Uruguay’s workers saw their paychecks grow in 2025, though not as dramatically as the numbers might suggest at first glance. Real wages climbed 1.31% through August, while the minimum wage increased to 23,604 pesos in January. Employment levels rose and poverty rates declined among families.
The story gets more complex when you look at the gap between different wage measurements. Nominal wages surged nearly 7%, yet actual purchasing power grew by just over 1%. This difference comes down to inflation eating into workers’ gains.
When economists talk about “nominal wages,” they mean the actual peso amounts people receive in their paychecks. “Real wages” tell you what those pesos can actually buy after accounting for rising prices.
So while Uruguayan workers received significantly more money in 2025, much of that increase went toward covering higher costs for goods and services rather than improving their standard of living.
The modest real wage growth of 1.31% means families could afford slightly more than the previous year, but the improvement was gradual rather than transformative.
Key Takeaways
Real wages in Uruguay climbed 1.31% through August 2025, with workers seeing their purchasing power grow 1.64% after accounting for rising prices. This marks a significant turnaround for families who had struggled with eroding incomes in previous years.
The country’s inflation rate dropped to just 3.65% by the end of 2025 – the lowest level recorded since 2001. This cooling of price pressures allowed workers to get ahead financially without employers having to dramatically boost pay packets.
Workers’ paychecks grew 6.95% year-over-year through September 2024, easily outstripping the inflation rate. Private companies led the way, increasing wages by 7.20% as they competed for talent in a tightening labor market.
The government raised the minimum wage by 6% to UYU 24,572 starting in January 2026. Combined with broader income gains across households, this helped push poverty rates down from 6.6% to 5.9% – putting basic necessities within reach for thousands more families.
Tech workers continued to command premium salaries, averaging $2,300 monthly – roughly twice what workers earn in other sectors. The industry added 25,891 new positions during 2025, reflecting Uruguay’s growing reputation as a regional technology hub.
Real Wages in Uruguay Rose 1.31% Through August 2025
Uruguay’s workers saw their paychecks stretch a bit further through August 2025, with real wages climbing 1.31% as the country continued its steady recovery from the pandemic downturn. Families could afford a little more at the grocery store and still have money left over at month’s end.
The wage gains helped strengthen the broader economy. Household incomes rose in real terms since 2023, contributing to poverty rates dropping from 6.6% to 5.9% by 2024. The nominal minimum wage increased from UYU 23,604 in January 2025 to UYU 24,572 by January 2026, providing concrete relief for low-income earners. Workers with more spending power drove GDP growth of 2.5% in 2025, demonstrating how improved wages can lift an entire economy when people have greater purchasing capacity. The standard work week remained at 44 hours, with overtime compensated at 150-200% of regular pay rates.
Why Uruguay Wage Growth Stayed Below 2024 Levels?
Despite real wage improvements in 2025, workers felt the difference compared to 2024’s stronger gains. Rising inflation chipped away at purchasing power while the economy lost steam after its robust performance the previous year. Wages still moved upward, but the momentum slowed considerably from what Uruguayans had grown accustomed to experiencing. The private sector wages led overall wage growth with a 7.20% increase, outpacing public sector gains.
Inflation Impact on Purchasing Power
When inflation drops faster than anyone expects, your paycheck suddenly buys more stuff—even if your boss didn’t give you that big raise you wanted. Uruguay’s 2025 numbers paint this picture perfectly. The country’s annual inflation hit 3.65% by year’s end, marking the lowest rate since 2001.
December brought particularly good news for families’ wallets. Food got cheaper by 0.36% that month, with vegetables leading the charge at a 5.8% drop. Your rent or mortgage payments felt lighter too, as housing costs fell 1.44%. Electric bills shrank by 4.9%, which meant less money going to the utility company each month.
These price drops created something economists call real wage growth without employers having to shell out bigger paychecks. Put simply: when your groceries, rent, and power bill all cost less, you’ve got more cash left over for everything else. The central bank recognized this shift was happening and responded by cutting interest rates to 7.5% in December. Core inflation showed steady underlying trends, with the primary measure reaching 3.89% year-over-year despite the broader price declines.
Families across Uruguay experienced genuine relief as their everyday expenses shrank. This wasn’t about flashy economic theories—it was about being able to afford more with the same income, giving households breathing room they hadn’t felt in years.
Deceleration in Economic Growth
Uruguay’s economy showed impressive resilience bouncing back from 2024’s crippling drought, but that surge has naturally begun to ease. GDP growth dropped to 2.5% in 2025 compared to 3.1% the year before, with the third quarter proving particularly weak at just 1.2% expansion.
Workers are seeing this economic shift reflected in their pay stubs. Real wages—what people can actually buy with their earnings—crept up only 0.4% throughout 2025, a dramatic change from the strong recovery wages experienced in 2024. Economists project growth will average around 2.2% for 2026-2027, which means wage increases will likely remain modest.
