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Peru Wages
Real wages in Peru rose when the economy was advancing
in the
1950s and 1960s but then began to go down persistently.
From 1956
to 1972, average wages in manufacturing increased at an
annual
rate of 4.1 percent. But then from 1972 to 1980, they went
back
down at the rate of 3.6 percent a year, and from 1980 to
1989
they went further down at the rate of 5.2 percent a year.
Although comparisons of real wage levels over long periods
are
inherently uncertain, given many changes in the structures
of
wages and prices, it seems evident that real wages in
Peruvian
manufacturing were much lower in 1989 than they had been a
third
of a century earlier.
Even in comparison with the sharp fall in manufacturing
real
wages during the 1980s, the concurrent plunge in real
minimum
wages for urban workers was appalling. While the average
for
manufacturing fell 58 percent from 1980 to 1989, the real
minimum
wage fell 77 percent; the purchasing power of the minimum
wage in
1989 was less than one-fourth its level in 1980.
The minimum wage applies to legally employed workers in
the
formal sector. The much larger number of workers in the
informal
sector, not covered by the minimum wage, also lost
purchasing
power in the course of the 1980s but apparently not as
drastically. An index of real earnings in the informal
sector
shows a decrease of 28 percent between December 1980 and
December
1989. That index also shows extreme volatility. Real
earnings
rose steeply between December 1980 and December 1987,
almost
doubling in this period, and then plunged to a level far
below
the starting point.
Data as of September 1992
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