Nicaragua Table of Contents

Composition of the Labor Force

In 1989 the total labor force consisted of approximately 1,277,000 persons. Almost one-third of the labor force is made up of women, and about one-third of all working-age women hold jobs. In general, members of the labor force are relatively unskilled and have a high degree of mobility, frequently changing jobs or moving to other areas of the country to obtain work. Agriculture accounts for more than 30 percent of all employment, and workers outside of agriculture are more likely to be self-employed in small family-owned enterprises than salaried employees of larger concerns.

Approximately 40,000 new people usually enter the Nicaraguan labor force each year. Throughout the 1980s, many Nicaraguan workers were diverted from productive economic activities to the war effort. The 1990 demobilization of the military, however, added 50,000 persons to the work force.

Nicaragua entered the 1980s with a severe scarcity of skilled labor, especially technicians and other professionals. A "brain drain"--more than half a million professionals moved out of the country during the Sandinista era--further robbed the country of the expertise needed to staff its institutions. As many as 70 percent of Nicaraguan graduates with a master's degree in business administration were estimated to be in self-imposed exile in 1990.

Employment Conditions

Conditions of work are covered by several labor laws and are also spelled out by articles in the 1987 Nicaraguan constitution. The constitution specifies no more than an eight-hour workday in a forty-eight-hour (six-day) work week, with an hour of rest each day. Health and safety standards are also provided for by the constitution, and forced labor is prohibited.

The Labor Code of 1945, patterned after Mexican labor laws, was Nicaragua's first major labor legislation. Provisions of the code prohibited more than three hours of overtime, three times a week. Workers were entitled to fifteen days of vacation annually (eight national holidays and seven saint's days). The Nicaraguan social security program, passed in 1957, enumerates workers' benefits, including maternity, medical, death, and survivors' benefits; pensions; and workers' compensation for disability.

The constitution provides for the right to bargain collectively. In addition, the Labor Code of 1945 was amended in 1962 to allow for sympathy strikes, time off with pay when a worker has been given notice of an impending layoff, and the right to claim unused vacation pay when terminated. The minimum age for employment is fourteen, but the Ministry of Labor, which has the responsibility of enforcing labor laws, rarely prosecutes violations of the minimum-age regulation; young street vendors or windshield cleaners are a common sight in Managua, and children frequently work on family farms at a young age.

A National Minimum Wage Commission establishes minimum wages for different sectors of the economy. Enforcement of the minimum wage is lax, however, and many workers are paid less than the law allows. Labor groups have argued that the minimum wage is inadequate to feed a family of four, and in 1992 the country's largest umbrella group of unions issued a statement demanding that the government index the minimum wage to the cost of living.

Organized Labor

All public- and private-sector workers, except the military and the police, are entitled to join a union. The estimate of the number of workers in unions varies considerably, but some labor leaders place the number as high as 50 percent. Unions are required to register with the Ministry of Labor and must be granted legal status before they can bargain collectively; however, some labor groups complain of intentional delays in this legalization process. Unions are allowed to freely associate with each other or with international labor organizations.

The country's two largest unions, the Sandinista Workers' Federation (Central Sandinista de Trabajadores--CST) and the Association of Agricultural Workers (Asociación de Trabajadores del Campo--ATC), are associated with the Sandinista political party and are also a part of the umbrella group for all Sandinista unions, the National Workers' Front (Frente Nacional de Trabajadores--FNT). Three smaller unions, the General Confederation of Workers--Independent (Confederación General de Trabajadores Independiente--CGT-I), the Federation for Trade Union Action and Unity (Central de Acción y Unidad Sindical-- CAUS), and the Workers' Front (Frente Obrero--FO), are affiliated with leftist political parties. The Social Christian Workers' Front (Frente de Trabajadores Socialcristianos--FTS) has ties with the Nicaraguan Social Christian Party (Partido Social Cristiano Nicaragüense--PSCN). Workers in various sectors of the economy, including health care, transportation, coffee, livestock, and agriculture, have their own unions.

Unemployment and Underemployment

Reliable labor statistics are difficult to obtain, but nearly half of Nicaragua's work force was estimated to be unemployed or underemployed in 1990. Many Nicaraguan workers eke out speculative incomes in the burgeoning informal sector, which encompasses about 55 percent of the economically active population. After several years of hyperinflation in the late 1980s had eroded conventional salaries, thousands of Nicaraguans chose to cast their lot as black marketeers, street vendors, taxicab drivers, and other persons earning their livings on the streets. Almost everyone sought some means to augment or replace inflation-ruined salaries.


As fixed salaries became increasingly meaningless in the late 1980s, high annual turnover, as much as 100 percent for urban industrial workers, was also typical of the Nicaraguan labor force. By 1988 real wages in Nicaragua were less than one-tenth of those in 1980, reflecting the impoverishment of the middle class as well as increasing numbers of the poor. Nonwage incentives instituted by the Sandinista government in the early 1980s for public-sector workers were abandoned during the period of extreme economic adjustment of the late 1980s. By inauguration day 1990, it was not uncommon for skilled office workers to earn the equivalent of US$10 per month, augmented in some cases by dollar-denominated bonuses for workers in the private sector.

Labor Unrest

By 1990 labor unrest was rampant. Urban workers vied with their rural counterparts to protest deteriorating economic conditions. The workers' protests, however, were soon drowned out by demands by the business class for government trade subsidies, preferential investment, and credit, particularly in the historically dominant agricultural sector. Drought in several food-producing areas in 1990 decreased the amount of food available, increased prices, and exacerbated already severe poverty. In addition, as many as 500,000 refugees returned to Nicaragua, including thousands of former Contras. They, along with thousands of former private- and public-sector workers, further swelled the ranks of the unemployed and underemployed, and increased the burden of grievances with which the new government had to deal.

One of the most troublesome problems for the Chamorro government was ongoing support for the Sandinista revolutionary ideals from a large segment of the population and high expectations for government help to address the needy. The Sandinista administration had permanently altered the "psyche" of the Nicaraguan poor. From inauguration day onward, President Chamorro was confronted by a strike-ready labor force motivated by pressing needs and a suspicious, foot-dragging private sector.

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Source: U.S. Library of Congress