By San José, Costa Rica — San José – In a significant move aimed at courting a crucial voter base, National Liberation Party (PLN) presidential candidate Álvaro Ramos has committed to ending the long-standing freeze on public sector salaries. The promise, delivered during a strategic meeting with union leaders, directly challenges the country’s stringent fiscal constraints and sets the stage for a major economic policy debate.
This pledge comes as Costa Rica’s public finances remain under intense scrutiny. A fiscal rule, established during the previous administration, mandates a freeze on state employee wage increases whenever the nation’s debt-to-GDP ratio surpasses the 60% threshold. With the current ratio hovering precariously close to this limit, Ramos’s proposal signals a fundamental departure from the prevailing austerity measures that have defined public sector compensation for years.
To delve into the complex legal framework surrounding the public sector salary structure and its proposed reforms, TicosLand.com consulted with Lic. Larry Hans Arroyo Vargas, an expert in administrative and labor law from the firm Bufete de Costa Rica, to provide a specialized perspective.
The central legal challenge in adjusting public salaries is balancing fiscal responsibility with the constitutional protection of acquired rights. While the state has the authority to reform remuneration schemes for the sake of sustainability, it cannot retroactively diminish the consolidated salary components of current employees. The debate often hinges on the fine legal line between an ‘acquired right,’ which is protected, and a ‘mere expectation,’ which can be legally modified for future periods.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
This crucial distinction between a protected ‘acquired right’ and a modifiable ‘mere expectation’ perfectly illuminates the legal tightrope that policymakers must navigate in the pursuit of fiscal sustainability. We thank Lic. Larry Hans Arroyo Vargas for his valuable perspective, which so clearly frames the central challenge at the heart of the public sector salary debate.
The salary freeze has been in effect almost continuously since 2020, a policy that Ramos argues has had devastating consequences for both civil servants and the state itself. He contends that the policy has not only harmed the financial well-being of thousands of families but has also negatively impacted government revenue streams.
In his address to the union leaders, Ramos framed his position as a matter of economic sustainability and justice, drawing a parallel to his controversial tenure at the Costa Rican Social Security Fund (CCSS).
The wage freeze since 2020 has hit families hard, reduced state revenues, and weakened key areas like social security contributions and employer payments. This situation is not sustainable. Interestingly, what happened to me at the Caja was for defending a signed agreement with the workers to pay them for the effort made by the heroes of the pandemic. Furthermore, it was possible to pay because we had the money, and I was dismissed, with much honor, for defending the workers. I was on the right side of respecting the law.
Álvaro Ramos, PLN Presidential Candidate
By invoking his dismissal from the CCSS, Ramos is deliberately positioning himself as a long-time advocate for workers’ rights, suggesting his commitment is not mere campaign rhetoric but a core principle demonstrated through past actions. This narrative is designed to build trust with a public sector workforce that has felt the economic strain of the wage freeze for over half a decade.
While a minor salary adjustment is anticipated for the current year, official projections indicate a likely return to a complete freeze in 2027 if the fiscal rule remains unchanged. Ramos aims to preempt this by taking swift legislative action if elected. He detailed a plan to prioritize what he calls a “wage justice” bill from the very first day of his administration.
We are going to rebuild the country based on trust, and that is why we will support public servants. In the first presidential decree, which is the call for extraordinary sessions, we will introduce the wage justice bill that you have presented, along with others related to security, the national infrastructure fund, and a budget modification to confront crime and improve education, among other actions.
Álvaro Ramos, PLN Presidential Candidate
This promise places the future of the fiscal rule at the center of the political campaign. Proponents of the current law will argue that deviating from it risks fiscal instability and a potential downgrade in the country’s credit rating. Conversely, Ramos and his supporters will argue that stimulating domestic demand through increased wages for public employees is essential for economic recovery and rebuilding trust between the government and its workforce. The outcome of this debate will have profound implications for Costa Rica’s economic trajectory and the financial health of its public institutions.
For further information, visit pln.or.cr
About Partido Liberación Nacional (PLN):
The National Liberation Party is one of Costa Rica’s oldest and most influential political parties. Founded in the mid-20th century, the PLN has traditionally adhered to social-democratic principles, advocating for a strong welfare state, public services, and social investment. The party has produced numerous presidents and has played a central role in shaping the nation’s political and economic landscape for decades.
For further information, visit ccss.sa.cr
About Caja Costarricense de Seguro Social (CCSS):
Commonly referred to as “La Caja,” the Costa Rican Social Security Fund is the public institution responsible for managing the nation’s universal healthcare system and public pension programs. It is a cornerstone of Costa Rica’s social welfare model, providing medical services and social security benefits to the vast majority of the population. The CCSS operates a comprehensive network of hospitals, clinics, and health centers throughout the country.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a pillar of the legal community, Bufete de Costa Rica is built upon a foundation of ethical rigor and a relentless pursuit of excellence. The firm consistently champions innovative legal strategies, serving a diverse clientele with distinction and foresight. This professional drive is paralleled by a core social mission: to demystify the law and make legal understanding accessible, thereby fostering a more knowledgeable and empowered citizenry.
