Panama
3.3 Panama Manual Labor
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The Labor Code, in its Article 174, states that the minimum wage shall be fixed periodically, through Decree from the Executive Branch.  The minimum wage in force since January 15, 2020 is established by Executive Decree No. 424 of December 31, 2019, wherein the hourly rate consists of B/.3.24 for Region 1, and of B/.3.05 for Region 2;   from this rate onward the employer is free to establish the salary scales as per each position in its company. The regionalization of the minimum wage set by Executive Decree is by Districts, grouped into Regions.   

Region 1 corresponds to the District of Panama, Colon, San Miguelito, David, Santiago, Chitre, Aguadulce, Penonome, Bocas del Toro, La Chorrera, Arraijan, Capira, Chame, Anton, Nata, Las Tablas, Bugaba, Boquete, Taboga, San Carlos, Chepo, Guararé, Los Santos, Pedasí, Dolega, San Felix, Baru, Boqueron, Portobelo, Donoso, Santa Isabel, Santa María, Parita, Pese, Atalaya, Changuinola, Chiriquí Grande, Almirante, Tierras Altas, and Omar Torrijos Herrera. Region 2 considers the rest of the districts in the country.

Article 334 of the Labor Code, declares of public interest the constitution of unions as an effective means to contribute to the economic and social development of the country; popular culture and democracy. The main role of the unions, in compliance with article 357 of the Labor Code, are: to improve the working conditions of their members and to defend their interests; advocate the development of relationships between employers and workers based on justice, mutual respect; and collaboration focused on the conditions proper of activities and economic development. Unions also promote education of the unionized and promote the creation of industrial schools of professionals. 

The country’s workforce concentrates in the areas of development of the main industries, primarily in services such as hotels and specific key areas in the construction of residential homes and mega projects related to highways and transport, without undermining the recently developed mining activity. During this, and the forthcoming years, Panama will need to rely on approximately 68,000 employees with technical specialties.  The logistics sector will lead the demand, as per study achieved by the Labor Market Observatory of the Ministry of Work and Labor Development (MITRADEL, in Spanish).  The estimated demand for companies with technical staff is high, whereby the areas of logistics, trade, tourism, construction, industry and agriculture, are ones with the highest growth potential and will demand more human resources for the upcoming years.  

In Panama four out of ten companies are unable to find their ideal candidates the moment they so required. The main challenges are:  the gap between skills of individuals willing to work versus skills sought by companies; as well as the unbalances in the system for developing work and life skills.  In the national corporate community, many times they find greater customer-service skills in the foreign workforce than in Panamanian personnel. Additionally, due to the extent of the technical specialty required at times, it is difficult to locate enough capacity in the local market, which leads to the hiring of foreign labor. The Panamanian human resource, mainly the youth find it difficult getting hired, for despite of being academically prepared they have deficiencies in the development of soft skills.  Concerning this last point, MITRADEL is reinforcing such, with several programs, strategies and projects through the Employment Directorate, i.e. the project termed “Learn-By-Doing”, which seeks to strengthen soft skills for life and work. 

Summary of work rate(s) (Rate since 1 July 2019)

Construction worker, Tiler, Carpenter, Booster

Cost (Local Currency )

Daily general worker* (informal unskilled labor) Hand or Helper

3.93

Daily general worker (semi-skilled workforce)

4.44

Skilled Worker

5.30

*Daily general worker - (informal unskilled work) Hand or Helper 

In Panama, there is a great variety of companies that offer stevedoring services. Most of these are in the metropolitan region due to the volume of cargo generated by main logistics assets.

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