Inflation spikes just as salary talks are ready to begin

Inflation spiked to nearly 1 percent for the month of May, according to INS Valores Puesto de Bolsa, S.A., which made the summary using data from the Instituto Nacional de Estadística y Censos.

The amount, .99 percent, was about twice what had been expected. This was the highest jump since May 2008, said INS Valores Puesto de Bolsa. Much of the increase was attributed to the increase in the cost of transportation, including fuel.

The spike in inflation comes at a time when the Consejo de Salarios is about to open negotiations for increases in the minimum wages for the second half of the year. The Consejo, an agency within the
Ministerio de Trabajo, establishes minimum wages for a long list of job titles. In the first half of the year, a 3.17 percent increase was decreed.

The negotiations include input from unions and from the private sector. Sometimes the sessions are heated.

If salaries are not set by July 1, employers will have to compensate workers when the numbers are established. Talks are expected to begin next week.

Salary increases themselves will have an effect on inflation for the rest of the year. Every 1,000 colons more in salary also means about 300 colons more in payments to the Caja Costarricense de Seguro Social and increased insurance premiums.

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