Guatemala
Labour Market Profile
2014
This Labour Market Profile is a yearly updated report that provides a broad overview of the labour
market's situation and development. The report is based on the latest data available and following
trends. Each section has also accesses to the sources' links that can be used to go more in-depth on
selected themes. This is a revised version.
1
Guatemala – Labour Market Profile 2014
Executive Summary
Guatemala has suffered from the 36 year long civil war
that ended in 1996. It has an impact on the society
which has continued a prevalence of violence, low
security, and political instability. It has severely
affected the economy and the social inequality.
Guatemalan social protection system is characterized
by limited coverage and segmentation along socioeconomic lines. On average 15% of the population
have formal insurance, while health social protection
coverages 30% of the population. The government
expenditure in the latter sector is slightly decreasing.
The nation is the biggest economy in Central America.
The country is also among the Latin American's with
the highest levels of inequality. It is a multi-cultural
country and 60% of the population are different
groups of indigenous communities. Poverty rates are
much higher among the indigenous people. Some tax
reforms were enacted in 2012, to make the system
less regressive for high earners. There are many tax
breaks for high earners, firms and maquilas, which
have been targeted by campaigners as a source for
Guatemala’s inequality. This report has registered a
reduction of working poor.
The employment rate of Guatemala is on an average
in line with the Latin America and the Caribbean's
(LAC). Women have a considerable lower employment
rates than men, though. The unemployment remains
low at 2.7%, while the underemployment share is high
at 21%.
The minimum wage increased with an extra US$24 per
month on January 1, 2014, reaching a total US$323
per month. However, the minimum living cost per
month for a family of five is 4,970 quetzals (US$635).
The minimum wage in EPZ is 8% lower than the
regular national minimum wage.
The trade union movement covers over 20 trade union
centres and umbrella organisations, and is to some
extent fragmented. The trade union density has been
estimated at 3.8% of the labour force. On the other
hand, unions are under-reporting members, among
others due to procedural hurdles of public register.
Another important issue is that massive trade union
right violations are present, including killings, torture,
kidnappings, break-ins, and death threats. The legal
system is full of corruption and ineffective, which
weakens the organization of labour market and
freedom of associations. Last year Guatemala was
characterized as the most dangerous country in the
world to be trade unionist. Also the ILO's Committee
on Freedom of Association has filed a total 99
complaints and 18 cases are active.
Guatemala is a relatively industrialised country.
Around 33% of the employed work in agriculture, 46%
are in waged employment, and 72% of nonagricultural employment is informal.
The size of the informal economy is a big challenge in
Guatemala. There is a high cost of formalizing a
business, but it is decreasing notably, though. The
indigenous
communities
are
“forgotten
entrepreneurs”, disassociated from the enforcement
of the government’s regulations that are alien to their
way of doing business.
The primary school enrolment has been in a
noteworthy growth since 2000, while secondary
school enrolment is much lower than the LAC's
regional average. In terms of the vocational training,
Guatemala has a very high ratio reaching 28% to all
pupils in secondary education. Almost one out of two
of firms are offering formal training.
Guatemala's Export Processing Zones (or maquilas)
have a prominent role on the labour market. They are
notorious for their lower labour standards and antiunion stance from employers.
2
Contents
Trade Unions ......................................................................................................................................... 4
Trade Unions in Guatemala ........................................................................................................................... 5
Employers’ Organisations ....................................................................................................................... 6
Central Tripartite Structures ................................................................................................................... 6
National Labour Legislation .................................................................................................................... 7
ILO Conventions ..................................................................................................................................... 7
Trade Union Rights Violations ................................................................................................................ 9
Working Conditions.............................................................................................................................. 10
Workforce ........................................................................................................................................... 11
Unemployment and underemployment ..................................................................................................... 12
Informal Economy ....................................................................................................................................... 14
Child Labour ................................................................................................................................................. 15
Gender ......................................................................................................................................................... 15
Youth ........................................................................................................................................................... 16
Characteristics of the Working Age Population ..................................................................................... 16
Vocational training ...................................................................................................................................... 17
Social Protection .................................................................................................................................. 18
General Economic Performance ............................................................................................................ 19
Trade ................................................................................................................................................... 20
Trade agreements ....................................................................................................................................... 20
Export Processing Zones .............................................................................................................................. 21
References ........................................................................................................................................... 22
3
Trade Unions
public sector. Estimations based on umbrella
organizations membership suggest that 3.8% of the
worker force is organized in trade unions. The
calculation is to some extent underestimated due to
lack of data.
Trade unions in Guatemala
(2014)
Number of active trade unions (2013)
895
Dues (standard)
N/A
Members of trade unions (umbrella
organizations)
239,000
Trade union members share of labour force
3.8 %
Trade union members to waged workers
8.4 %
Female member share of trade unions (20072008)1
Affiliated trade unions from the informal
economy
30 %
13,024
Number of CBAs (2010)
80
Workers covered by CBAs
N/A
Share of workers covered by CBA
N/A
Labour force (2013)
One of the major reasons why few are organised in
trade unions in Guatemala is because abuses that have
been committed against trade union members and
leaders over the past half-century. Military and civilian
governments since the 1950s have held union
organizations in contempt and have committed
serious human rights abuses and "disappearances"
against union leaders. After the civil war ended in
1996 and civilian rule was established, trade unions
5
started reorganising. However, a hostile attitude
towards labor organizations continues today, though,
and acts as a significant obstacle to trade union
6
mobilization.
6,241,000
The Labour Law provides for the right of workers, with
the exception of security force members, to form and
join trade unions of their choice, conduct legal strikes,
and bargain collectively. According to the U.S. Report
of Human Rights Practices, the law places some
restrictions on these rights. For instance, legal
recognition of a new industry-wide union requires that
the membership constitute a 50-percent-plus-one
majority of the workers in an industry and restricts
2
union leadership to citizens.
According to a recent survey, only 1% of day labours in
the agricultural sector are organized in trade unions.
And 84% indicate that if they try to organize them in
7
trade union they are fired immediately.
Often trade unions also underreport their membership
number, so as to protect their members from
employer reprisals or worse. Many trade unionists are
also murdered in Guatemala, which in itself also
deters trade unions.
It was also registered that procedural hurdles, union
formation restrictions, and impunity for employers
refusing to receive or ignoring court orders limited
freedom of association and collective bargaining are
present. Worker organizations are independent of the
government and political parties. The International
Trade Union Confederation’s (ITUC) annual report
noted numerous and arbitrary obstacles for union
3
registration.
Guatemala has a fragmented trade union movement
with over 10 trade union centres and umbrella
organisations, which also affiliates trade union
centres, political and agrarian movements. Three of
the centres CGTG, CUSG and UNSITRAGUA, are
affiliated to ITUC.
(CUSG) United Confederation of Trade Unions
It is noteworthy that a factory or business owner is not
obligated to negotiate a collective bargaining
agreement unless at least 25% of workers in that
factory or business are union members and request
negotiations.
