Employers want the minimum wage to match at least the Central Bank reported 24.8% accumulated inflation level as of August. The employers, however, are proposing a 10% increase effective 1 September, with further increases planned for November and January 2004 of 5% each.
At a time when companies are firing, not hiring, say employers, any greater increase would only result in more shutdowns, and thus would backfire.
Virgilio Ortega Nadal, the spokesman for the industry sector, explained that the planned October 2004 revision of the minimum wage is a long way off, and that it was the employers who convened the special meeting. Ortega also said that employers were concerned about the government not having resolved the problem of duplication of severance payment accumulation and pension plan payments, which increase the cost of each employee. Another consideration affecting the offer for wage increase is the new social security and health programs being implemented, which place an even greater burden on companies.