In his address, Labor Minister Antonio Sanguino presented the economic model that quantifies the potential economic impact of increased workers’ income due to changes in the workday and overtime on Sundays and holidays, aspects included in the initiative.

According to Sanguino, the analysis is based on the Social Accounting matrix supported by the national accounts of the National Administrative Department of Statistics, and offers the advantage of capturing economic interactions between sectors, households, businesses, and the government.

The official commented that in a low-impact scenario, an average increase in wage earners’ income of close to three percent is expected, with an increase in employment of 91,000 persons, compared to the usual employment rate, and economic growth of 0.37 percentage.

The study also indicated that the sectors with the greatest labor force creation would be agriculture, with 19.2 percent (equivalent to 17,500 people); commerce, with 19 percent (17,300 people); entertainment and recreation services, with 12,200 jobs and an increase of 13.4 percent; and industry, with 13 percent (11, 800 people).

“There will be a redistribution of income through a wage increase, which would stimulate consumption, impacting economic growth through aggregate demand, which in turn will require the hiring of new jobs,” Sanguino stated in his presentation.

The bill, approved in October of last year by the House of Representatives, proposes significant changes to labor laws, such as establishing a maximum workday of eight hours per day and 42 hours per week. It also stipulates that overtime work may not exceed two hours per day and 12 hours per week, and a 35 percent surcharge for those who work at night.

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