The
law
prohibits
antiunion
discrimination and employer interference in union
activities and requires employers to reinstate workers
dismissed illegally for union-organizing.
8
CUSG was established in 1983 as the first regrouping
of trade unions. It has 89 affiliated trade unions and
four trade union federations.
(CGTG) General
9
Guatemala
Workers
Confederation
of
CGTG was established in 1987 by surviving members
and leaders of CNT. Its mission is to empower workers
to socially organize in their organizations, to educate
and train workers in all sectors of Guatemalan society.
According to official statistics there are 2,248 trade
4
unions. Many are inactive. Around 895 appear to be
active in 2013, and three out of four are from the
4
Trade Unions in Guatemala
10
Members, Dues, Collective Bargaining Agreements (CBA) and Occupational Safety and Health committees
Dues
Number
of CBAs
Workers
covered
by CBAs
Number of
OSH committees at
workplaces
-
-
-
-
-
-
-
-
-
-
-
86,000
-
-
-
-
-
-
-
-
-
-
-
100,479
-
-
-
-
-
MSPAG
60,000
-
-
-
-
-
MSPAG
30,000
-
-
-
-
-
MSPAG
10,479
-
-
-
-
-
-
-
-
-
-
Total
Members
(2012)
Female
Members
UGT Unión Guatemalteca de Trabajadores
51,984
UASP Unidad de Acción Sindical y Popular
Trade Union /
Trade Union Centre
National
affiliation
Umbrella organisations
FNL Frente Nacional de Lucha (National
Struggle Front)
MSICG Movimiento Sindical, Indígena y
Campesino Guatemalteco (rural and
indigenous)
MSPAG Movimiento Sindical y Popular
Autónomo Guatemalteco
Trade union centres
CGTG Central General de Trabajadores de
Guatemala
CUSG Confederación de Unidad Sindical de
Guatemala
UNSITRAGUA Unión Sindical de
Trabajadores de Guatemala
CNSP Coordinadora Nacional Sindical
Popular
CTC Central de Trabajadores del Campo
(Agricultural Workers Trade union)
UGT
40,000
-
-
-
-
-
UGT
2,500
-
-
-
-
-
UGT
4,000
-
-
-
-
-
FNL
14,000
-
-
-
-
-
UGT, FNL
4,800
-
-
-
-
-
UGT
684
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
CUSG
-
-
-
-
-
-
CUSG
-
-
-
-
-
-
CUSG
-
-
-
-
-
-
CUSG
-
-
-
-
-
-
Trade union federations
FESEBS Federación Sindical de Empleados
Bancarios y Servicios (Trade union
Federation of Banking and Service
Workers)
FESTRAS Federación Sindical de
Trabajadores de la Alimentación,
Agroindustrias y Similares (Trade union
Federation of Food, Agroindustry and
Related Industry Workers)
SNTSG Sindicato Nacional de Trabajadores
de la Salud de Guatemala (National Trade
union of Health Workers in Guatemala)
STEG Sindicato de Trabajadores de
Educación de Guatemala (Guatemalan
Trade union of Education Workers)
USTAC Unión Sindical de Trabajadores de
la Aeronáutica Civil (Civil Aviation Workers
Trade union)
FESOC Federación Sindical Obrero
Campesina (Agricultiral Workers)
FENASTEG Federación Nacional de
Trabajadores del Estado de Guatemala
(State Workers)
FENSIGUA Federación Nacional Sindical de
Guatemala
FENASTRA Federación Nacional Sindical de
Trabajadores
FUSSIG Federación de Unidad Sindical del
Sector Informal de Guatemala (Informal
Sector)
FEGSTRAM Federación Guatemalteca
Sindical de Trabajadores Municipales
(Municipality Employees)
5
FENASSEP Federación Naciaonal de
Sindicatos de Empleados Públicos (public
workers)
FETRACUR Federación de Trabajadores
Campesinos y Urbanos
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Employers’ Organisations
Chamber of Industry of Guatemala (AGG)
Comité Coordinador de Asociaciones Agrícolas,
Comerciales, Industriales y Financieras (CACIF)
CACIF was established in 1957 and were historically
supporting the governments during the civil war.
CACIF is governed by a General Assembly and run by a
Board of Directors and an Executive Director. CACIF
maintains committees within Workforce, Tax,
Economic, Security, Communications, International
12
Trade Negotiations, Environment and Policy.
AGG is an apolitical, not-for-profit, non-union
association with voluntary membership operating in
Guatemala since 1959. Its key objective is supporting
management refinement for leaders responsible for
directing the private and the public sector. During its
40 year operation, it has trained more than 200,000
businesspeople in a wide array of management
development fields. As of today, AGG has 2,000
members from major Central American companies,
making it the major voluntary non-union association in
11
the region.
CACIF is constituted by ten organisations, representing
around 100,000 employers, of which 75% are small
and medium sized enterprises. CACIF also participates
in debates, which are not strictly labour related, such
13
as the trial for genocide of Ríos Montt. During 2013,
CACIF transmitted to the government three
observations to the ILO Constitution’s Article 22.
Central Tripartite Structures
Mediation and Arbitration
Economic and Social Council (ESC)
14
Labour disputes are governed by the labour law: First
a dispute is attempted to be solved under direct
settlement between employers and workers. Then the
case may be referred to a Court of Conciliation, which
makes a conciliation offer. If that is rejected, the case
may be referred to arbitration by the Court of
Arbitration, if the parties agree. These courts are
presided by a judge from the Ministry of Labour and
Social Affairs, and one each representing workers and
employers.
National Wage Commission
16
ESC was amended by law in 2012 to maintain an
institution of permanent social dialogue of national
economic and social policies; ii) sectoral opinions are
converted into public policies of economic and social
areas; iii) these policies are part of a national
development strategy; and iv) international
development policies follow these public policies.
Other bi/tripartite organs


15
As required by the constitution, the minimum wage is
reviewed periodically by the tripartite National Wage
Commission (Comisión Nacional de Salario).



6
Monetary Board of the Bank of Guatemala
National Institute of Technical Training (Instituto
Nacional Técnico de Capacitación y Productividad
– INTECAP)
Board of Guatemalan Social Security Institute
(Junta Directiva del Instituto Guatemalteco de
Seguridad Social
Tripartite Commission on Labor Affairs
Tripartite Commission on International Labor
Affairs
National Labour Legislation
Constitution
17
Código del Trabajo
The constitution from 1985 was last modified in 2005.
It establishes the right to work and minimum social
rights in labour legislation, which may not be made
lower through collective bargaining, and if there is
doubt of interpretation of these rights, labour is to be
favoured. These include rights such as equal pay for
equal work, a periodically reviewed minimum wage,
working time maximum of 8 hours per day 48 hours
per week, 15 days of annual leave and maternity
leave. The constitution prohibits non-citizens from
participating in the leadership of unions, and
employment of children less than 14 years. It also
recognises freedom of association and the right to
strike though with restrictions for workers of the state.
