The Average Minimum Wage in Latin America is around $400 Monthly with Marked Gaps between Countries

The minimum wage in Latin America began 2026 with a regional average of around $400 per month, with uneven adjustments, disparities between economies, fiscal pressures, and a persistent loss of purchasing power due to the rising cost of living and high levels of informal employment.  Among the countries with the highest minimum wages, Uruguay stands out with a salary that will reach approximately $620 after a total increase of 7.54% in two stages, thanks to controlled inflation and collective bargaining agreements that typically set wages above the legal minimum.  Chile, at $598, remains among the highest in the region thanks to a cycle of increases that began in 2022, although it is still far from the standards of the Organization for Economic Co-operation and Development (OECD). 

In Colombia, the 23.7% increase, which brought the minimum wage to $535 (including the transportation subsidy), was the largest in decades.  While the government of Colombian President Gustavo Petro defends the increase as a social advancement, economists warn of its potential impact on inflation, employment, and public spending in an election year.  Mexico approved a significant increase in the daily minimum wage—to $17.58 nationwide and $24.61 in the northern border region—which will benefit 8.5 million workers but also raises costs for businesses by recalculating benefits, social security contributions, and housing contributions. 

In Brazil, the minimum wage rose 6.79% to $295 per month, according to a legal formula that combines inflation and growth with spending limits.  The adjustment directly affects pensions and social benefits for about a third of the population, but remains well below the cost of the basic family food basket, estimated at around $1,290.  The most critical case is Argentina, where the minimum wage, set by decree after social dialogue failed, hovered around $228 in January.  According to a report by the Argentine Workers’ Central Union (CTA), from the beginning of Javier Milei’s administration until last November, the minimum wage experienced a 35.2% real decline in purchasing power due to adjustments that fell short of inflation, which reached 117.8% in 2024 and accumulated 27.9% between January and November 2025. 

In Peru, the minimum wage remains unchanged at US$334.50, while Paraguay maintains a minimum of US$437.42, from which the government deducts 9% to fund the Social Security Institute (IPS), leaving the real income at approximately US$392.14. The Dominican Republic is moving forward with a phased 20% increase, raising the minimum wage in large companies to US$475.  The minimum wage for small businesses will be $295, and for micro-enterprises, $270.  Costa Rica has minimum wages that hover around $600, depending on the occupation, while public sector wages have been frozen for the last five years due to a fiscal rule to contain spending. However, the government announced an increase for 2026, although it has not specified the percentage or its scope. 

In contrast, Guatemala and Honduras combine moderate increases with high levels of informality, which limit the real impact of the increases.  Last December, the Guatemalan government ordered an increase of between 4% and 7.5% to the minimum wage, depending on the type of work.  In Guatemala, around 70% of the working-age population is employed in the informal sector.  In Honduras, the minimum wage ranges from $460 to $638, depending on the number of employees in a company.  In December, Panama approved an increase of between $9.50 and $15 to the monthly minimum wage, effective January 16th. This is significant in a country where there are more than fifty different minimum wages, depending on the economic activity and the region, and which must be reviewed every two years. 

In January 2024, the increase was between 4.5% and 7%, bringing the minimum wage to approximately $341.12.  The most extreme cases remain Venezuela and Cuba. In Venezuela, the minimum wage has been frozen at around $0.40 per month since 2022, partially compensated by bonuses that do not affect employment benefits. In Cuba, the minimum wage is equivalent to about $5, with virtually no purchasing power after the failure of monetary reform. Although the minimum wage in Latin America averages around $400 per month, this figure masks profound disparities between countries and sectors.  By 2026, the debate will still focus on how to improve real income without affecting formal employment or fiscal sustainability, in economies marked by informality and a high cost of living.