Industrials warn: wage hike risks crisis | Industriales alertan: alza salarial agravaría crisis

By Ernesto Estremadoiro, El Deber:

Industrials reject wage increase proposal and warn of more inflation, unemployment, and smuggling

The COB proposed a 20% wage increase / Photo: Social media

The National Chamber of Industries (CNI) maintains that the 20% wage increase proposal put forward by the Bolivian Workers’ Center would worsen the economic crisis and affect private investment. The sector proposes prioritizing growth and economic reactivation measures.

The National Chamber of Industries (CNI) rejected the 20% wage increase proposal put forward by the Bolivian Workers’ Center (COB) and warned that such a measure could deepen the economic crisis, raise inflation, and affect formal employment in the country.

During a press conference, CNI advisor Hugo Siles explained that the industrial sector considers the current economic context unsuitable for implementing a wage increase of that magnitude, as the Bolivian economy is going through a period of low growth and structural difficulties.

According to the analysis presented by the entity, economic growth estimates for Bolivia range between 0% and 1.5%, so a wage increase could further pressure productive activity and affect Gross Domestic Product performance.

Siles argued that such a measure would also have effects on other economic indicators. Among them, he mentioned a possible increase in inflation, higher levels of smuggling, a drop in private investment, and an increase in unemployment in both the formal and informal sectors.

“The wage increase will deepen the economic crisis, will promote inflation, and will generate higher levels of unemployment,” he stated.

The representative of the industrial sector also pointed out that the country has already recorded an increase in the national minimum wage for the 2026 fiscal year, which rose from Bs 2,750 to Bs 3,300, retroactive to January 1.

According to data presented by the CNI, between 2005 and 2026 the national minimum wage increased by around 650%, which—according to the sector—shows a recovery in workers’ purchasing power in recent years.

Another argument put forward by the entity is the real impact that the wage increase would have on companies’ labor costs. Siles explained that an increase in base salary generates additional labor burdens—such as social security contributions, bonuses, severance pay, and other benefits—that raise the total cost for employers.

In that sense, he indicated that a 20% wage increase could effectively represent an increase of close to 30% in labor costs.

The CNI also noted that the impact of the wage increase would reach only a portion of the economically active population. According to its estimates, the increase would benefit approximately 15% of workers, while the remaining 85% belongs to the informal sector where these provisions do not apply.

The industrial sector also warned that the increase could affect the country’s competitiveness. According to its calculations, Bolivia would come to have the third-highest minimum wage in South America, despite having one of the lowest productivity levels in the region.

They also warned that higher labor costs could encourage smuggling and illegal imports, generating unfair competition for national production.

Given this scenario, the sector proposed that instead of prioritizing a wage increase, the country should focus on policies aimed at economic growth and productive reactivation.

Among the proposed measures, they mentioned guaranteed access to fuel and foreign currency, incentives for industrial investment, tax and labor reforms, simplification of bureaucracy for productive projects, and policies aimed at strengthening innovation and the energy transition.

“The country needs economic growth and productive reactivation measures rather than an inflationary wage increase,” Siles concluded.

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