18
The labour code regulates employment contracts,
collective bargaining agreements, wages, leave,
specific types of work, occupational safety and health,
trade unions, strikes and industrial disputes. It also
establishes the labour inspectorate, the responsibility
of the Ministry of Labour and Social Affairs, the Labour
and Social Courts including courts of conciliation and
arbitration.
The labour code is the most important labour
legislation. Several other legislations exist, which
regulates and sets standards and restrictions for the
19
labour market.
ILO Conventions
Ratified ILO Conventions20
Convention
Ratification
date
C087 - Freedom of Association and Protection of the Right to Organise, 1948
C098 - Right to Organise and Collective Bargaining Convention, 1949
C029 - Forced Labour Convention, 1930
C105 - Abolition of Forced Labour Convention, 1957
C138 - Minimum Age Convention, 1973
C182 - Worst Forms of Child Labour Convention, 1999
C100 - Equal Remuneration Convention, 1951
C111 - Discrimination (Employment and Occupation) Convention, 1958
1952
1952
1989
1959
1990
2001
1961
1960
C081 - Labour Inspection Convention, 1947
C129 - Labour Inspection (Agriculture) Convention, 1969
C122 - Employment Policy Convention, 1964
C144 - Tripartite Consultation (International Labour Standards) Convention, 1976
1952
1994
1988
1989
Working time
C014 - Weekly Rest (Industry) Convention, 1921
C106 - Weekly Rest (Commerce and Offices) Convention, 1957
1988
1959
Elimination of child labour and
protection of children and
young persons
C077 - Medical Examination of Young Persons (Industry) Convention, 1946
1952
C078 - Medical Examination of Young Persons (Non-Industrial Occupations)
Convention, 1946
C124 - Medical Examination of Young Persons (Underground Work) Convention,
1952
Subject and/or right
Fundamental Conventions
Freedom of association and
collective bargaining
Elimination of all forms of
forced labour
Effective abolition of child
labour
Elimination of discrimination
in employment
Governance Conventions
Labour inspection
Employment policy
Tripartism
Up-to-date Conventions
7
1989
1965
Wages
C094 - Labour Clauses (Public Contracts) Convention, 1949
1952
C095 - Protection of Wages Convention, 1949
1952
C131 - Minimum Wage Fixing Convention, 1970
1988
Migrant workers
C097 - Migration for Employment Convention (Revised), 1949
1952
Specific categories of workers
C110 - Plantations Convention, 1958
1961
C149 - Nursing Personnel Convention, 1977
1995
Social security
C118 - Equality of Treatment (Social Security) Convention, 1962
1963
Occupational Safety and
Health
C120 - Hygiene (Commerce and Offices) Convention, 1964
1975
C148 - Working Environment (Air Pollution, Noise and Vibration) Convention,
1977
C161 - Occupational Health Services Convention, 1985
1996
C162 - Asbestos Convention, 1986
1989
C167 - Safety and Health in Construction Convention, 1988
1991
Freedom of association
(agriculture)
Industrial relations
C141 - Rural Workers' Organisations Convention, 1975
1989
C154 - Collective Bargaining Convention, 1981
1996
Equality of opportunity
C156 - Workers with Family Responsibilities Convention, 1981
1994
Employment policy
C159 - Vocational Rehabilitation and Employment (Disabled Persons) Convention,
1983
C160 - Labour Statistics Convention, 1985
1994
C163 - Seafarers' Welfare Convention, 1987
2008
C169 - Indigenous and Tribal Peoples Convention, 1989
1996
Labour administration and
inspection
Seafarers
Indigenous and tribal peoples
1989
1993
Fundamental Conventions are the eight most important ILO conventions that cover four fundamental principles and rights at work. Equivalent to
basic human rights at work.
Governance Conventions are four conventions that the ILO has designated as important to building national institutions and capacities that serve to
promote employment. In other words, conventions that promotes a well-regulated and well-functioning labour market.
In addition, there are 71 conventions, which ILO considers “up-to-date" and actively promotes.
8
Trade Union Rights Violations
25
The International Trade Union Confederation (ITUC)
has classified Guatemala as the most dangerous
21
country in the world to be a trade unionist. Since
2007, at least 64 union leaders and members have
been killed. There have been registered many acts of
attempted murder, torture, kidnappings, break-ins,
and death threats with relation to the freedom of
association.
labour laws. Workers are not only risky to participate
in labour union activities, but covered by failing
remedy to protect them. Each year around 13,000
cases are filed, with over 5,000 cases for unlawful
dismissal. Around 22 judges handle these cases and
have a huge backlog of more than 23,000 not
rendered sentenced. It is estimated that the impunity
rate is 98% and with no prosecutions or effective
26
convictions.
22
Both ITUC and the U.S. report on Human Rights
23
Practices have listed a wide range of trade union
rights violations in the period 2013-2014 (November):
Also in the prohibition of forced or compulsory labour,
reports inform that men and women have been
subject to forced labour in agriculture and domestic
services, and the government has failed to enforce the
laws effectively in some cases. Also an estimated
39,000 children, primarily indigenous girls, working as
domestic servants have often been vulnerable to
27
physical and sexual abuse.
The government’s investigations of the above
mentions crimes have been seriously questioned, e.g.
prosecutors have unilaterally determined that crimes
were unrelated to union activities. Among others
during the last 25 years, the International Labour
Organization (ILO) and many other international
organisations have reiterated its deep concern about
the grave situation of antiunion violence and the right
to freedom of association. And, the violence has not
been solved, but actually worsened.
Just a few examples, employers frequently abuse the
appeals process, with the acquiescence of the courts,
applying baseless procedural motions to draw cases
out for years. In cases where workers get a final
judgement, they are rarely enforced and/or ignored by
companies. Or when coffee workers from the
UNSITRAGUA demanded to receive the minimum
wage, which is guaranteed by law, was dragged on for
12 years and they ended up being fired. In addition, in
several municipalities workers experienced to be fired
due to their relation with trade union membership.
The ILO's Committee on Freedom of Association has
filed a total 99 complaints, and 18 cases are active.
Although these international complaints keep a
pressure on the government, the results have so far
not produced results. Though, the government
launched an ILO Decent Work Country Program in
2012 program, and an agreement with the ITUC in
2013, which aim to support investigations and
prosecuting crimes against trade unionists. It is too
early to estimate the results.
Among the labor law, violations common to maquilas
are forced overtime, employment of children as young
as 13 years old, and bathrooms that remain locked for
28
most of the workday.
