Andean Group - March 2011 (ISSN 1741-4466)

Minimum wage increase: On 2 March Morales decreed a 20% rise in the minimum wage, raising it from a monthly B$679.35(US$97) to B$815.40 (US$118). He also decreed an extra 10% rise in wages for health sector workers, teachers, the armed forces and police officials. In 2006, when Morales first took office, he raised the minimum wage 13.63%, from B$440 to B$500. This was followed by increases of 5% in 2007, 10% in 2008, 12% in 2009 and 5% in 2010.  The latest increase follows 11 days of talks with the main umbrella union, the Central Obrera Boliviana (COB) still threatening unrest amid inflationary concerns [RA-11-02]. While it represents a concession of sorts by Morales who previously said that he would raise wages only in line with inflation (7.18% in 2010) the move has failed to placate the COB, which puts the cost of a family basket of basic goods at B$8,300 (US$1,199). The COB objects not only to the increase (though its own demand is completely unreasonable) but the unilateral way in which it was announced. This in turn suggests that Morales has not learnt from his misjudgement over the so-called gasolinazo - his failed attempt to scrap fuel subsidies at the end of last year, which would have seen a 73% and 83% rise in petrol and diesel costs respectively [RA-11-01]. Aside from the overnight price rise, the COB's major gripe with Morales was lack of consultation.