Desempleo y determinación de incrementos salariales

In Bolivia, the issue of wage increases for workers is a recurring topic that is addressed every year. The Bolivian Workers’ Union (COB) presents proposals for wage increases, based on percentages that they consider fair and necessary to guarantee the well-being of workers. These proposals are evaluated by the government, which must weigh various economic and social factors before making a final decision.

The National Chamber of Industry (CNI) has expressed its opinion that a wage increase is unfeasible and proposes freezing wages through 2024. They argue that a wage increase could lead to an economic recession, encourage smuggling, cause the loss of private investment and job cuts. For their part, the Federation of Private Entrepreneurs of La Paz (FEPLP) and the Departmental Federation of Micro and Small Enterprises of La Paz (FEDEMYPE) warn that a wage increase would be unfeasible and could lead to staff cuts. The Confederation of Private Entrepreneurs of Bolivia (CEPB) points demo slot out that at this time it is not appropriate to adopt radical positions, but rather to seek the articulation of demands to find balances that satisfy the needs of workers without harming the stability of companies.

The last Supreme Decree related to salary increases was approved in 2023, establishing an increase of up to 3% in the basic salary (HB) and 5% in the national minimum wage (SMN).

When President Luis Alberto Arce Catacora took office in November 2020, the unemployment rate stood at 8.4% and wage increases remained frozen. However, thanks to the economic policies and measures implemented by the National Government to rebuild the economy, unemployment rates were reduced and workers’ wages increased, despite fluctuations and the global economic recession.

To prove that a wage increase does not necessarily lead to unemployment, as private employers in the country claim, let us consider the periods from 2021 to 2023, years in which wage increases were implemented. During this period, the open urban unemployment rate decreased from 8.4% in 2020 to 3.6% in the third quarter of 2023.

According to the National Institute of Statistics (INE), in 2021 the SMN increased by 2% compared to the previous year, with an unemployment rate of 5.2%; in 2022, the increase was 4% and the unemployment rate fell to 4.3%; finally, in 2023, the increase was 5% and the unemployment rate reached 3.6% in the third quarter. These increases did not translate into an increase in the unemployment rate.

According to the International Labour Organization (ILO), in its report entitled «Labor Panorama 2023 – Latin America and the Caribbean», Bolivia (3.6%), along with Nicaragua (3.3%) and Mexico (3%), registered the lowest unemployment rates in the region until the third quarter of 2023. The highest rates corresponded to Colombia (9.4%), followed by Chile (8.9%) and Costa Rica and Uruguay (8.1%).

Economic theory tells us that an increase in production raises the level of employment, which results in a decrease in the unemployment rate. In this sense, the current policies of the Government of President Luis Arce focus on industrialization with import substitution and a broad diversification of the country’s productive base, covering not only the agricultural sector, but also mining, hydrocarbons, manufacturing and services. Diversification is observed in several productive projects such as the Biodiesel plants, Mutún, and the industrial complex for basic chemistry of lithium derivatives, among others.

In 2024 and beyond, it is essential for employers to look after the well-being of their workers, as this is directly related to their productivity and motivation. Workers who receive salary incentives tend to perform better. Therefore, there is a close relationship between investment in salaries and the results obtained by the company. In addition, the data show that salary increases during the period analyzed have not generated unemployment.