What is the minimum wage?

What Does Minimum salary Mean

We explain what the minimum wage is and the mechanisms to calculate it. Also, a list of minimum wages from various countries.

The idea of the minimum wage was the product of a long history of union struggle.

What is the minimum wage?

It is known as the minimum wage, minimum wage or minimum wage to the minimum amount of money that a worker must collect monthly , according to what is established in the laws in force in his country, calculated based on a relationship between the amount of money and the number of hours worked. .


In theory, a minimum wage also corresponds to the minimum amount of money that a formal worker must receive monthly to cover his most basic common expenses , and provide his family with the minimum physical, social and cultural conditions essential for a dignified life.

The latter, however, may not be fulfilled in periods of crisis , since the minimum wage is susceptible to inflation , devaluation and the loss of purchasing power of the local currency. To compensate for this trend, a salary update is usually given at least once a year , taking the minimum salary as the base reference amount for the increase.

The minimum wage idea was the product of a long history of union and working class struggle , and was first applied in Australia and New Zealand in the late 19th century, when the state passed the Employers and Employees Act. and Employers) in 1890.

Since then, the defense of the minimum wage and its periodic updating is part of the most common purposes of the workers' struggle, since it should allow them access to decent housing , a monthly basket of basic food products, access to urban transport and school supplies. for your children.

This measure, together with the reduction of the working day to a maximum of 8 hours and a maximum of 40 a week, are part of the benefits for the improvement of the standard of living of the world's working class.

It can help you: Labor law

How is the minimum wage set?

The State can set a minimum wage rate for the entire country.

The minimum wage is the result of calculations made by the State contemplating various factors and variables , often in agreement with the unions of workers and other forms of tuition or professional organization.

In some countries there are agencies in charge of this, as is the case of Mexico, whose Labor Law establishes the existence of the National Minimum Wage Commission (Conasami); or that of Argentina, with its National Council for Employment, Productivity and the Minimum Vital and Mobile Wage (CNEPSMVM). This always depends on the legislation of each country. There are even countries that do not yet contemplate the figure of the minimum wage at all, although they are the least.

Similarly, there are four usual mechanisms, according to the International Labor Organization (ILO) through which a minimum wage can be set:

  • Universal State. A rate set by the State for the minimum wages of the entire country, without distinction of productive area, as long as it is formal employment.
  • Multiple state. Various rates stipulated by the State depending on the labor sector in question.
  • Collective universal. A universal rate for the entire country, but determined by collective bargaining of the labor sectors.
  • Collective multiple. Different rates depending on the labor sector, but determined by collective bargaining.

According to the ILO, two methods can be used to determine the amount of the minimum wage:

  • Assess the cost of living. It is calculated taking into account the cost of basic goods and services for living that a worker should be able to cover at home, always stipulating a “typical” family (average), and generally based on the cost of living in the city. capital of the country.
  • Take salary statistics. Collect information regarding the lowest salary within a stipulated range of remunerations, to find a minimum with respect to the average. This method seems simple, but it does not take into account that the labor sectors may have different social protection mechanisms.

Current minimum wages in Spanish-speaking countries

The following is a list of minimum wages in Latin America, calculated in US dollars (and local currency) for the beginning of 2018:

  • Colombia. 218 USD (857,308.93 COP)
  • Panama. 744 USD (744 PAB)
  • Costa Rica. 512 USD (288,386.69 CRC)
  • Argentina. 515.9 USD (9,500.00 ARS)
  • Cuba. 23 USD (23 CUC)
  • Chili. 456 USD (275,965.62 CLP)
  • Mexico. 139 USD (2,671.77 MXN)
  • Uruguay. 431 USD (12,344.99 UYU)
  • Ecuador. 391 USD (391 USD)
  • Brazil. 325 USD (1,049 BRL)
  • Dominican Republic. 288 USD (12,873 DOP)
  • Peru. 255 USD (850 PEN)
  • Venezuela. $ 1.72 black value / $ 32.83 official value (248,000 BSF)
  • The Savior. 251 USD (251 USD)
  • Bolivia. 262 USD (1,805 BOB)
  • Nicaragua. 115 USD (7,133 NIO)
  • Honduras. 341 USD (7,760 HNL)
  • Paraguay. 340 USD (1.883.335.82 PYG)
  • Guatemala. 380 USD (2,893 GTQ)
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