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Legal minimum wage increase in El Salvador

Issues Fair Compensation

In December of 2016, El Salvador’s Minimum Wage Council approved the largest minimum wage increase in the country’s history, raising the minimum for apparel sector workers by around 29 percent, and raising the minimum for the country’s lowest-paid workers by 102 percent.

In El Salvador, the legal minimum wage differs by industry, with ten separate minimum wages prior to the end of 2016 now consolidated into four categories. Workers in sugar mills, domestic manufacturing, and the service industry earn the highest minimum wage ($300 monthly), while cotton and other agricultural workers earn the lowest ($200.10). The new monthly minimum wage for the apparel exporting sector is $295.20.

While the new legal minimum wage for apparel sector workers represents a significant increase –  from $210.90 to $295.20 – statistics from the Dirección General Estadística y Censos (DIGESTYC) show that the old minimum wage was very low – barely clearing the “extreme poverty” line of $205.89 for a family of 3.73. DIGESTYC determined this figure by calculating the cost of a “canasta básica alimentaria” (basic food basket) of items, including tortillas, rice, beans, milk, meat, eggs, and vegetables, capable of feeding a family a minimum daily adult-equivalent of 2,200 calories and 46 grams of protein.

The FLA published this extreme poverty figure as part of its El Salvador compensation benchmark chart in 2016, along with a “relative poverty” figure of $411.78 derived from the DIGESTYC extreme poverty calculations.  This poverty threshold remains around 40 percent higher than the new minimum wage.

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