24
ILO Complaints Procedure
Freedom of Association cases (2014)
Active
Follow-up
18
6
Closed
75
While the labour law in principle protects the right of
29
workers, it has restrictions. Among others, to start a
new industrywide union requires that the membership
constitute a 50-percent-plus-one majority of the
workers in an industry and restricts union leadership
to citizens. To negotiate a collective bargaining
agreement, the employer is not obligated unless at
least 25% of the workers of the business are union
members and request negotiations.
During 2013, trade unions transmitted to the
government sixteen observations to the ILO
Constitution’s Article 22, including two from the ITUC.
The ILO deferred the decision on the appointment of a
Commission of Inquiry to November 2014 to establish
a Commission of Inquiry.
Labour inspectors have not demonstrated effective
action to gain access to worksites, among others to
investigate worker complaints.
A huge challenge is that the legal system is corruption,
and labour courts are incapable of guaranteeing the
9
Working Conditions
It has been estimated that 58% of the population have
incomes below the extreme poverty line, which is
defined as the amount needed to purchase a basic
basket of food.
Wages and earnings
Monthly average, median and legal minimum wages
Source
Current
Quetzal
Current
US$
Average wage
Global Wage
1,967
253
(2011)
Database30
Minimum wage
Ministerio de
2,530
323
(2014)
Trabajo31
Minimum wage for a
19-year old worker or
2,701
345
an apprentice (2014)
Doing
Ratio of minimum
Business32
wage to average
0.73
value added per
worker (2014)
Wage Share
Unadjusted
31 %
(2009)
Global Wage
Database33
Growth of real
minimum wage
8.2 %
(2000-2011)
Growth of real
average wage
ECLAC34
-6%
(2002-2012)
Ratio of minimum wage to value added per worker denotes the
minimum wage share of labour productivity. Reported as ratio of
minimum wage to value added per worker in the Doing Business
Report.35
The Wage Share is the share of GDP that goes to wages and other
forms of labour compensation. It is not adjusted for the selfemployed, and can therefore underestimate the amount of GDP
that goes to workers, if there are many self-employed in the
economy.36
The public sector wage was 58% higher than the
national average, and the private sector were 8%
lower. The wages of the non-indigenous adults and
men is slightly above the average, but indigenous
people, youth and women, on average, earn 23% less
than national average. In all domains, the indigenous
38
are lower wage earners.
The Ministry of Labour registered 6,226 complaints of
violations during 2012 and investigated 539 cases. The
labour inspectors uncovering numerous instances of
overtime abuses, but effective enforcement was
undermined due to inadequate fines by labour courts,
labour court inefficiencies, employer refusals to
permit labour inspectors to enter facilities or provide
access to payroll records and other documentation,
and inspectors’ lack of effective follow-up in the face
39
of such refusals.
The ministry of labour employed 330 labour
inspectors, although many of them performed
conciliation or administrative duties rather than
clearly defined inspection duties. These 330 labour
inspectors is 1 per 18,400 workers in the labour force.
The ILO recommends 1 inspector per 40,000 workers
in less developed countries and 1 per 20,000 workers
40
in transition economies. Thus, Guatemala has a
relatively high rate of labour inspectors.
The monthly minimum wage is revised yearly and was
increased on January 1, 2014, to 2,530 Quetzal
(US$323) per month for agricultural and nonagricultural work, which is an increase on 7% since
2013. Over the last decade, the minimum wage has
increased slightly on 8% in real terms. However, the
minimum wage in the export maquila sector is 8%
lower than the general minimum wage.
Noncompliance with minimum wage provisions in the
agriculture and informal sector was widespread.
Occupational safety and Health standards were
inadequately enforced.
The average wage is lower than the minimum wage,
though. Currently the average wage is US$70 per
month less than the minimum wage. Moreover, the
real average wage has fallen on 6% over the period
2002-2012.
Some advocacy groups have estimated that more than
half of the workers in rural areas, who are engaged in
daylong employment, are not receiving the wages,
benefits, and social security allocations required by
law. In addition, estimates suggest that between 65
and 86 percent of the workforce work within the
informal sector and outside the basic protections
41
afforded by law.
The National Statistics Institute estimates that the
minimal living cost per month for a family of five was
37
4,970 quetzal (US$635) in March 2013. Those costs
are close to 50% higher than a single minimum wage.
10
Workforce
42
Employment rates
(2012), Age and Sex distribution
Sex
Male &
female
Male
Female
Employment
rate
Age
Total
Youth
Adult
Total
Youth
Adult
Total
Youth
Adult
15+
15-24
25+
15+
15-24
25+
15+
15-24
25+
65 %
57 %
70 %
85 %
75 %
91 %
47 %
40 %
51 %
25+
70%
51%
15-24
57%
40%
15+
91%
75%
65%
47%
0%
10%
20%
30%
40%
50%
Male and female
Guatemala has a population of 14.7 million out of
which 6.2 million are in the labour force. The
indigenous culture of mayans is making up an
estimated 51% of the population. Females have
considerably lower employment rates than men, but
the overall employment rate of Guatemala is average
for the region.
85%
60%
Female
70%
80%
90%
100%
Male
moderate poor with less than US$2 a day have
demonstrated significant decline. They stay twice as
high than the Latin America and the Caribbean
region's averages, though.
Working Poor
Age 15+
43
Share of workers
in total employment
Guatemala's 'developing middle class' is experiencing
an expansion. This segment increased 23% from 2002
to 2006, reaching 2.3 million workers living for US$420 a day. Also the 'near poor' segment, who lives
between US$2-4 a day, has also experienced a slight
expansion on 8%, reaching 1.1 million workers in 2006,
which equals 23% of the total employment. In the
Latin America and the Caribbean region, 19% lives for
US$2-4 a day and 57% for US$4-20 a day. Thus,
despite the expansion of Guatemala's middle class, it
is still lower than the regional average.
Guatemala (2002)
Guatemala (2006)
Latin America and the
Caribbean (2006)
Latin America and the
Caribbean (2013)
1.25 US$
a day
17 %
8%
2 US$
a day
28 %
16 %
4.8 %
10 %
2.9 %
6.5 %
Working poor measures employed people living for less than
US$1.25 (extreme poverty) and US$2 (moderate poverty) a
day, as proportion of total employment in that group.
The latest data on working poverty is from 2006. Both
extreme poor living with less than US$1.25 a day and
11
Unemployment and underemployment
Unemployment & underemployment
Unemployment rate
Youth (15-24)
unemployment rate
Underemployment
share of employment
Part-time workers
share of employment
Year
Total
Male
Female
2013
2.8 %
2.0 %
4.0 %
2013
4.8 %
3.0 %
8.0 %
2004
21 %
20 %
22 %
2003
20 %
9.5 %
38 %
Unemployment trends in Guatemala, 1992-2013 (%)
6
6
5
5
4
3
2
1
4
4
3
2
2
2
2
are underemployed. Indicate those who involuntary
work less than they desire out of total employment,
and 20% mostly women, are part-time workers,
voluntary or not.
