According to the non-governmental Consumer Defense Center, the figure, calculated using its own methodology, was $706 to $920.
January 10, 2024- 23:05
Cost of living is a calculation of the cost of obtaining the products and services necessary for a decent life for an average family. Every nation has its own way of setting it up. In El Salvador, the state does this by simply multiplying the value of the original basket by two. With that parameter, the cost of living by October 2023 will be $515.62.
However, the truth is that a family not only eats certain foods, but also consumes various basic services (water, electricity, telephone) and pays for transportation as well as non-food products. Does. You will also need to allocate money for accommodation.
For this reason, the non-governmental Consumer Defense Center (CDC) has established its own methodology for calculating the cost of living, in which it adds 9 additional food items to the basic basket, such as cream and hard cheese; As well as 12 daily use items including toothpaste, toilet paper and laundry detergent. The unit also created a section for clothing and rental expenses.
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With these additions, in 2019, it was established that the real cost of living for a family in El Salvador was $706. Applying the same criteria, the CDC revealed that the figure for October 2023 (the date taken to conduct the study) was $920, $214 more than four years earlier, an additional 23%.
The organization made these findings public in a report presented yesterday, Wednesday, in which they also proposed increasing the minimum wage.
“We should think that to live a dignified life, it is not necessary for a person to be guaranteed only the right to food. The base should include all the elements that Salvadorans use on a daily basis,” commented Danilo Pérez, executive director of the Center for Consumer Defense.
Therefore, neither urban nor rural minimum wages are currently able to meet these needs. With discounts already in place, that’s about $328 per month in the city. In the region this figure reaches only $218.52.
The CDC included a number of data in its report that show that Salvadorans are not going through good times in the economy. For example, according to a 2023 FUNDAUNGO survey, 45.8% have purchased less food and 14.2% have added other low-value products to their diets.
Another study, this one conducted by the Francisco Gavidia University, shows that protein consumption has been significantly affected, noting that 75.3% of Salvadorans have reduced their consumption of beef; 40.3%, chicken; 32.2%, egg; And 23.5% have reduced their consumption of cheese due to high prices.
Therefore, the poverty rate has increased so much since 2019. According to official data, at the end of 2022, 1.69 people were in poverty in El Salvador, which represents an increase of 10.12% compared to 2019.
In the category of extreme poverty, the number of people falling into this situation in the country has increased by 200,000 since 2019, according to the Economic Commission for Latin America and the Caribbean (ECLAC). In 2019 this rate increased from 5.6% to 8.7%. These are people who are no longer able to meet the value of even a single basic basket.
need to increase minimum wage
Considering the fact that poverty and extreme poverty have increased in significant numbers, it is necessary to find solutions. One of them, according to the Center for Consumer Advocacy, is to raise the minimum wage to a scale that meets the most comprehensive calculation of the cost of living, namely $920.
“Clearly, this is a very high value for the current productive capacity of the national economy,” the institute explained in the report published yesterday. For this reason, they all propose a 25% increase in the minimum wage, which in El Salvador is 11.
For example, for Commerce and Services (which is the same across industries), which is currently at $364.80, an increase of $91.20 is proposed, so it will remain at $456. The same, as the reader will see, does not reach 50% of the comprehensive calculation of the cost of living of the same institution that proposes it ($920), but it is much closer than the current one, barely 40%.
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The lowest minimum wage in this country corresponds to the rural sector (coffee and cotton picking) and is $243.46. With the CDC proposal, they would rise $60.86, to $304.32.
According to the institution’s calculations, this measure will improve the wages of 732,000 people, reaching 26% of the total employed population.
However, the most important data concerns the impact on poverty: in terms of relative poverty, it would reduce by 4.4 percentage points; At the peak, the reduction would be 3%, bringing the total percentage to 5.7%, around 2019 levels.
“This will improve private consumption, the main variable of which is wages. For companies, this would mean an increase in their sales, profits and investments, the CDC concluded in its report.