Observation (CEACR) - adopted 2004, published 93rd ILC session (2005)

Minimum Wage Fixing Convention, 1970 (No. 131) - Nicaragua (Ratification: 1976)

The Committee has been in receipt of two communications of workers’ organizations regarding the application of the Convention. The first, dated 23 April 2004, was made by the Trade Union Workers Confederation "José Benito Escobar" (CST), while the second, dated 12 June 2004, was made jointly by the National Union of Public Employees and the Sandinista Workers’ Confederation. The above communications were transmitted to the Government on 19 and 20 August 2004 but no reply has so far been received.

According to the CST, in the last twelve and a half years the minimum wage has been revised six times although the Minimum Wage Act No. 129 of 1991 provides that minimum wage rates should be readjusted once every six months. In addition, the minimum wage rates currently in force have lost most of their purchasing power and are therefore completely inadequate to cover the basic needs of workers and their families. Based on an estimated cost of the basic basket of essential consumer goods of 5,567 cordobas in December 2003, the CST indicates that the current minimum wage of 988.6 cordobas per month represents only 17.7 per cent of that basic basket of goods (as compared to 47 per cent in May 2002 and 45.7 per cent in May 2001). Furthermore, the CST indicates that due to the falling exchange rate of the national currency against the US dollar (15.7:1 in March 2004 as contrasted to 5:1 in August 1991), the monthly minimum wage expressed in dollars has decreased in the last five years (US$62.82 in March 2004 as contrasted to US$66.42 in August 1999, US$66.84 in May 2001 and US$68.67 in May 2002) and only moderately increased since the introduction of the national minimum wage some 13 years ago (US$62.82 in March 2004 as compared to US$46.38 in August 1991).

For their part, the National Union of Public Employees and the Sandinista Workers’ Confederation denounce the consultation process initiated by the Government as being conducted in complete disregard of the criteria referred to in Article 3(a) of the Convention and without any real and effective participation of workers’ representatives as required under Article 4, paragraph 2, of the Convention. In their view, this is not merely a problem of lack of consensus between the Government and the workers in discussing minimum wages but has to do with an institutional practice which in essence deforms and violates the principles of minimum wage-fixing set out in the Convention. Moreover, the two organizations consider the latest increase of the minimum wage rate by 10 per cent for the public sector and by 8.83 per cent for all other economic sectors to be abusive and derisory.

The Committee hopes that the Government will provide full particulars on the matters raised by the workers’ organizations to enable the Committee to better evaluate the consistency of the national law and practice with the requirements of the Convention.