SAN SALVADOR (Reuters) -El Salvador’s President Nayib Bukele on Thursday requested a minimum wage hike of 20% from August due to poor Salvadorans suffering from global inflation.
Bukele, speaking in a video shared on his Twitter account, said the government would subsidize small and medium-sized companies for 12 months to cover the increase, with the goal of stopping businesses from passing on higher costs to consumers.
“We can do little to change the rules of the world market, but we can do some ethical things,” Bukele said. “That is why this morning there is already a request to the Council of Minimum Wages to increase the minimum wage of Salvadorans.”
The current minimum wage is $300 per month and was last increased in 2017 by 15%.
Bukele also ordered new food handouts under a pandemic social program, which he said could help inflation by lessening the demand for food purchases.
“By introducing so much food to Salvadoran families, we are going to lower the local demand. And although it will not impact global prices, it may impact local prices,” Bukele said.
El Salvador this month became the first country to adopt bitcoin as legal tender along with the U.S. dollar, with Bukele touting the cryptocurrency’s potential as a remittance currency for Salvadorans overseas.
Bukele’s recent political moves, including replacing senior judges and the attorney general, have complicated negotiations for a potential $1 billion-financing program from the International Monetary Fund.
(Reporting by Nelson Renteria and Cassandra Garrison; editing by Frank Jack Daniel)
