Ecuador: Debates Start to Set the Minimum Wage for 2021

Ecuador's National Council of Labor and Wages (CNTS) Monday began consultative meetings to determine the unified basic wage (UBW) that will rule in 2021 amid the economic downturn caused by the COVID-19 pandemic.

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Several economists and workers union representatives have cast doubts on a minimum wage increase, taking into account that the country is experiencing an economic contraction and high rates of unemployment.

Workers' representatives are calling for an increase in wages by 20 percent or by sector, while employers plan to keep it at US$400.  The Agreement approved by the Ministry of Labour orders that under no circumstances the minimum wage can be less than the current one.

CNTS is made up of representatives of employers, workers, and the Ministry of Labour (ML), and the debates are set to last five days.

In previous years, the consultative meetings were held in December, but Ministerial Agreement MDT-2020-185 provides for wage-fixing until November 20 of each year. Workers and employers have eight days to reach a consensus and if not, the formula for calculating the UBW established by the ML applies.

The formula analyses nine factors, including the consumer price index, labor productivity factor, employment elasticity, overall participation rate, employment in the informal sector.

In 2019, there was no consensus among workers and employers and it was the ML that defined the increase of US$6, pushing the minimum wage to US$400.