Minimum Wage Rises Steeply
Repercussions of the Increase Uncertain

January 1st, 2009
by Thomas Tomczyk

[private] On the first of January, the minimum wage for urban workers in Honduras was raised to Lps. 5,500. This is a dramatic, 60.4% increase, from the previous minimum salary of Lps. 3,428.40. This increase has been passed by President Mel Zelaya in an executive order and will have dramatic effect on businesses as well as workforce throught the country.

The benefits of Honduran workers are based on their current salary and many businesses are expected to fire, then rehire their workers, to avoid the added burden of paying benefits of 13 and 14 salary based on the increased minimum salary.

In 2008 around 600,000 Hondurans were estimated to be earning a minimum wage of less then $6 a day before benefits. Last year around 35,000 workers are believed to have lost their jobs. National Association of Industrial Workers (ANDI) expects that up to 300,000 Honduran workers might lose their jobs in 2009.

The effect on the Bay Islands will be substantial. Construction section workers, security guards, as well as hourly packing plant workers will be most effected. Workers who were earning close to Lps. 5,500 before, now might also be demanding a proportional salary increase. [/private]

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