The Chamber of Commerce, Industries and Agriculture of Panama (CCIAP) said on Friday that the negotiation between the union and the construction employers for a wage increase should be developed “without time constraints or the pressure of arbitration,” as the Government already proposed to end the strike that has affected the sector for more than three weeks.
The Panamanian president, Juan Carlos Varela, described on Thursday as "unsustainable" the strike that the Single Trade Union of Construction and Allied Workers (SUNTRACS) has held since last April 18, and demanded that entity and the Panamanian Chamber of Construction (Capac) to ask for an arbitration if next Sunday they have not reached an agreement on salary increase material.
The Panamanian Minister of Labor, Luis Ernesto Carles, had already raised the arbitration option just over a week ago, stating that it can only be activated if the parties to the dispute so request, but SUNTRACS immediately rejected that possibility.
The activation of the arbitration process would automatically end the strike that entered this Friday in its 24th day, with daily losses of about 30 million dollars according to business spokespersons and the discontent of many workers who complain that they are not receiving the strike subsidy of about 50 dollars per week, by the union, on time.
The president of the CCIAP, Gabriel Barletta, said in a public statement on Friday that “in the last 40 years, Capac and SUNTRACS have successfully negotiated more than 10 collective agreements”, to which he attributed “that the construction workers have the highest salaries and benefits in Latin America.”
Barletta said that the Chamber, which groups more than 1,600 companies from 5 economic sectors of Panama, recognizes “the Governments’ concern about the economic cost and delays in public works caused by this strike.”
“The CCIAP estimates that every salary increase must consider inflation and current productivity to maintain the competitiveness and sustainability of the industry, workers’ jobs and the economic activity that derives from it,” said the business leaders.
At the beginning of the strike, SUNTRACS demanded a salary increase of 60 percent payable at a rate of 15 percent per year during the next four years, the time of the collective agreement, while the Capac presented a 2 percent offer for all the term.
The directors of both groups acknowledged that their proposals were extreme and have relaxed their salary increase demands, which already came in the case of SUNTRACS at 4 percent per year and Capac at 2.5 percent per year, “La Estrella de Panamá” newapaper printed on Thursday.
The CCIAP added that in the event of arbitration, the Government and the parties should “assign arbitrators with extensive knowledge in the resolution of labor disputes, and who can correctly interpret the economic parameters and the current situation of the construction sector.”
“The CCIAP insists that the result of this collective agreement will have repercussions in most sectors of the economy and the population, so it urges the government to review the incentives for residences in the preferential interest tranche,” the union said.
He added that the authorities should also review “the construction codes and requirements in force, so that the impact of this increase does not affect the purchasing power of citizens.”
The construction sector is one of the engines of the Panamanian economy and in 2016 generated 14.9 percent of the country’s gross domestic product (GDP), one of the most dynamic in the region with an economic expansion of 5, 4 percent in 2017.
However, the sector has been spiraling for several years. Official data released on Wednesday indicated that construction activity in the private sector fell by 48 percent in the first quarter of this year in relation to the same period of 2017.