The increase of the minimum wage in Peru: expectations and challenges on the horizon

The debate surrounding the increase of the minimum wage in Peru has gained relevance in recent months, sparking expectations among the population regarding a possible improvement in salary conditions. President Dina Boluarte recently announced increases for nurses, midwives, and higher education teachers, creating a hopeful atmosphere regarding a potential update to the minimum wage. Minister of Labor and Employment Promotion, Daniel Maurate, has stated that the country's economic recovery could pave the way for discussing an increase in the vital minimum wage. Maurate emphasized the importance of reaching consensus among the involved parties to reach a satisfactory agreement in this matter. Additionally, he expressed his wish for the announcement of the increase to be made within this year. The Congress of the Republic has also proposed a law to modify the Minimum Vital Remuneration in Peru, suggesting a significant increase that would place the minimum wage at S/ 1,545. However, Minister Maurate has stressed that a sudden increase could promote informal labor and highlighted the need for a detailed technical analysis before making decisions in this regard. On the other hand, Minister of Economy and Finance, José Arista, has indicated that the issue of increasing the minimum wage should be addressed based on the evolution of economic indicators, such as the Gross Domestic Product (GDP). Arista believes it is essential to wait for the economy to recover before engaging in discussions about such an increase. Furthermore, the Ombudsman, Josué Gutiérrez, has emphasized the importance of evaluating the salary increase in a context of inflation and loss of purchasing power, where the current salary has become insufficient to cover basic needs. Gutiérrez has underscored the need for the salary increase to contribute to combating unemployment and informal labor in the country. The government has officially approved the increase in remuneration for healthcare professionals, which will come into effect starting this month of December. This increase comes after an indefinite strike staged by sector unions, who demanded an improvement in their salary and working conditions. While it is expected that the increase in the minimum wage in Peru will become a reality during the current year, specific details about the exact amount of the increase have not been specified yet. Uncertainty persists among the population regarding what the minimum wage will be in the country and how it will impact the economy and the quality of life of Peruvian workers. In the last salary adjustment, carried out in May 2022 during the government of Pedro Castillo, the Minimum Vital Remuneration was increased from 930 to 1,025 soles. This update represented progress in terms of salary improvement, but there are still pending challenges in the pursuit of a dignified and adequate salary in line with the needs of the working population in the Andean country.