44
Based on these trends of underemployment and
unemployment have been characterized as 'serious'
problems. The structural changes that took place in
the 1990s resulted in most indigenous and other small
farmers having their properties expropriated in favour
of large agricultural businesses, especially sugar and
coffee. It explains why a large number of people are
working as seasonal workers in a relatively
46
unregulated labour market.
45
6
5
5
5
5
5
5
Moreover, Guatemala is a poorer country where few
can afford to be unemployed. Interpretation of the
open unemployment and employment rates as
indicators of a well-functioning labour market, is
problematic in developing countries. When
unemployment is not an option where a person can
survive, work of some sort has to be found, often
casual and informal work. Unemployment should
therefore be understood in relation to the strength of
social safety nets, the prevalence of informal
employment, and how much of informal employment
is underemployment due to few employment
47
possibilities in the formal sector.
4
3
2
2
3
3
2
2
1
3
2
2
3
2
3
3
3
3
2
0
1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2013
Unemployment rate (%)
Youth unemployment rate (%)
Ratio of youth unemployment rate to adult unemployment rate
Compared to Latin America and the Caribbean’s region
unemployment rate at 6.6%, the unemployment rate
is lower in Guatemala. The unemployment rate in
Guatemala increased in 2008, which is probably due to
the global financial recession and the fall in growth. It
has decreased again and reached 2.7% in 2013. The
youth unemployment has a higher rate and slightly
more present among men than women.
Guatemala is a relatively industrialised country.
Around 33% of the employed work in agriculture, 46%
are in waged employment, and 72% of non48
agricultural employment is informal.
A lot of unemployment is concealed as
underemployment, since over 20% of the employed
12
Sectoral employment
49
Employment (2004) & GDP share (2012)
Sector & Gender distribution
Sector
Mining and quarrying
Manufacturing
Electricity, gas and water
Construction
Trade, hotels and
restaurants
Transport, storage and
communications
Financing, insurance, real
estate and business services
Community, social and
personal services
Others
Agriculture
50
Male
employment
Female
employment
GDP share
per sector
8,100
1,200
0.6 %
322,987
335,480
17.9 %
7,158
449
2.8 %
259,717
5,439
2.8 %
510,336
600,185
11.6 %
121,474
12,104
10.6 %
81,130
35,619
14.9 %
244,441
437,009
23.9 %
N/A
N/A
3.0 %
1,593,864
257,279
13.6 %
0%
10%
0
500,000
Female
Male
21%
31%
1,000,000
GDP share by Sector
1,500,000
The share of employment within the three major
sectors, i.e. agriculture, industry and services, has
51
been steady in the last decade.
couple of other sectors are also male dominated such
as construction, mining and transport, but these
sectors have relatively few employed in Guatemala.
Many Guatemalans are frecuently not working under
desirable conditions, e.g. in Guatemala's agricultural
and industrial sectors often fail to meet the
government's specified requirements. For example,
more than 80,000 Guatemalans work often at
maquilas in unsafe and unhealthy conditions.
Data from 2008 indicate that the lowest earnings are
found in agriculture (GTQ 1,551 per month), and the
highest earnings are found in mining and electricity,
53
GTQ 4,843 and GTQ 5,327 per month, respectively.
Currently, the Information Technology and Business
Process Outsourcing Sectors provides more than
18,800 jobs in customer service in 70 companies, 20 of
which export services to the USA, Spain, and Central
America. This sector generated more than 3,000 new
jobs in 2013, and the sector generating more than
54
US$326 million in service export revenue.
The single largest sector employer is the agricultural
sector, where 38% of the employed found work in
2004, and mentioned previously it appears to by
similar today. Agricultural employment is frequently
seasonal and occurs at off-site locations, with a high
presence of indigenous mayas, and housing facilities
are generally poor. At some cotton plantations, the
housing provided for workers consists of bare wooden
constructions without bedding or furniture. Recent
studies show that 70% of the lobour force in this
sector work between 9 to 12 hours per day and do not
receive pay for the extra hours or a salary according
the law. In addition, the workers have unstable work
conditions and have only verbal contracts and only 4%
52
work permanent.
Sectors Share of GDP (%)
60
55
56
56
56
56
57
58
58
58
59
59
59
59
29
29
29
30
29
30
30
30
29
29
29
29
15
15
14
14
13
12
12
12
12
12
12
12
50
40
30
20
10
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Women who are employed tend to work outside
agriculture, which is a male dominated commerce. A
Agriculture, value added (% of GDP)
Services, etc., value added (% of GDP)
13
Industry, value added (% of GDP)
Migration
Migration
56
Net migration
(2008-2012)
Net migration to
average population
per year (2008-2012)
Personal transfers
i.e. remittances
received, % of GDP
(2012)
Guatemala
- 75,000
Guatemala
- 1 : 957
Inhabitants
Latin America &
the Caribbean
- 1 : 956
Inhabitants
Guatemala
10 %
Latin America &
the Caribbean
1.1 %
The migration out of Guatemala has decreased
significantly, from one out of every 343 inhabitant in
2006-2010 to 957 in the period 2009-2013. The
country is now in par with the Latin American and
Caribbean
region's
average
net
migration.
Notwithstanding, the latter has a high migration rate
compared to the rest of the world.
Guatemalan migrants tend to go north, with the top
three destinations being the United States, Mexico
58
and Belize. There are an estimated 2 million
Guatemalans in the United States.
Net migration is the net total of migrants during the period, that
is, the total number of immigrants less the annual number of
emigrants, including both citizens and noncitizens. Data is fiveyear estimation.
Guatemala is also a transition country for migrants
who have the U.S. as destination. It is also increasingly
a destination country from especially Honduras and
Nicaragua due to demand for unskilled labour, lack of
employment opportunities in the origin countries and
59
a tougher U.S. immigration policy.
With a remittance rate of 10% to GDP, Guatemala
receives much more remittance than the Latin
American average. The country covers 9% of the total
remittance received in Latin America and one of the
57
top remittance receiving countries in the world.
Informal Economy
vendors, taxi drivers, etc.), whereas UNSITRAGUA
organises informal rural workers with an emphasis on
64
the Mexican border.
Employment in the informal economy
Employment in the
informal sector in
non-agricultural
employment
Guatemala (2012)
61
LAC (2012)
60
75 %
The size of the informal economy is a big challenge in
Guatemala. One of the issues is the high cost of
formalizing a business. It is decreasing notably,
though, but it is still higher than the regional average,
i.e. a cost of starting a business is 46% vs. 36% of
65
income per capita, respectively. In addition, many
informal entrepreneurs have mentioned that there is
no real incentive for them to formalize their activities.
They prefer operating in a system that is based on
mutual trust and punishment for those that do not
66
comply.
