provisions in the rural and informal sectors is widespread. As minimum wage provisions have become more complex through inclusion of a monthly "incentive bonus" and as the minimum wage has risen during the year and with a deepening economic crisis affecting the coffee growing sector, noncompliance with the law, which was already high, also has risen. Advocacy groups that focus on rural sector issues estimate that more than half of workers engaged in day long employment in the rural sector do not receive the wages, benefits, and social security allocations required by law. Minimum wage laws do not extend to domestic workers.

The Ministry of Labor oversees a tripartite committee, made up of formal sector representatives of labor and management, that makes recommendations for increases in the minimum wage. In the event that agreement is not reached in the tripartite commission, the Government may decree such increases. The Labor Code reforms adopted in May placed responsibility for drafting the decrees setting new minimum wage levels, should there be no consensual proposal submitted by the tripartite commission, on the Labor Ministry.

On December 16, 2000, a minimum wage increase, promulgated by Executive Branch decree after the tripartite commission was unable to reach a consensus, took effect. This decree raised the minimum daily wage for agricultural work by $0.45 (3.46 quetzals) to $3.24 (25.08 quetzals). It raised the minimum daily wage for service, industrial, and government sector work by $0.49 (3.82 quetzals) to $3.57 (27.67 quetzals). In March 2000, the Congress mandated by decree an incentive bonus that augments the minimum wage by paying for each hour worked--$0.09 (0.6725 quetzals) per hour for agricultural workers and $0.08 (0.64375 quetzals) per hour for industrial and other workers. The legal minimum wage for a regular 8-hour day then became $3.93 (30.46 quetzals) for agricultural work and $4.32 (32.82 quetzals) for service, industrial, and government sector work. On August 6, the Government decreed an increase in the mandatory monthly bonus for all workers to $31.25 (250 quetzals) from a previous level of $20.20 (162 quetzals) for agricultural workers and $19.30 (154 quetzals) for non-agricultural workers.

The minimum wage was not sufficient to provide a decent standard of living for a worker and family. According to the UNDP, at least 80 percent of the population, including approximately 60 percent of the employed, lives below the poverty line. The Ministry of Labor conducts inspections to monitor compliance with minimum wage provisions; however, the Ministry of Labor lacks the resources to enforce adequately the minimum wage law.

2000   Guatemala - United State Department of State's Country Reports on Human Rights Practices http://www.state.gov/g/drl/rls/hrrpt/2000/wha/775.htm

The law sets minimum wages; however, noncompliance with minimum wage provision in the rural and informal sectors is widespread. The Ministry of Labor oversees a tripartite committee, which includes formal sector representatives of labor and management, and makes recommendations for increases in the minimum wage. In the event that agreement is not possible, the Government may decree such increases. The Executive Branch promulgated the most recent minimum wage increase by decree, after the tripartite commission was unable to reach a consensus, and it took effect on December 16. This decree raised the minimum daily wage for agricultural work by $0.45 (3.46 quetzals) to $3.24 (25.08 quetzals). It raised the minimum daily wage for service, industrial, and government sector work by $0.49 (quetzals 3.82) to $3.57 (27.67 quetzals). In March the National Legislature mandated by decree an incentive bonus that augments the minimum wage. This decree increased the minimum wage by ordering that an incentive bonus be paid for each hour worked--$0.09 (0.6725 quetzals) per hour for agricultural workers and $0.08 (0.64375 quetzals) per hour for industrial and other workers. This raises the legal minimum wage for a regular 8-hour day to $3.93 (30.46 quetzals) for agricultural work and $4.32 (32.82 quetzals) for service, industrial, and government sector work. The minimum wage was not sufficient to provide a decent standard of living for a worker and family. According to the UNDP, at least 80 percent of the population live below the poverty line, including approximately 60 percent of those employed. In November MINUGUA reported that a minimum wage adequate for feeding a family of six would have to be nearly 80 percent higher than the current minimum wage. MINUGUA also reported that a minimum wage also adequate for clothing, sheltering, and educating a family of six would have to be nearly 225 percent higher than the current minimum wage.

1999 Guatemala - United State Department of State's Country Reports on Human Rights Practices  http://www.state.gov/g/drl/rls/hrrpt/1999/388.htm

Although the law sets minimum wages, the legally mandated minimum wage for most unskilled and semiskilled workers is not always paid. A tripartite committee representing labor and management in specific economic sectors and overseen by the Ministry of Labor, is named each year to make recommendations for increases in the minimum wage. In the event that agreement is not possible, the Government may decree such increases. President Arzu implemented the most recent minimum wage increase by decree, after the commission was unable to reach a consensus, and it took effect on February 1. The basic rate is $2.53 (19.71 quetzals) for industrial workers for an 8-hour workday, including a required hourly bonus, and is $2.29 (17.86 quetzals) per day plus mandatory productivity bonuses for agricultural workers. The minimum wage is not sufficient to provide a decent standard of living for a worker and family. According to the United Nations Development Program, at least 80 percent of the population lives below the poverty line, including approximately 60 percent of those employed.

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