Statutory minimum wages

The example of Peru

In Peru, the Constitution indicates that minimum wages must be regulated by the State with participation of representative organisations of workers and employers. In practice, the minimum wage is set by the Government after proposal by the tripartite National Council for Labour and Employment Promotion (CNTPE).

Since 2007, the CNTPE is supported by a “technical commission on productivity and minimum wages”, which identified statistical indicators and criteria for the adjustment of the minimum wage. These criteria were adopted by the CNTPE and include expected inflation as well as multifactor productivity. Technical reports are produced by the Ministry to facilitate implementation of the adjustment mechanism.

The proposed criteria have been agreed by all parties with a view to protect the purchasing power of workers who earn the minimum wage, and ensure that higher enterprise revenues arising from increased efficiency translate into higher wages for workers who participated in the production process.