48 %
The latest data on the employment in the informal
economy in non-agricultural employment has
increased 3% since 2002, reaching at 75% in 2012. It is
much higher than the average in the Latin America
and the Caribbean region, which has decreased 2% in
the period 2009 to 2011, reached 48%.
Another indication is the type of employment: Two
types of employment which are often informal are
own-account workers who make up 32% of the
employed and contributing family workers who make
62
up 18%. There are 46% waged workers. The number
of own account workers are in the higher end for Latin
63
America and the Caribbean.
The informal economy is different in indigenous
groups that are concentrated in rural areas. Previous it
has been focused as an urban phenomenon. Research
has shown that the indigenous communities in
Guatemala are the “forgotten entrepreneurs”,
disassociated from the government that wants to
enforce regulations that are alien to their way of doing
67
business.
CUSG and UNSITRAGUA, organises informal sector
workers through affiliated organisations. In CUSG
these are in self-employed in the service sector (street
14
Child Labour
Guatemala has made some progress in efforts to
eliminate the worst forms of child labor. According to
the recent national survey shows that the child labour
trend decreased on 8% since 2000. Out of 4.2 million
population between 7-17 years old, 851,000 are in
employment, which equals 20%, and two out of three
are boys. The majority (64%) comes from the age
segment between 14-17 years old; a segment where a
little more than half work in dangerous conditions.
Also more than 300,000 children in the age group 7-13
years are working under the minimum age and out of
68
this group 21% have dangerous work.
Working children
Proportion of all children in age group
Region
Guatemala
(2011)70
Latin America and
the Caribbean71
(2008)
Age
7-17
7-17
14-17
5-17
Type
Children in
employment
Child Labour
Hazardous work
Children in
employment
Child labourers
Hazardous work
Proportion
20.3 %
14.5 %
55.4 %
13.3 %
10 %
6.7 %
Children in employment includes all children who conduct some
kind of work, whereas child labourers is a narrower term
without mild forms of work. Hazardous work is the worst from
of child labour as defined in ILO C182.
The Government is in a process of updating the
national strategy to combat child labor. Among others,
the Ministry of Labor increased the number of
inspectors dedicated exclusively to child labor issues
and increased the number of inspections and legal
proceedings against employers for child labor
violations. It has been observed that some provisions
in the Labor Code allow exceptions to the minimum
age for work that are inconsistent with international
69
standards.
The decrease of the proportion of children in
employment was driven mainly by the decrease of the
share of children in employment only. Indeed, the
proportion of children in employment but not in
school, the group whose development prospects are
most compromised, fell steadily over the 2000-2006,
72
from eight percent to five percent.
Gender
Gender-based discrimination remains a powerful force
in the country and within institutions. Women still do
not participate widely in decision-making processes,
73
and have limited economic opportunities These
aspects has been a hindrance for increasing women’s
participation in decision-making. Moreover, the
poverty situation within the women is overwhelming
among the indigenous population.
positions. They often find their employment in lowwage jobs in agriculture, retail businesses, the service
sector, the textile and other industries, and the
government. The employment is frequently in the
informal sector, where pay and benefits generally are
lower. Also a report estimates that earned income of
women is 44% that of men as well as women on
average received 57 percent of men’s salaries for
74
comparable work.
The Gender Inequality Index (GII) reflects genderbased inequalities in three dimensions – reproductive
health, empowerment, and economic activity.
Guatemala has a GII value of 0.539, ranking it 114 out
of 148 countries in the 2012 index, and the lowest rate
in the Central America.
Violence against women is a chronic problem in
Guatemala and perpetrators rarely face trial.
According to Guatemala’s human rights prosecutor’s
office, rapes and sexual assaults of women increased
by 34 percent from 2008 to 2011, while in 9 of every
10 of these cases, those responsible are not
75
punished.
Women frequently face discrimination, including in
labor law, and are less likely to hold management
15
Youth
Yearly, 200,000 youth enters the labour market, but
only 20,000 finds decent work. Thus, most are
entering the informal sector or immigrate to other
northern countries. Some of the weaknesses for the
youth on the labour market are especially related to
the high level of illiteracy, especially among women
and indigenous; relatively early drop out in primary
and secondary education levels, which indicate the
low secondary school coverage; and insufficient
learning.
The Government launched a new policy on youth
covering the period 2012-2020 as a tool to support
their development. The country population has a large
youth segment; out of the total 14.4 million citizens,
the youth between 13-29 years cover 4.9 million
persons (33%) and of these 40% are indigenous
76
groups.
The youth unemployment rate in 2012 was 7.8% and
covers more than half of the unemployed workers in
77
the labour force.
Characteristics of the Working Age Population
Highest level attained and years of schooling in the population
(2010), Population 25+, Total and Female
Highest Level Attained
Total
Female
No Schooling
Primary
33.1 %
32.4 %
16.4 %
5.5 %
9.7 %
0.7 %
2.2 %
39.5 %
30.2 %
14.7 %
4.3 %
9.2 %
0.5 %
1.6 %
4.1 years
3.6 years
0.54
0.58
Secondary
Tertiary
Begun
Completed
Begun
Completed
Begun
Completed
Average year of total schooling
Educational Gini Coefficient
78
Total
Female
0%
20%
No Schooling
Secondary - Begun
Tertiary - Completed
40%
60%
Primary - Begun
Secondary - Completed
80%
100%
Primary - Completed
Tertiary - Begun
Primary, secondary and tertiary is the internationally defined distinction of education. In Denmark these corresponds to grundskole, gymnasium &
university.
The educational Gini Coefficient is similar to the Gini Coefficient, but instead of measuring the distribution of income in a population, it measures
the distribution of education measured as years of schooling among the population. 79
Guatemala has a low level of education considering
the relative higher GDP for a Central American
country, and that the agricultural sector is not the
dominant sector. In particular, many have no
schooling, and less than 40% have completed primary
school. Much can be attributed to the civil war’s
disruption of education systems.
non-indigenous have 6.3 years of schooling.
Attendance and test scores are also lower among the
80
indigenous children.
Though women have lower levels of education, the
gender difference is rather small.
The graph above shows the educational attainment of
all Guatemalans above 25 years, therefore gives a
glance of the human capital of the labour force.
The indigenous population are considerably less
educated. Indigenous population between 15 and 31
have an average of 3.5 years of schooling, whereas the
16
81
Enrolment in Primary, Secondary and Tertiary schools (2000-2010)
Total and Female, Guatemala and Latin America & Caribbean
Net primary school enrolment
Net secondary school enrolment
100%
80%
70%
95%
Guatemala ,
Female
enrolment
60%
90%
50%
85%
40%
LAC , Total
enrolment
30%
80%
Guatemala ,
Total enrolment
20%
10%
75%
LAC , Female
enrolment
0%
70%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Net enrolment is the ratio of children of official school age, who are enrolled in school to the population of the corresponding official school age.
Gross enrolment is the ratio of total enrolment, regardless of age, to the population of the corresponding official school age. Gross primary
enrolment is therefore sometimes higher than 100%.
