A big hoo-hah has been set off in Peru with the decision (internal, non-committee, executive order) by the Humala government to raise the monthly salaries of its ministers by 100%. Yup, overnight they decided to double their wage packet and will now receive U$10,638 for a month’s work.
Not surprisingly the pushback has been strong, especially from public sector workers such as teachers, judges and police who have been refused salary increases by the government on the grounds that they can’t afford them. Meanwhile, the defence of the 100% salary increase from the government has been along the lines of “they’d earn much more in the private sector and we need to attract the cream of the crop to run the governmen ministries, therefore we must compete“. In other words, the usual stuff from both sides.
On the subject, El Comercio put together a very good report linked here that compares the average salary for ministers in South America. The results are here on this chart:
As you can see, Chile tops the list with ministers that earn U$14,341 per month on average, then comes Brazil on U$11,222 and now jumping up to third place is Peru, with its U$10,638/month salary. That already looks pretty heavy, as anyone with a smattering of knowledge about South America knows that Brazil and Chile are more expensive places to live in and then there’s already a big gap to the 4th placed Uruguay at U$7,197/month. Meanwhile, down there at the bottom we have Bolivia, whose ministers get U$2,329/month in salaries.
But El Comercio went another step and it’s this chart below that gives an idea why this doubling of salary is causing indignation in Peru this week. What the report did was to check with the World Bank database for the minimum wages in each country in dollar terms, then divide said minimum wage into the ministerial salary numbers. This gives a ratio of the multiple to minimum wage your minister earns.
And now, as you see, Peru is at the top because its ministers earn 40 times the minimum wage. Chile is still high up, but then a big drop to all others, Brazil included. Right there at the bottom, Argentine ministers earn 8X the minimum (which is partly due to Argentina’s minimum being the highest of the region). On seeing this and using each country’s baseline salary as a yardstick for the cost of living, we get a better idea as to why people are up in arms in Peru over this ministerial payout.
So tell me again how this Ollanta government is all left wing and Chávez-worshipping, like you were telling me in 2010?