Honduras Agrees on New Minimum Wage - 9-12 Percent

UNCLAS TEGUCIGALPA 000813

SIPDIS

STATE FOR DRL/IL, EB/TPP, WHA/PPC, AND WHA/CEN
STATE PASS USTR FOR WCLATANOFF
STATE PASS AID FOR LAC/CAM
DOL FOR ILAB

E.O. 12958: N/A
TAGS: ELAB ECON ETRD PHUM PGOV HO
SUBJECT: Honduras Agrees on New Minimum Wage - 9-12 Percent
Raise for Workers Retroactive to January 1



1. After typically contentious and drawn-out negotiations
between business and labor, the Honduran Special Commission
for the Minimum Wage approved a 12 percent increase in the
minimum wage for 2005 on March 19. The increase is
retroactive to January 1, reverting to typical form after last
year's raise which was not retroactive. The official decree
signed March 28 was published in La Gaceta (akin to the
Federal Registry) on April 1. The Special Commission includes
the Government, the private employers' association (COHEP),
and the three labor confederations.


2. The revised daily minimum wage scale is broken down by
sector and by size of business: small (1-15 workers) and large
(16 or more workers). The scale ranges from 61.26 lempiras
(USD 3.25) per day for workers in small agriculture to 97.77
lempiras (USD 5.19) per day for workers in financial/insurance
companies and workers in export-oriented businesses (including
maquilas and certain commercial agriculture such as tobacco,
coffee, bananas, and seafood). Workers in such areas as
construction, services, mining, transportation, communication,
etc. have minimum wages in between these two rates.


3. The minimum wage scale in 2004 ranged from 54.7 lempiras to
89.7 lempiras per day. This year's raise was approximately 12
percent for workers in small agriculture, and approximately
nine percent workers at the top of the scale. Inflation was
approximately 9.2 percent in 2004 according to the Central
Bank.

Pierce