C. Barria, M. González, G. Lissardy
BBC News World
The countries with the highest monthly minimum wage in Latin America are Costa Rica (US$650), Chile (US$550) and Uruguay (US$550).
The figures, without any context, do not reflect the real value of that money in each country. For that, it is necessary to answer a basic question: what can be bought with that amount.
Ultimately, a salary is either low or high in relation to the cost of living.
In all three countries there is a better economic situation than in many other nations in the region.
However, to the same extent that salaries are higher, the cost of living is also higher.
And the effect it has on people’s quality of life changes greatly depending on the circumstances of each family.
If it is a healthy young couple with only one child, both of whom contribute a minimum wage to the family income, the situation is less pressing.
But it is often the case that people who live on minimum wage are part of larger family groups, where sometimes there are elderly people with illnesses or small children to feed.
With the economic footprints left by the pandemic and the wave of inflation sweeping the world, the region is going through a difficult time marked by high interest rates and low economic growth.
Nearly half of the Latin American population works in the informal sector, that is, they live according to what they can get each day, they have no employment contract, no stability, no social security, and no savings for their old age.
Although in 2023 things have been improving little by little, the pockets of the most vulnerable population continue to suffer, especially when most of their income goes to food or rent.
Here we tell you the stories of three families, each one lives in one of the three countries with the highest minimum wages in Latin America.
Costa Rica: Ana Yancy Segura
With a minimum wage of 352,165 colones (the current equivalent of US$650, the highest in Latin America), many might think that living in Costa Rica is relatively easy.
But although the family of Ana Yancy Segura receives a little more than that thanks to the 200,000 biweekly colones that her husband earns working as a guard, she assures that “it is not enough” to cover her basic needs and those of her three young children aged 18, 11 and 3 years.
“With this it is impossible to save. If you save 30,000 (US$55) it is already a lot, but for that you would have to stop paying the fixed expenses for the month,” the 38-year-old woman told BBC Mundo.
The family lives in Alto de San Blas, a humble neighborhood in the municipality of Cartago, southeast of San José, where many live thanks to growing potatoes or onions and, in the best of cases, construction work. “It is not easy to look for a better paid job here,” says the woman.
He calculates that in electricity, water, cable and internet he loses around 70% of one of the fortnights. The other is dedicated to paying for the transport of her son to school, the weekly fee to buy her material, essential clothing and, above all, food.
Segura believes that it is this last expense that has become more expensive, and that he does not allow himself great luxuries. He mainly buys rice, beans, coffee, milk… “If it’s enough, chicken or meat. Eggs very little, because they are very expensive and they went from 2,500 to 4,000 (US$4.6 to US$7.4) in three years. Now I buy sausage or chorizo, which is cheaper and lasts a week”, he explains.
According to the country’s National Institute of Statistics, the average monthly cost of the basic food basket in May was 58,887 colones (US$109) per capita, 25% more than three years ago.
So even though the woman tries to earn extra money cooking and sporadically selling tamales or rice pudding, she says she barely makes a profit on the cost of the ingredients.
Her husband has health insurance, but since their three children have chronic illnesses such as asthma, there are medications and treatments that cost him more. “Now I have to pay a neurologist for my son, which is worth 70,000 (US$130) per consultation. Imagine if there are several,” she says.
Segura says that she has asked the authorities for financial aid and scholarships for her children, but they have been denied because they tell her that her salary is sufficient. “And that is not true, because taxes lead us to sink. An average or poor family is not enough with these salaries, never ”, he affirms.
He did receive help from the NGO Techo to build his modest home on the same property where his three eldest children live in another house with their families. She misses having a bed, since she now sleeps on a “trunk made with two mattresses” with her husband and her baby. “When money falls, we will buy it”, she yearns for herself.
Chile: Rosario Roman
At the age of 62, Rosario Román is the main breadwinner for a family of eight people who live in two light-material houses built on land that years ago was occupied by homeless residents in the commune of La Granja, Santiago, the capital. From Chile.
As an assistant in a cafeteria, he earns a minimum salary of US$550 per month (equivalent to 440,000 Chilean pesos).
She also receives a retirement pension of US$218 a month that allows her to supplement her income.
