Even though expenses in El Salvador are lower than countries like the United States, our families are still living precariously on a month-to-month basis, with little room for unexpected expenses in their budgets. As the saying goes here, enfermarse es un lujo: getting sick is a luxury.
Let’s look first at why families are only earning $273.91 on average, per month. The minimum wage in El Salvador varies by the industry in which you are employed, with urban wages set between $211 (factory workers) and $252 (retail and service) a month. The highest wage for the agricultural sector tops out at $129 for coffee pickers, with cotton harvesters on the other end earning less than $100 a month. It might seem then, that only one parent in our scholarship families is typically working. These numbers, however, do not take into account the fact that only 40% of the labor force in El Salvador is employed in the formal sector where the minimum wage is guaranteed. The other 60% of workers participate in the informal economy, are temporary workers, or are unemployed.
In only six scholarship families did the parents report that one of them was unemployed: four mothers and two fathers. The rest listed some kind of employment, whether as cleaning ladies, cooks, mechanics, salespeople on the street, drivers, or hairstylists. More than half of scholarship families (52%) listed their income as variable, meaning they are not guaranteed the income they listed, as their earnings vary from day to day. Unsurprisingly, 60% of such workers in the informal sector are living in poverty, as compared to 30% of those with a guaranteed income. For single mothers or families with both parents working informally, their vulnerability increases.
Families reported their monthly expenses for primary and secondary needs in their scholarship application. These include basics like housing, electricity and water bills, food, clothing, medicine, and education expenses like transport for children and supplies. Secondary expenses included payment of loans, often for basic household furniture or appliances like refrigerators and stoves, as well as public transportation. Things like entertainment, cell phone minutes, and internet access were not included. You can see the results for an average family in the infographic presented here, but the bottom line was that families have a typical margin of error of $22.60 each month. Perhaps some of this money can be saved, but more often than not an unexpected expense will arise, or a bad month will not even bring in the estimated starting income level.
What is clear to us at Programa Velasco is that these families do not have the means to support their children’s education at the child development center with a $45 payment each month. Even with a scholarship, families still must make a contribution depending on their income level, eating into whatever may be leftover at the end of the month. After years of working with families, Programa Velasco also launched the Women’s Empowerment Project in 2014 to work directly with women in the informal sector to help improve their small businesses. With your support, our comprehensive approach to empowering families and contributing to the next generation is making a difference for families committed to a better education for their children.
We hope that this post has provided you with a better understanding of the day-to-day lives of our scholarship families. Next week we’ll be back to talk about another aspect of life in El Salvador!