VZCZCXYZ0001
PP RUEHWEB

DE RUEHDG #1070 1251952
ZNR UUUUU ZZH
P 051952Z MAY 07
FM AMEMBASSY SANTO DOMINGO
TO RUEHC/DEPT OF LABOR WASHDC PRIORITY
RUEHC/SECSTATE WASHDC PRIORITY 8160
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RHEFDIA/DIA WASHDC PRIORITY
RUMISTA/CDR USSOUTHCOM MIAMI FL PRIORITY

UNCLAS SANTO DOMINGO 001070 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR WHA/CAR, WHA/EX, DRL; SOUTHCOM ALSO FOR POLAD 
AMSELEM. 
 
E.O. 12958: N/A 
TAGS: ECON ELAB PGOV DR
SUBJECT: DOMINICAN UNIONS, BUSINESS GROUPS AGREE ON WAGE 
INCREASES FOR MOST WORKERS 
 
REF: SANTO DOMINGO 0556 
 
¶1.  SUMMARY:  Representatives from umbrella labor unions and 
business groups reached an agreement on April 25 to hike the 
country's minimum wage by 15 percent and raise salaries by 5 
percent for all other private employees earning up to 30,000 
pesos (around USD 1,000) per month. These negotiations, which 
take place on an annual basis, usually deal only with the 
minimum wage.  This year's agreement is the first of its kind 
that seeks to raise wages for employees earning above the 
minimum; however, officials in the Secretartiat of Labor have 
indicated that they will enforce only the hike in the minimum 
wage, which is retroactive to April 1.  END SUMMARY. 
 
¶2.  The custom in the Dominican Republic is that at the 
beginning of each year, representatives from the major 
umbrella labor unions and business groups meet on a 
tripartite basis with government representatives to reach 
consensus on a percentage by which to increase the country's 
minimum wage.  These agreements take place within the 
framework of a government institution known as the "National 
Committee on Salaries." The results are generally translated 
into national policy and enforced by the Dominican 
government. 
 
¶3.  This year, for the first time, union representatives have 
demanded raises for workers earning less than 30,000 pesos 
per month -- about USD 1000, a cutoff that is well above the 
minimum wage and includes the majority of the Dominican 
workforce (including many Dominican employees of the U.S. 
Embassy). Unions justified their demands by asserting that 
these workers' salaries had failed to keep up with 
inflationary losses over these past several years. 
 
¶4.  Unions had originally demanded wage increases of 25 to 30 
percent for all workers earning less than 30,000 pesos per 
month.  Business representatives offered a 10 to 12 percent 
hike in the minimum wage only, insisting that wage increases 
for workers earning above the minimum were outside the legal 
scope of their discussions.  After 13 failed negotiating 
sessions, the two groups appeared to have made little 
progress. Unions repeatedly announced their determination to 
hold country-wide strikes over the issue, but repeatedly 
postponed these plans in order to go back to negotiations. 
 
¶5.  On April 25, after labor unions had held their first 
small protest, the Commision finally reached agreement on a 
15 percent hike in the country's minimum wage, retroactive to 
April 1. Further, they agreed on the concept of a 5 percent 
raise for all other employees earning up to 30,000 pesos per 
month. The 5 percent wage hike for was considerably less than 
the 25 to 30 percent union demand and failed to recapture 
purchasing power lost to inflation. Nonetheless, the 
agreement appeared to mark a considerable strategic victory 
for the unions, as it seemed to establish a precedent that 
annual wage deliberations can apply to skilled labor and to 
middle class employees. 
 
¶6.  Government spokesmen have not objected to this 
development; in fact, during the long series of frustrated 
meetings they appeared to be pushing business representatives 
to be more accommodating.  By acknowledging a 30,000 
peso-per-month cutoff, participants appeared to include a 
considerable majority of workforce. The question is whether 
the broader private sector, including small businesses, will 
accept and apply the results.  Further, prospects are unknown 
for formal enforcement action for non-unionized firms. 
 
¶7.  In conversations with employees from the Embassy's 
management section, Secretariat of Labor personnel indicated 
that the Secretariat will issue a government decree mandating 
only the minimum wage increase. Officials characterized the 5 
percent increase for workers earning above the minimum as an 
agreement between the private sector and unions only, not 
carrying the authority of the National Committee on Salaries. 
This appears to imply that this aspect of the agreement will 
be voluntary. Press reports have failed to capture that 
crucial nuance. 
 
¶8.  Drafted by Alexander T. Bryan. 
 
¶9.  This and other extensive material can be found on our 
SIPRNET site, http://www.state.sgov.gov/p/wha/santodomingo/ . 
BULLEN