President Santiago Peña announced on Wednesday, June 17, a 5% increase in the minimum wage, doubling the percentage that would correspond to the accumulated inflation of the past 12 months, which was 2.4%. As a result, the minimum wage will rise from the current G. 2,899,048 to approximately G. 3,044,000, representing an increase of about G. 144,952.
The decision came after the National Minimum Wage Council (Conasam) — a tripartite body composed of government, employer, and worker representatives — ended its sessions without reaching a consensus. Labor unions demanded an increase of between 20% and 22%, equivalent to about G. 547,000, arguing that the minimum wage has lost purchasing power over the years. Meanwhile, the business sector insisted that the adjustment be strictly limited to the variation of the Consumer Price Index (CPI) measured by the Central Bank of Paraguay.
In a speech during the presentation of his management report before the National Republican Association (ANR), Peña justified the decision by stating that an increase based solely on inflation would be far too low for working families. The president maintained that the 5% rate is balanced and does not jeopardize the country's macroeconomic stability.
The president argued that although the social protection network has strengthened over the past three years, the benefits have not reached all Paraguayans equally. "Those Paraguayans with higher incomes have seen their incomes grow, but a large majority of Paraguayans have not seen their incomes increase," he said.
The lack of agreement within Conasam led the body to recommend to the Executive a "balanced wage adjustment," considering not only the CPI but also other economic and social factors analyzed over a month of meetings. Conasam's president, Jorge Rivas, highlighted that the process included studies on the historical evolution of the minimum wage since the 1990s, with support from the Labor Observatory of the Ministry of Labor.
On the union side, the reaction was one of rejection. The Classist and Combative Current (CCC) labeled the 5% increase as a "scam" and a "mockery" of the working class. The organization stated that the new amount "does not even cover the cost of three kilos of meat" and presented its own studies showing that the real cost of living for the monthly sustenance of a Paraguayan household reaches G. 7,614,000. The CCC called for street protests to denounce the decree and demand a fair wage adjustment.
Bernardo Rojas, representative of CUT-A, maintained the sector's position of not yielding on the 20% demand and criticized Conasam as an institution "without much value" in its current form, advocating for a deep legal reform to turn it into a true national wage commission.
On the employers' side, representative Enrique Vidal Lovera defended strict compliance with current legislation, which ties the adjustment to the CPI, and questioned the consistency of the study presented by the unions for using 1989 as the historical baseline.
Former Minister of Labor and current vice president of Asomipymes, Carla Bacigalupo, proposed that the debate go beyond the percentage increase and include structural changes in wage policy, such as unlinking the minimum wage from other economic variables — since, according to her, automatic adjustments impact everything from court fees to the General State Budget, generating an "inflationary spiral."
The Executive Branch is expected to formalize the adjustment through a presidential decree between June 19 and 20, establishing the new minimum wage that will apply nationwide starting July 1. After the IPS deduction, estimated at about G. 273,000, the net amount will be close to G. 2,767,000.