SAW Project
Setting Adequate Wages - Costa Rica
Context
In Costa Rica, the minimum wage is a fundamental right established in the Constitution.
The minimum wage is set by the National Wage Council and updated annually. In January 2024, the minimum wage was set at CRC 358,609.5.
The minimum wage plays a crucial role in reducing the incidence of poverty in Costa Rica. However, in 2023:
- 24.5% of the wage-earning population received a remuneration below the minimum wage.
- The poverty rate would have been reduced by 1.8pp, if all the people who were not paid the minimum wage had received the respective amount.
In this context, the SAW project in Costa Rica supports wage setting mechanisms in making a stronger use of data and evidence on the needs of workers and their families and economic factors. Additionally, the project identifies national factors and conditions that enable wage increases, and supports measures to raise productivity in selected supply chains. Finally, the project contributes to raise awareness on living wages, provides technical assistance to national constituents in this regard, and engages with existing living wage initiatives in the country to promote alignment with ILO living wage principles.
The SAW project at a glance
Objective
Promoting wages that ensure a just share of the fruits of progress to all
Timeframe
From October 2022 to December 2026
Project strategy
Pillar 1: Support wage setting mechanisms
Minimum wage settings are based on relevant indicators of the needs of workers and their families and economic factors.
Activities:
- Review of the current methodology for setting the minimum wage.
- Dashboard on information to calculate minimum wage adjustments.
- Impact assessment of homogenising occupations and reducing minimum wage.
- Training on wage policies for new members of the NWC.
Social partners use information on the needs of workers and their families for meaningful and informed collective bargaining of wages.
Activities:
- Analysis of wage-related clauses in collective bargaining agreements.
Compliance with statutory and negotiated wages is improved.
Activities:
- Study on compliance with the minimum wage and main reasons for non-compliance.
- Training workshops on compliance with the minimum wage.
- Information campaign to promote compliance with the minimum wage.
Pillar 2: Enable wage growth
Productivity and wages are improved in enterprises in selected supply chains.
Activities:
- Assessment and training about the factors that condition productivity improvements at the economic unit level in selected supply chains.
Macro factors and institutions that support and enable rising wages are assessed.
Activities:
- Technical study on the relationship between minimum wage and labour informality.
- Technical study on factor productivity to inform the methodology to set minimum wage adjustments.
- Study on how to incorporate the payment capacity of companies in the methodology to set minimum wage adjustments.
Pillar 3: Engage with living wage initiatives
Governments and social partners have a better understanding of living wages.
Activities:
- Carry out research and raise awareness on living wages.
- Develop and disseminate the ILO methodology to estimate living wages.
International and national living wage initiatives are informed about the needs of workers and their families and economic factors.
Activities:
- Engage with existing living wage initiatives to promote alignment with ILO living wage principles.
For further information, please contact:
Mr Juan Ignacio Castillo
National Project Coordinat
Email: [email protected]
Additional resources
SAW Project
Setting adequate wages
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Costa Rica
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SAW Project
Setting adequate wages