From what we have observed:
Having a job is a terrible way to earn a living in El Salvador.
Warning: Not a study. All numbers are based on asking people what they make, what their families make, and reading newspapers/reports in a language I barely understand. Kindness appreciated.
Tweet I cannot say what all employment in El Salvador is like, but from what I’ve seen, money is out there, but jobs are a terrible way to try to get it. That said, I just got a part time job, and I’m extremely happy about it! But that’s another story.
What I mean when I say that jobs are a terrible way to make money, or even to support yourself, is that it seems the numbers (cost of living versus income) don’t add up. I have much more to learn about how things function here. How things stay afloat. Don’t start telling me “Of course the numbers don’t add up, think immigration and remesas dumbass.” ….. instead just let me ramble a bit…
I hear and read varied numbers, depending on the source and their intention, about wages here, but no matter who is talking they are low. Stupid low. Maids and gardeners will work all day for $10-15.00. A regular full time professional job earns about $400-600/ mo and professionals with advanced degrees pull in about $1000/mo and are happy to get it. I have read that 40% of the population earns less than $300 a month. That is less than $10 a day. But a big mac meal at Mcdonalds costs $4.99, and Mcdonalds is packed.
A standard work agreement (from what I’ve seen) is for 44 hours per week for the monthly salary, though most people exceed that. The schedule may technically be for five eight hours days, and a half day Saturday, but that is just a framework, not a defensible limit. The six day work week seems standard, and overtime without pay is expected.
Human contributions in the form of effort, thought, skill and creativity do not seem to be valued highly in and of themselves.
You knew that already, right? But I want to elaborate about the value of other things.
There are huge value imbalances, compared to what I am culturally accustomed to in the United States. Rent for retail space is disproportionately high. At the malls, in the business districts, and in fashionable areas they are comparable to rents we payed in the US for retail space, but deliver approximately 1/5 the transactions. Looking at the traffic in malls, and having been in retail, I question the store’s survival. There is less expensive retail rent in less wealthy areas. The potential income for th
e retail establishment goes down proportionally in less expensive areas (just like the US), so the math seems close to the same. Rent exceeds what I would expect the net income to be.
House rentals, although low compared to the San Francisco Bay Area, are not low when compared to prevailing wages. A professional job earns $400 a month and rent in low income portions of the city are $400 a month and food prices at the super market are nearly as high as the US.
The real-estate is valued highly, as a tangible thing. (productive or not)
Having been to malls, both the stylish and the not-so-stylish, I have to say, I cannot afford to shop at them. There is an abundance on name brand goods and fast food franchises all with prices comparable to those in the US. Some local food chains have slightly lower prices, but for the most part, a mall is a mall. Clothing and shoes seem to cost about what they do in the states or more. I have difficulty figuring out who buys enough of these goods to support the businesses at the mall. Items produced outside the country, and almost anything with a lot of packaging, is regarded as vastly superior and more valuable than anything produced locally. (My husband joked that in El Salvador, the money only flows one way….out)
Goods are valued. Imported goods are valued even more highly.
So I asked myself the question, “How do businesses stay open, when rent seems out of proportion with the probable revenue, and the cost of physical items needed to do business (like items needed to live) seem way out of sync with the economy?”
Repeat: Human contributions in the form of effort, thought, skill and creativity are not valued highly, in and of themselves.
When running a business in the US, the cost I could not get under control was LABOR. It was the factor we could not reign in enough to be fully profitable. In making a business plan here, the conflicts with potential partners seemed pretty pronounced when addressing the topics of labor cost, and the worth of skill-experience and ingenuity compared with tangible assets. In El Salvador, labor cost is low enough to compensate in large part for other imbalances in doing business. More value (money) is devoted (proportionally) to physical and tangible things than to those who do things with those assets to make them produce. Having moved here from Silicon Valley, where the brilliance of the team is what makes or breaks the company, and companies distribute value (money) with that in mind, I find the different balance striking.
Stuff is worth more than People by far, in this economy.
This economy might not be sustainable without remesas (remittances or money from Salvadorenos living abroad sent back home) sent from outside the country, which compensate for the inequalities between the cost of goods, and the lack of funds available to buy them (duh). I recently read some impressive numbers on the percentage of goods producible but which are imported by the tons. Pineapples, bananas, beans, the list of things that grow here quite well but which are imported and consumed here with money that more or less, does not exist.
I read that on average, Salvadorans spend 120% of their income annually. Wow.
Do the remesas sustain the system, and in effect make it OK for companies to pay such low wages? I’m just asking. I don’t know the answer.
Below is some information and quotes
Check out this quote from The US State Dept:
Remittances from Salvadorans working in the United States are an important source of income for many families in El Salvador. In 2010, the Central Bank estimated that remittances totaled $3.5 billion. UN Development Program (UNDP) surveys show that an estimated 22.3% of families receive remittances.
The TOTAL GDP in 2010 was about $21.9 Billion so almost 20% of the entire economy is remittances.
Another eye opening set of stats from American Market Media:
EL SALVADOR: REMITTANCE NATION
- 2.5 million Salvadorans, legal and illegal, live in the U.S., more than one third the total in El Salvador itself.
- El Salvador’s principal export is its people, after that, coffee, sugar, rice.
- El Salvador’s principal import are remittances from Salvadorans in the U.S., estimated at $3.5 billion annually, 19.1% of the GDP.
- Remittances to El Salvador have increased by more than6 percent a year for more than a decade, with double-digit growth more recently.
- Remittances to El Salvador represent 133 percent of all exports, 655 percent of foreign direct investment, and 91 percent of the government budget.
- Remittance flows to El Salvador are so large the country completely dollarized its economy in 2001.
- 22 percent of households in El Salvador receive remittances, more than any other Latin American country. Three quarters of that money goes to household expenditures.
- El Salvador has a 13 percent sales tax and no property tax. Since remittances are primarily used for consumption, they amount to the poorest people in the country subsidizing the government.
Anyway, I have a part time job teaching English and I am very happy about it! I earn under $5/hr, and from a semi-secret
survey of other teachers, believe I make a little bit more than most (I’m an imported expat woman so…….). I’m very happy to have the job. I will be earning a little money, getting to know people, learning the city and the culture. The process of looking into employment has got me thinking maybe a little too hard.
I now earn approximately 10% per hour, what I did in the job I left. That is food for thought, and I’m just chewing.
So what do YOU think? We want to hear from some other Salvadorenos about these ideas. Write your comments below and send this to your friends.