The manufacturing sector tells a clear story of this cooling trend. Production growth plummeted from 17.9% to 7.6% between recent quarters as global economic uncertainty and weakening demand for Uruguay’s exports created headwinds. This pattern typically hits workers’ purchasing power before showing up in broader economic statistics, making the manufacturing slowdown an early warning signal for household budgets across the country. Looking ahead, Uruguay’s economy is expected to maintain an average growth rate of 3.7% through 2030, which could provide a more stable foundation for wage improvements in the coming years.
Uruguay Minimum Wage Hit Record 23,604 Pesos in January 2025
Uruguay’s national minimum wage reached 23,604 pesos per month on January 1, 2025, marking the highest level in the country’s history. President’s Office Decree No. 369, published December 31, 2024, formalized this 6% increase from the previous rate.
Workers earning minimum wage now take home approximately $536 monthly in U.S. dollar terms. The calculation breaks down to about 944 pesos daily (dividing by 25 working days) or 118 pesos hourly (based on a 200-hour work month). The Ministry of Labor and Social Security verified these figures January 2nd.
The wage adjustment provides immediate relief for Uruguay’s lowest-paid employees, who can now stretch their earnings further when covering rent, groceries, and other essential costs. This baseline salary affects thousands of workers across retail, hospitality, agriculture, and domestic service sectors throughout the small South American nation. Workers with questions or concerns about wage compliance can contact the Ministry of Labor and Social Security at their office on Juncal 1511 or call (+598) 1928 during business hours.
Nominal Wages Grew 6.95% While Inflation Held at 4.5
Uruguay’s workers watched their paychecks grow faster than prices throughout 2024, creating genuine improvements in purchasing power. Nominal wages climbed 6.95% year-over-year through September, while monthly inflation registered just 0.37% in that same period. This gap translates to real money families can use to improve their living standards.
Private sector employees experienced stronger wage increases at 7.20% compared to public workers at 6.50%, highlighting differences in compensation growth between these employment categories. Both sectors contributed to the country’s overall economic performance, with real wages accumulating 1.64% growth year-to-date after accounting for rising prices.
| Sector | Wage Growth |
|---|---|
| Private | 7.20% |
| Public | 6.50% |
| Overall | 6.95% |
The Central Bank has set an inflation target of 4.5% for 2025. If wages maintain their current trajectory while inflation stays near this target, working families should see their purchasing power continue expanding into next year. Uruguay’s minimum wage undergoes adjustments on January 1st each year, with additional changes occurring mid-year on July 1st.
Trade and Finance Sectors Led Uruguay Private Wage Gains
While overall wage increases tell an important story, the performance within specific industries reveals where workers gained the most ground.
Trade sector results came in mixed across Uruguay’s economy. Growth reached just 0.3% in Q2 2025, though strong soybean and meat exports provided solid support. Given that this sector employs a large chunk of Uruguay’s workforce, even modest gains matter for thousands of families putting food on the table.
Financial services took off in a big way. The sector jumped 4.8% in Q2 2025, building on the previous quarter’s 5.1% growth. Banks and financial firms benefited from stable economic conditions that brought back investor confidence after a shaky period.
Manufacturing workers saw the biggest payoff, with wages climbing 7.6% during the same period. These numbers show how different industries experienced completely different wage stories, even as Uruguay’s broader economy picked up steam throughout 2025.
Construction faced headwinds as the sector slipped 0.2% after a 1.5% decline in the previous quarter. The back-to-back drops signaled ongoing challenges for workers in this industry, contrasting sharply with gains seen elsewhere in the economy.
How 25,891 New Jobs in Uruguay Pushed Wages Higher?
New jobs flooded into Uruguay’s economy during 2025, creating a ripple effect that lifted paychecks across multiple industries. The creation of 25,891 positions sparked real wage increases as businesses competed for talented workers.
The technology sector drove this expansion, with over 530 IT companies now employing more than 24,000 professionals. These positions commanded premium salaries—averaging $2,300 monthly, which is double the national standard. When employers compete for skilled talent, workers gain bargaining power.
Key factors behind rising wages:
- Tech exports surged toward $1.8 billion, funding higher compensation packages
- Shared Services Centers generated 10,000+ positions requiring bilingual specialists
- AI engineers earned up to $160,000 annually, though only 12% of professionals possessed this expertise
Global giants like Microsoft and Amazon established operations, reinforcing competitive pay scales. This employment boom transformed Uruguay’s economic landscape. The data shows that when job opportunities multiply rapidly, compensation naturally rises as companies bid for the best candidates.
The wage increases weren’t limited to tech roles. Service industries also saw pay bumps as workers moved toward better-paying tech positions, forcing traditional employers to raise salaries to retain staff. Senior developers earned around $61,000 annually, making these positions competitive yet budget-friendly compared to other Latin American markets. This created a positive cycle where job growth in one sector lifted wages throughout the broader economy.
Uruguay Poverty Fell to 5.9% as Real Wages Climbed
Rising paychecks have delivered tangible financial relief to households nationwide. Uruguay’s poverty rate now stands at 5.9%, representing a direct result of sustained wage growth. The country has transformed dramatically since 2006, when one in three Uruguayans lived in poverty.
Poverty Decline Highlights
| