The President of Ecuador, Guillermo Lasso, decided to raise 6.25% the Basic salary to $ 425 for the private sector in 2022, a decision that employers fear will have adverse effects on jobs and the country’s economy.

Lasso, a former conservative banker who took office since May, announced Monday night in a televised speech the increase in the minimum wage, the highest in the last eight years, as part of measures to reactivate the economy, hard hit by the Covid-19 pandemic.

It must be recognized that this is a decision that implies a great effort for the business sector, but it is a fair benefit that corresponds to the workers’ sector, “Lasso said in an interview on Tuesday.

The Basic salary It remained frozen at $ 400 during 2021 and, in 2020, the pandemic forced a momentary reduction in wages to face the country’s fiscal crisis.

Lasso said that the economy is normalizing and that for this year he expects economic growth of 3.5%, a recovery after the 7.8% drop in 2020.

The Government has said that in the first four months of management have created some 275,000 new positions of work and that it is managing to reduce a large fiscal deficit.

“It is not technical to increase wages in an excessive way because it could generate an adverse effect on employment,” said the president of the Chamber of Industries and Production of Ecuador, Pablo Zambrano, to a local radio station. “What do we get by fixing salaries by decree if there is no sustenance in the economy.”

It is necessary to analyze economic growth, productivity and economic recovery and those factors in Ecuador, as a result of the crisis, do not exist, “he added.

Lasso’s announcement is known when workers and employers talked to set the amount of the salary based on inflation projected for 2022.

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Lasso said he was following through on his campaign offer to phase the salary up to $ 500 by the end of his term in 2025.

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