He lives with his 57-year-old unemployed sister who has multiple illnesses and shares the plot with his nephew, wife and four children.
The nephew does not have a fixed salary because he is paid per day worked (about US$19) cleaning windows in tall buildings. In the winter there is less work because of the rains, but in the summer he can get about US$380 a month.
His wife, who is dedicated to housework (they have a baby and three school-age children), sometimes sells cosmetics in a street market and also contributes to the family subsistence.
Between all of them, they can collect about US$1,200. 70% of the budget goes to food.
“Here in Chile it is very expensive to eat,” says Román in dialogue with BBC Mundo.
“I wish we could have a good basic diet. I do not aspire to have any luxury, but I do want to live with dignity”.
With the remaining 30% they pay for electricity, water, gas, transportation and cleaning products. And in the winter they add the cost of paraffin to heat the house.
They do not spend on education or health (except for some remedies in informal commerce), nor do they pay rent.
To lower costs, Román has organized with his neighbors to buy food in wholesale markets, they have made common pots and activities to help each other through an organization called Fuerza Pobladora.
Her dream is to own her home. “At least I want to die in my own house, even if it’s small, but it’s my house,” says Román.
As this family is very large, we also spoke on BBC Mundo with two smaller families who live on the minimum wage outside the capital.
In both cases (a single mother with two daughters in Quintero and a couple with a daughter in Lota) the biggest expense is food and rent is second. With what’s left, they pay basic bills.
But in Santiago, the rent of a house in a peripheral neighborhood can occupy more than 60% or 70% of the minimum wage. That is why adult children often stay with their parents and, if they form their own family, build additional rooms on the same land.
In Chile, the poverty line per person is around US$280 a month, that is, approximately half a minimum wage.
For families living in conditions of poverty and extreme poverty, there are monetary state benefits that are paid in relation to the number of dependents (or who do not generate income) within the family group.
Added to this are subsidies for adults over 65 years of age.
The cost of the basket of goods and services with which the Consumer Price Index (CPI) is measured is considered confidential information, according to the National Institute of Statistics.
The information provided by the government is the variation in the prices of the basket, but not the value of the products that comprise it. Year-on-year inflation in the country fell to 9%, after reaching 14% last year.
Uruguay: Valeria Avondet
Valeria Avondet tries out a difficult balance to live with the equivalent of about US$550 that she earns each month for working as a sales operator in a call center From Uruguay.
This amount is comparable to the minimum wage of 21,107 Uruguayan pesos set by the government of this country, which when converted to dollars is one of the highest minimum wages in Latin America.
But Avondet, 24, knows her strict limits well.
“Half of my salary goes to rent, taxes (and) service expenses,” he tells BBC Mundo. “I manage the other.”
In that category of “the other” there is room for essential expenses such as food, although these are usually alleviated with food bonuses that you earn extra from sales commissions.
The rent is shared with two other people who live under the same roof: a co-worker and a policeman who has a better salary and is the guarantor of the monthly payment.
Avondet usually goes by bus to his job in Montevideo and walks back, to “cheap down a bit” on transportation costs.
Instead, he travels once a month to Paysandú, his hometown located about 380 kilometers northwest of Montevideo. In addition to seeing his family there, he usually takes the opportunity to cross the bridge to the neighboring Argentine city of Colón, where food is cheaper for him due to the exchange difference.
In Uruguay, consumer prices excluding rent are 94% higher than in Argentina, according to the specialized site Numbeo, and a total basic basket amounted to 18,759 Uruguayan pesos per capita in December (about US$490 at current exchange rates) according to official data.
Avondet explains that to make ends meet on her salary, she barely spends what is necessary on clothes and shoes on sales, she lacks access to credit cards and has given up going to the gym that she used to pay for.
“It is also something that I would like, but I know that if I pay for a gym I have to sacrifice other things”, he reasons.
“Uruguay is a very expensive country to live in,” he says. “It has certain good things (like) education that is free, in quotes, and in other countries that has a cost: if you can’t pay for it, you don’t agree. But (Uruguay) has a cost of living that in other countries you may not have it”.
Remember that you can receive notifications from BBC Mundo. Download the new version of our app and activate them so you don’t miss out on our best content.
- Do you already know our YouTube channel? Subscribe!
See original article on BBC