Will the salary increase proposed by Luis Abinader be real?

We will see here if this increase can really address the basic basket, non-sectorized workers, and inflation levels.

The last salary increase for the non-sectorized private sector was in 2023. According to article 456 of the Labor Code, salaries must be reviewed every two years, so it was not a proposal by President Abinader, but it was time for that review.

The real wage allows a worker to acquire the amount of goods that can be bought with the nominal wage. The nominal salary is what an employee has left after the pension, health, taxes, and all other payroll deductions are deducted from the salary.

So, what actual salary is the president referring to? The wages of a non-sectoral employee in a small company is 14,161, and for a large one, it is 24,900.

With the proposed 20 percent increase, the minimum wage for small companies would be 16,993 and that of large companies 29,998, which is very low compared to the cost of the basic basket, which is 46,251.42.

The president meant that the increase was above inflation because the Central Bank’s goal was for prices to increase between 4.0% and 1.0%.

Year-on-year and accumulated inflation have exceeded the target range since December 2024, when it was 4.01%. If the proposed increase is 20 percent, according to the inflation index, employees would have 15 percent and a little more to acquire goods and services.

We know that reality exceeds the basic basket and the inflation percentage and that less than 30 thousand pesos or less than 20 thousand pesos will not be enough for the employees who earn these salaries to cope with their daily lives.

Minimum wage for the non-sectorized sector

The world of minimum wages in the Dominican Republic is diverse and broad. We are talking about more than 10 minimum wages, and each one is different because it represents particular sectors, namely, domestic workers, the sugar industry, heavy machinery in the agricultural sector, and a list that includes skilled workers in the construction area.

When the president speaks of the minimum wage of the non-sectorized private sector, he refers to all the administrative and technical workers of private companies who earn a minor salary.

Now, the question is, do you think that a 4,998 pesos increase will be enough? Can that improve its economy? I look forward to the comments.