Magazine article Washington Report on the Hemisphere

Uruguay's Wage War: Supermarket Sector Deadlocked over Minimum Pay

Magazine article Washington Report on the Hemisphere

Uruguay's Wage War: Supermarket Sector Deadlocked over Minimum Pay

Article excerpt

The minimum wage is a naturally divisive issue. In the workplace, it pits business owners who want to keep costs low against employees looking for a raise. Within state houses, the measure is either said to fulfill a universal right to a "living wage" or to distort labor markets, raise prices, and enlarge the informal economy by making unskilled workers harder to employ.

In Uruguay, South America's third smallest nation with the region's third highest GDP per capita, the debate over the minimum wage for supermarket employees has reached a standstill. For the past five weekends, employees have barricaded dozens of storefronts in the departments of Montevideo, Canelones, and Maldonado to demand an increase in the industry's monthly minimum wage from 16,000 Uruguayan pesos (UYU) to 20,000 UYU ($668 USD). The protests come after three months of negotiations between the workers, represented by the Uruguayan Federation of Commercial and Service Employees (FUECYS), and their employers, united within the Uruguayan Supermarkets Association (ASU). Last Friday, December 9, the executive branch stepped in last to propose a compromise. While acceptable to the ASU, the government's deal falls short of the union's standards, leaving supermarkets as the only major sector yet to reach a salary agreement.

Unlike the United States, where there is a single minimum wage across the entire economy, Uruguay establishes minimums by economic sector and by job positions within sectors. In the supermarket industry, there are five different minimum salaries, which range from 15,931 UYU (Sales Assistant) to 21,060 UYU (Department Manager) per month. Moreover, due to persistent inflation (8.45 percent in the past 12-months), private sector minimum wages are renegotiated every two years within each industry's Consejo de Salarios, a 7-member body composed of delegates from labor, management, and the executive branch. These minimums are then adjusted biannually based on the projected inflation at the time of negotiations. For grocery employees, the current wage agreement went into effect in 2015 and the last adjustment occurred on July 25.

Although Uruguayan supermarket employees are guaranteed a minimum well above the national floor (around 12,000 UYU), they earn considerably less than their counterparts across the Rio de la Plata. According to the World Bank's Doing Business Report, the minimum monthly wage for a grocery worker in Montevideo is $580 USD compared to $1,424 USD in Buenos Aires, albeit the Argentine capital does have the highest cost of living in South America. …

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