Panama - Labor

In 2002, the economically active population numbered 1.1 million. Of the employed workforce 61% were engaged in the service sector, with 21% in agriculture, and 18% in industry. There was an abundance of unskilled laborers, but a shortage of skilled workers. The unemployment rate rose from 11.8% in 1985 to 17% in 1990, and then declined to 13% by 2000.

In 1999, Panama had over 250 unions with about 80,000 private sector members, organized into 48 federations and seven confederations. The province of Panama is where more than two-thirds of the total number of unions are found. About 10% of the workforce was unionized as of 2001. The Confederation of Workers of the Republic of Panama, formed in 1963, is an affiliate of the ICFTU, and the National Center of Panamerican Workers is affiliated with the WFTU. Strikes are permitted, and collective bargaining is widely practiced.

The law provides for an eight-hour day, a six-day week, minimum wages, a month's vacation with pay, maternity benefits and equal pay for women, and restrictions on the employment of minors. The minimum wage ranged from $0.80 to $1.50 per hour in 2001. All employees are entitled to a one-month annual bonus in three equal installments, two of which the worker receives directly and one of which is paid into the Social Security Fund. The law prohibits children under the age of 14 from working, but child labor continues to be widespread.