Trade unions will be collecting signatures to allow voters to approve a new minimum wage of about $900 a month for unskilled workers. That is more than double the current legal minimum wage.
The Tribunal Supremo de Elecciones approved the request, which is the initial step toward a referendum.
The request was filed in October by Didier Leitón, a union leader in the banana industry. He sought the approval of bill No. 19.312 through popular vote. Frente Amplio lawmaker José María Villalta introduced that bill, which remains pending in the Asamblea Legislativa.
The initiative would force the Consejo Nacional de Salarios to approve wages that guarantee workers enough income for housing, bills, food, education and recreational activities for a family, according to a union description.
The new minimum wage would only apply to unskilled workers in the private sector and would go into effect over five years, so that companies will have time to adjust to the new rules, according to the proposal.
The election tribunal said that the referendum would be legal since it does not modify the Constitution or address any subject that is in the exclusive domain of legislators.
Union members and supporters must collect at least 160,000 signatures, which represents 5 percent of the latest electoral roll, once the resolution is published in the official daily La Gaceta.
The signatures must be collected in the following 10 months. If the objective is reached, the election tribunal has the obligation to organize the countrywide vote no later than six months before the next presidential elections, according to the electoral code.
“We’ve met with experts from TSE and members of the main unions in the country. We are designing the ballots and waiting for the resolution to be published in La Gaceta to fully start the campaign.” said Albino Vargas, president of the Asociación Nacional de Empleados Públicos y Privados, one of the biggest workers unions in the country.
The referendum would be the second in the history of Costa Rica. The first one took place in 2007 to determine whether Costa Rica would join the Central American Free Trade Agreement with U.S and Dominican Republic. Voters approved the agreement then.
In Costa Rica, minimum salaries for private industry are updated every six months and they vary according to the job category and education level of workers. The daily income for a trabajador no calificado is a bit less than 10,000 colons a day and a bit more than $18, based on the current rate of exchange. The Spanish term means an unskilled worker.
The basic income right now is about $437 for a full month’s work, according to data from Ministerio de Trabajo.
The job categories involved include gardeners, construction workers, dishwashers, supermarket demonstrators, pool cleaners and even disc jockeys. Each now has the same daily wage of 9,663.04 colons a day or $437 for a normal month with six-day weeks.
If the law were put into place today, the minimum salary would be close to $900, according to methodology proposed in the bill.
“Employers will say that it will force companies to go to cheaper countries,” said Vargas. “However, we believe it will strengthen the internal production and accelerate the economy by increasing the purchasing power of the people. Most important, itcreates dignified labor relationships, which is the essence of this proposal.”
Employers also would face double the cost of social charges, such as monthly payments to the Caja Costarricense de Seguro Social and worker insurance premiums. Both are based on salaries paid.
Current minimum wages that are lower than the proposed amount but higher than what is paid a trabajador no calificado today also most likely would increase.
Several U.S. states have raised the minimum wage including California where a successful ballot initiative sets a $15 hourly minimum wage by 2021. Labor advocates also are pushing for a federal minimum wage of that amount.