He submitted a document to challenge the measure, citing article 461 of the Labor Code.
SANTO DOMINGO- Acoprovi, the Dominican Association of Housing Builders and Developers, believes that the salary increase that came into effect for workers in the construction sector and related areas could represent an increase of up to 7% in the price of housing.
The Builders Association stressed the need for a balance in the measures adopted so as not to impact the cost of housing, although it welcomed the interest in improving the salary conditions of employees in the construction sector in the country.
Recently, the approval of seven resolutions by the National Wage Committee was announced, establishing a 20% wage increase for workers in the construction sector and related areas.
The announced salary increase applies to both formal and self-employed workers. It will be implemented in two phases: 12% retroactive to May 1st and the remaining 8% effective January 1st, 2025.
Seeking reconsideration, Acoprovi reported that on May 28th of this year it submitted an appeal to the authorities regarding said increase, based on article 461 of the Labor Code.
Acoprovi highlighted that the cost of labor constitutes up to 30% of the total cost of construction.
"Considering that the average annual inflation rate in recent years has been around 5.54%, a 20% salary increase is unforeseeable in construction budgets and could have a significant impact of up to a 7% increase in housing prices," he warned.
The main concern is that this increase could result in a large number of homes falling out of the low-cost range, removing the bonus benefit from units already sold.
"In that scenario, many Dominicans would find it difficult to complete the down payment and a large number of families would not have access to decent housing," the association stated.
“It is essential to improve the working conditions of construction workers. And to do so sustainably, preventing informality and guaranteeing affordable housing, it is necessary for all sectors to come together and find ways to implement sustainable improvements,” said Annerys Meléndez, president of Acoprovi.
He reported that an analysis of wagein the construction sector with respect to accumulated inflation reveals that since 2020, including this increase, wages would have increased by 59%, while the consumer price index published by the Central Bank indicates an accumulated inflation of 26.16%, so wages would be increasing more than double with respect to inflation.
He added: "The disproportionate increase in wages can be a counterproductive measure by encouraging informality and unemployment, with all the collateral effects that this entails, which is why we proceeded to challenge it.".
Acoprovi considers it essential to find a balance that guarantees fair and sustainable working conditions for workers, while promoting the economic growth of the construction sector and ensuring that Dominicans can continue to access decent housing.