The enrolment into Guatemala’s primary schools has
strongly increased during the last decade and is now
higher than the regional average. The gender gap in
primary school enrolment has also narrowed.
Secondary school enrolment is still much lower than
the regional average. The enrolment rate for tertiary
education was 17.8% in 2007, considerably below the
82
regional average at 35.5%.
Vocational training
Vocational Training
83
Pupils in vocational training
(2011)
Ratio of pupils in vocational
student to all pupils in
secondary education
(Average 2007-2011)
Ratio of pupils in
vocational training out of
15-24 year olds
(Average 2007-2011)
Guatemala
Guatemala
and might be because more young have vocational
training.
312,557
According the World Bank’s estimation, around 44% of
85
firms are offering formal training.
28 %
Latin America
& Caribbean
9.5 %
Guatemala
12 %
Latin America
& Caribbean
5.2 %
Ratio of pupils in vocational student to all pupils in
86
secondary education, 2000-2012 (%)
35%
30%
25%
Guatemala does have a much higher share of students
in vocational training out of students in secondary
education. Compared to the population of 15-24 year
olds, Guatemala has almost twice as many vocational
students. The number of vocational students has
almost doubled from 156,000 in 2001 to almost
84
313,000 in 2011 and 51% are females.
20%
15%
10%
5%
0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Guatemala
The youth unemployment rate in Guatemala is
medium compared to the overall unemployment rate,
17
Latin America & Caribbean
Social Protection
urban non-poor. Financed by contributions from
workers, employers and the state, IGSS provides
pensions for the elderly, disabled and survivors; and
cash benefits and health services in case of illness,
maternity and accidents. Health services cover insured
workers, their pregnant female spouses during
pregnancy and affiliated persons’ children below the
age of seven.
Public spending on social protection schemes87
(2011)
Public social protection
expenditure, excl. health
12 billion
US$
1.5 billion
% of GDP
3.1 %
per capita
102 US$
% of government
expenditure
31 %
% of GDP
1.3 %
% of population
30 %
% changes per
year (2007-2011)
-0.4 %
Public health care
Health social protection
coverage (2010)
Trends in government
expenditure in health
Quetzal
In addition to IGSS, there are two other public
obligatory social security schemes: one for civil
servants (Clases Pasivas Civiles del Estado (CPCE)),
established in 1923, and another for the military
(Instituto de Previsión Militar (IPM)), established in
1966. In addition, smaller schemes cater for the
workers of public enterprises, banks, municipal
organisations and other public organs, the members of
which are also covered by IGSS, thus enjoying double
protection.
Benefits, coverage and contributions to pension
88
schemes (2009)
Social benefits for the active age
% of GDP
Share of contributing to a
pension scheme
Pensionable (60+) age receiving
an old age pension (2006)
Active contributors to an old age
pension scheme (2010)
% of economically
active population
Proportion of
elderly
15-64 years
1.7 %
20 %
14 %
Guatemala initiated the non-contributory programme
“Mi Familia Progresa” in 2008. It provides $37.5 per
month for poor families, on the condition that their
children regularly attend school and have regular
90
health check-ups.
14 %
Guatemalan social protection is characterised by
limited
coverage
and
segmentation
along
socioeconomic lines. In recent years, non-contributory
cash transfers have been implemented.
The ILO convention 183 on maternity leave protection
has not been ratified. Following the Labour Code,
maternity leave is at 30 days before and 54 days after
birth and requires a medical certificate. Wages are
compensated fully by the employer, however if the
worker is covered by social insurance the wage is
compensated in proportion to the contributions made.
The IGSS covers two thirds of the cost and the
91
employer a third.
A recent study has demonstrated that on average 15%
of the population have formal insurance. One out of
four contributes to the Guatemalan Social Security
Institute (Instituto Guatemalteco de Seguridad Social
(IGSS)). And, 15% of the population aged 65 and above
receive a pension. The poorest income quintile has
89
very low coverage, though.
Some local unions have continued to highlight and
protest violations by employers who fail to pay
employer and employee contributions to the national
social security system despite employee contribution
deductions from workers’ paychecks. These violations
resulted in limiting or denying employees’ access to
the public health system and reducing or underpaying
workers’ pension benefits during their retirement
92
years.
The backbone of the country’s contributory social
security is the IGSS, which was established in 1946. It
offers social security benefits for affiliated workers,
mainly in the formal economy. In principle, IGSS
affiliation is compulsory for formal sector companies
with three or more employees. In 2010, there were
5.1 million workers in Guatemala, out of whom only
1.1 million, or around 22%, were affiliated to the IGSS.
While the high rate of informal employment partly
explains this low coverage, in 2006, one-third of the
formal sector workers did not contribute to the
system. IGSS coverage is thus low and in gradual
decline, and continues to be limited mainly to the
A group of labour unions have proposed a tribute and
regulations that permit workers from the informal
economy access social protection, including if they are
93
not members of trade unions.
18
General Economic Performance
94
GDP per capita measured in Purchasing Power Parity
(PPP) is well below the Latin America and caribbean
region’s average and the gap is projected to widen.
Key Facts
(2013 est.)
GDP
US$
53.9
billion
GDP
per capita
(PPP) US$
5.300
GDP
real
growth
Human
Development
Index95
Gini Index
(2007)
0.581
55.1
The Doing Business indicator ranks Guatemala as
medium at 73 out of 189 countries in 2015, dropping
down on 2 step since last year. In terms of Governance
Indicators, the country has a lower medium score on
Control of Corruption and on Government
Effectiveness; the latter has experienced a stagnation.
There is a very low score on Rule of Law.
3.3 %
157 of 228
133 of 187
11 of 141
countries
countries
countries
The Human Development Index (HDI) measures the average of a
long and healthy life, access to knowledge, and a decent standard of
living.
This Gini Index is measured if income were distributed with perfect
'equality', the index would be zero; if income were distributed with
perfect 'inequality', the index would be 100. In terms of the ranking,
the first country has the highest inequality, while the number 141
has the highest equality.
73 of 189
countries
Control of
corruption
Government
effectiveness
Rule of Law
-0.69 (2007)
-0.55 (2007)
-1.14 (2007)
Current US$
Doing
Business96
2015
GDP per Capita (PPP) trend and forecast 2000-2017102
2017
2016
2015
2014
2013
2012
2011
2010
2009
Guatemala
2008
2007
2006
2005
2004
2003
2002
2001
2000
-0.61 (2012)
-0.76 (2012)
-1.10 (2012)
A high ranking on the Ease of Doing Business Index means the
regulatory environment is more conducive to the start-up and
operation of a local firm.97
The selected Governance Indicators cover the years 2007 and 2012
and ranging from ‐2.5 to 2.5; i.e. negative tendencies below the zero
mean and unit standard deviation, score negative measurements. 98
18000
16000
14000
12000
10000
8000
6000
4000
2000
0
Latin America and the Caribbean
Inflation trend 2000-2014 (%)103
Guatemala is the biggest economy in Central America.
