Family Basket in the Dominican Republic: More expensive or cheaper than in other countries in the region?

Santo Domingo — There has been much talk about the mismatch between the basic family basket and the minimum wage in the country. It is not a coincidence. The disparity, with a high margin of difference, persists because the government has not balanced living costs with the base remuneration of private employees in the non-sectorized sector.

A simple comparison is enough to determine that the minimum wage is not enough to complete the basic basket. This reality may not improve for now, even if the government implements a salary increase for private workers.

“Let wages go up and food go down.” That was the slogan that different civil organizations shouted (and repeated repeatedly) during a protest on Tuesday outside the Ministry of Industry and Commerce. The cost of the average family basket “is unattainable,” the demonstrators lamented.

The issue has come amid a possible increase in the minimum wage for the non-sectorized private sector, whose discussions are in charge of the tripartite body: government, businessmen, and unionists, in the National Wages Committee (CNS).

It has been 18 days since President Luis Abinader advanced the Executive’s proposal: an increase of at least 20%. Days later, the trade union centrecentersnced theirs: 30%. Meanwhile, the businessmen are still fine-tuning details to present their proposal. The follow-up meeting is scheduled for Monday, 17.

Given that the issue of the “high cost of living” has taken center stage in the public agenda, Listín Diario has looked at the value of the average family basket of at least nine Latin American countries to compare it with that of the Dominican Republic.

The ratio was made using the dollar as the global standard currency. For comparison, this newspaper has investigated different sources in each country, such as the National Institute of Statistics of Guatemala and Ecuador and some newspaper articles. It is important to note that the following figures constitute averages or estimates and may vary due to factors such as inflation, fluctuations in exchange rates, and other elements:

1. Ecuador = USD$798,31

2. República Dominicana = USD$746.42

3. Venezuela = $531.57

4. Honduras = $489.69

5. Guatemala = USD$465

6. Argentina = $439.24

7. El Salvador = $278.80

8. Puerto Rico = $161

9. Mexico = USD$118

10. Chile = USD$85

The Dominican Republic is in second position as one of the countries with one of the highest family baskets in the region. The USD$746.42 (at the current exchange rate) is equivalent to RD$46,420. According to the Dominican Central Bank, that was the value of the national family basket at the end of January.

According to the Central Bank, the cost of the basket has increased by RD$1,493 (3.32%) compared to January 2024, when it closed at RD$44,927.

If we contrast the current value of the family basket with the minimum wage of large companies (RD$24,990), it is evident that an employee cannot cover all the goods and services that it includes. That is, it would register a deficit of RD$21,430.

And not to mention if the comparison is made with medium, minor, or micro companies, whose salaries are even lower.

For example, if the relationship is made taking as a reference the minimum wage of small companies (RD$15,351), the deficit would be -RD$31,069. That would require a worker to cover the average family basket completely.

According to the Central Bank, the country’s family basket is divided into five quintiles according to the income of the population. Each quintile represents 20% of the population.

Quintile 1: the 20% of households with the lowest level of expenditure.

Quintile 2: 20 to 40% of the population in income.

Quintile 3: 40 to 60% of the population’s income.

Quintile 4: 60 to 80% of the population in income.

Quintile 5: the 20% of the population with the highest income.

For example, in January, quintile 1 closed with RD$27,828; quintile 2 with RD$36,163; quintile 3 with RDR$42,660; quintile 4 with RD$49,466; and quintile 5 with RDR$75,490, according to the Central Bank. When comparing the current minimum wage of large companies in the non-sectorized sector with the cost of each quintile of the family basket, it is evident that no employee could cover even the first quintile.

After President Luis Abinader raised the minimum wage issue, the unionists reiterated what they wanted to achieve at the tripartite table: to level the base salary with the cost of living. That goal, however, would not be achieved with his proposal for a 30% increase.