Poverty headcount ratio at $5.50 a day (2011 PPP) (% of population)
Varies per sector.
Equivalent to 569 US dollars per worker per month.
Global Living Wage Coalition, 2020
Employment in agriculture (% of total employment) (modeled ILO estimate)
Agriculture, forestry, and fishing, value added (% of GDP)
Panama has a population of approximately 4 million people, with the majority, 68%, living in urban areas and the remaining 32% inhabiting rural areas. The agricultural sector accounts for 14% of total employment in Panama and represents 2% of the national GDP.
During the last two decades Panama has witnessed a great boost in its economy, focusing on service oriented economic activities, with agriculture playing a secondary role. This development is worrisome considering that a large share of the population lives in the countryside and relies on small scale agriculture for their livelihoods. Agricultural land represents approximately 30% of the country’s area, a number that has remained relatively stable over the years. However, stability is not typical in the agricultural sector in Panama, since yields depend highly on the climate conditions. Farmers usually do not have the means to protect their crops, lack farming technology and suffer high post-harvest losses.
Panama’s top produced crops are sugar cane, bananas, rice, plantains, pineapples, and maize. In terms of export, the top commodities are bananas, palm oil, raw sugar, watermelons and pineapples.
The minimum wage in Panama varies per sector. Similarly, the minimum wage established for agricultural workers varies according to the agricultural category and the company size.
Although the minimum wage set by the government is above the poverty line, it only applies to workers in the private sector. This is troubling since almost half of the workforce is employed in the informal sector where wages many times are below the national minimum. In addition, work hour violations occur frequently, and many employers hire workers on short-term contracts to avoid paying their benefits.
The Global Living Wage Coalition has developed a Living Wage Reference Value study for rural Panama based on the Anker methodology.
The Anker Living Wage Reference Value in rural Panama is estimated at 569 US dollar (463 EUR) per month. This is the wage required for workers in a typical rural area of Panama to afford a basic but decent standard of living. The value is constituted of a net living wage of 513 US dollar (418 EUR) per month, plus 56 US dollar (46 EUR) per month, to be deducted by law for social security. In comparison, the Anker Living Wage Reference Value in rural Panama is about 50% higher than the minimum wage in the banana sector, but only 4.5% higher than the average agricultural wage.
Living wage estimate for workers to be able to afford a basic but decent living standard in a typical rural area of Panama. Global Living Wage Coalition, 2020.