The economic growth averaged 4.2% in 2004-2007,
but fell due to the global financial crisis in 2008-2009.
It has since recovered an reached at 3.3% in 2013.
12
11
10
10
8
6
Capital formation also decreased after the global
financial crisis. A fiscal stimulus as well as remittances
from Guatemalans emigrants did cushion the impact
of the crisis, but a series of natural disasters hit in
2010 and 2011, They are also major causes for the
99
slowdown.
6
9
9
8
9
8
7
7
7
6
8
6
7
7
5
5
6
4
7
6
4
4
4
2
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Guatemala
The country is among Latin American countries with
the highest levels of inequality, with a Gini-Index at
55.1 income inequality. It is a multi-cultural country
and 60% of the population are different groups of
indigenous communities. Poverty rates are much
100
higher among the indigenous people. Some tax
reforms were enacted in 2012, to make the system
less regressive for high earners. There are many tax
breaks for high earners, firms and maquilas, which
have been targeted by campaigners as a source for
101
Guatemala’s inequality.
7
6
4
2
0
6
Latin America and the Caribbean
Gross fixed capital formation 2002-2012 (% of GDP)104
25
20
21
18
20
18
21
20
20
21
22
21
23
20
21
16
15
13
14
21
22
15
14
10
5
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Guatemala
19
Latin America & Caribbean (all income levels)
Trade
Trade and Foreign Direct Investment
(2013 est.)
107
105
Exports
Imports
10,3
billion US$
16,7
billion US$
FDI flow
(average 2009-13)
1.1
Billion US$
19 % of GDP
31 % of GDP
2.0 % of GDP
not affect trade. It sets up a monitoring mechanism.
CAFTA has been controversial in the U.S., for not
making
enough
labour
and
environmental
108
requirements, as well as in the Central American
countries for seeking to liberalise state owned
enterprises and opening markets to subsidised U.S.
109
agricultural products. According to estimates from
the ILO, the CAFTA has created a net amount of
17,500 jobs in the agricultural sector in Guatemala.
These are mostly informal, and with variations
110
between the types of agricultural products. In its
2013 assessment, the Office of the U.S. Trade
Representative kept Guatemala on its Watch List,
noting that enforcement of intellectual-property (IP)
rights weakened and prosecutions for IP violations
declined in 2012. Guatemala has been on this list since
111
2001.
FDI Stock
N/a
Due to the maquilas the export sector has a prominent
role on the labour market. However, with 19% of GDP
the export sector is at a medium size.
The 1996 peace accords, which ended 36 years of civil
war, removed a major obstacle to foreign investment,
and since then Guatemala has pursued reforms and
macroeconomic stabilization. The Foreign Direct
Investment (FDI) flows are also at a medium size and
have increased at 48% since 2009. While the
Dominican Republic-Central America Free Trade
Agreement (CAFTA-DR) has improved the investment
climate, concerns over security, the lack of skilled
workers, and poor infrastructure continue to hamper
foreign direct investment.
Products share of exports (2012)
Banana
Coffee, not
s and
roasted
plaintai
9%
ns
6%
Raw
sugar,
cane
12%
The export sector is relatively well diversified, making
it less vulnerable to changes in global demand. The
export productions also have a somewhat good
composition of skill requirements that make it more
possible for skilled labour to be used in other sectors.
But, key agricultural exports include sugar, coffee,
bananas, and metal ores.
Various
57%
Trade agreements
112
Precious
metal ores
and
concentrates
6%
Natural
rubber
3%
Sweather, Petroleum
pullovers, oils, crude
Gold sweatshirts
3%
2%
2%
Guatemala's main export markets (2013)
Guatemala has bilateral trade agreements with Costa
Rica, Mexico, Honduras, Panama, and Taiwan. It is also
negotiating trade agreements with Canada, Chile, and
Colombia.
113
Others;
25%
US; 37%
Guatemala is also part of the Central American
Integration System, which includes the Central
American Common Market and has a Consultative
Committee involving labour and works to harmonise
106
education systems.
Costa Rica;
4%
Nicaragua;
5%
Canada; 4%
Mexico; 5%
EU27; 7%
Guatemala is member of the Central America-United
States Free Trade Agreement (CAFTA-DR), which was
initiated in 2002. It is an agreement between the U.S.
and Central American states, with the goal of setting
up a free trade area. It requires the two countries to
uphold the four core ILO labour standards, as well as
acceptable conditions of work, in a manner that does
Honduras;
8%
EL
Salvador;
9%
In mid-June 2013, Guatemala’s Congress ratified the
EU association agreement, which Guatemala signed
along with Costa Rica, El Salvador, Honduras,
114
Nicaragua, and Panama.
20
115
examine each beneficiary every second year. GSP+
is very much a continuation of the ‘special
arrangement to combat drug production and
trafficking’, which Guatemala benefitted from before
2005. So far only Sri Lanka has lost GSP+ benefits due
to poor human rights standards, but countries like El
Salvador and Georgia has been scrutinised due to
116
labour standards.
Guatemala benefits from EU’s unilateral Generalized
System of Preferences (GSP+) special incentive
arrangement, which allows duty and quota free access
for most products. To be granted and continue to be
granted GSP+, a country must ratify and effectively
implement conventions within human rights,
environmental and the eight ILO Core Conventions.
The European Parliament and European Council will
Export Processing Zones (EPZ)
Guatemala established its first Export Processing
Zones (or maquilas) in the 1970s. These maquilas are
o
117
governed by Decree n 65 of 1989. A company
exporting for more than 51% of their production can
be classified as a maquila, to be given tax breaks for 10
years. According to information provided by the
government to ILO in 2011, there are 740 maquilas
enterprises, six unions and three collective contracts
covering 4,600 workers out of a total of 110,000
118
workers, which is still very low.
which 4% are covered by collective bargaining
agreements. EPZs are mainly exporting to the U.S.
within textiles and manufacturing, with a total of
119
US$560 million.
When attempts to organize the workers they are fast
and sometimes violently stopped through targeted or
mass firing, death threats, blacklists or closing the
120
plant.
The minimum wage in 2014 in EPZ is 2,346 Quetzal
(US$302) per month, which is 8% lower than the
121
regular national minimum wage.
The maquila industry sector has been supported by
the government for decades. This sector has
benefitted from tax holidays, but requires respecting
labour law. Systematically this latter law is very
frequently not enforced. Trade unions have a very low
prevalence in this sector. It has a presence of six
unions and three collective agreements covering 4,600
workers out of approximately 110,000 wormers, of
According to ITUC, over 75% of the EPZ workers are
women, and most are driven out or not rehired when
reaching 35 years of age. Pregnancy is often not
122
tolerated.
21
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23