opinion

The high cost of living
by Raúl Leis R. --- raulleisr@hotmail.com

True, the country's economy is growing. But for many people the economy doesn't strengthen but weakens, as they are surrounded by the spearpoints of the high cost of living, stagnant low wages, unemployment and underemployment.

In Spanish the distinction between "wage" and "salary" that's made elsewhere is blurred and the word "salario" (salary) by which Panamanians refer to both concepts derives form the Latin "salarium," the payment of Roman soldiers to buy salt. Today it has to serve for much more, as it should reflect the value of labor performed and the goods and services that the worker and his or her family needs to live in a dignified fashion.

If the minimum wage isn't adequate and sufficient, it obliges the worker to work more hours or, along with family members, to search for various jobs or occupations to augment the pay from the regular job. If only the nominal wage (the amount of money in the paycheck) is increased and it has no effect on the real salary (the capacity of the nominal wage to acquire goods, given the prices of the latter), it worsens the situation of those who receive minimum wage and so on up the wage scale, as workers' standards of living are sucked down.

It's clear that governments are many times very partial arbiters when they decide labor policies and set minimum wages, given that in critical moments they tilt toward the economically powerful.

If there are public policies that provide adequate health, education, housing, water, transportation and safety services, those would limit the need for large or frequent wage increases because these needs would be satisfied in other ways. The adoption of an indexed scale is needed, because if salaries would automatically go up according to the real cost of living, there would be no accumulated need for workers to make demands in amounts that become hard to get because of the resistance that forms.

Within such a sliding scale the increase in the minimum wage should additionally contemplate the company's productivity.

Can businesses pay for the proper adjustment of the minimum wage. Definitely the larger companies of the private sector can, because their earnings are going up. It's their duty --- remember, we are among the countries with the world's worst distribution of income.

Those that can't, for example the micro and small businesses, should manage an indexed scale with other characteristics.

A just wage is a way to redistribute income without paternalism, by way of recognizing the value of human labor.

The drama of poverty is not only confronted with gifts, alms, raffles and telethons, but much more effectively with fair wages, jobs, integrity and public policies.

It's necessary for the principal actors --- workers, businesses, government --- to promote solutions that have at the heart of their reason for existence the lifting of workers out of poverty, against the backdrop of a strategy for equitable and sustainable development.