Freeze salaries to save the economy | Congelar aumento de salarios para salvar la economía

By Erbol:

ADVISE CONSEQUENCES

Industrialists suggest freezing the salary increase to avoid deepening the economic crisis

A person counts money. Photo: archive

Through a statement, the National Chamber of Industries (CNI) proposed this Friday to freeze the basic wage and the National Minimum Wage (SMN) to prevent the economic crisis facing the country from “deepening.”

With this measure, the CNI believes that it will also stop the “inflationary spiral” in Bolivia, which further drives the decline in investment, production, exports, and formal employment.

If the salary increase is approved, as demanded by the Bolivian Workers’ Central (COB) in its request to the Government, it will “further” increase future inflation and deteriorate economic growth.

Regarding the National Minimum Wage, the CNI noted that it has been one of the highest in South America for years, promoting “loss of competitiveness, greater informality, and smuggling.”

“Private companies are struggling due to the rising costs of the U.S. dollar and the shortage of diesel and gasoline. Furthermore, the salary increase will lead to a larger fiscal deficit and will become a factor of macroeconomic instability,” the statement adds.

The scenario that makes the salary increase unfeasible is the decline in economic activity, according to the CNI. Furthermore, the growth of the Gross Domestic Product (GDP) in 2024 is 2.14% as of September, one of the lowest in recent years.

“In 2024, social conflicts (blockades) caused losses and increased legal insecurity and country risk. Over 1,200 social conflicts occurred in 2024, with losses exceeding $3.5 billion, which affected companies’ revenue flow,” it recalled.

On the other hand, it pointed out that the creation of companies is slowing down due to the economic crisis. In 2024, the business base grew by 2.8%, the lowest in the last 4 years. “At the current rate, no new companies will be created by 2026,” it added.

Last year, a 5.85% increase in the National Minimum Wage and a 3% increase in the basic wage were agreed upon. ///agc

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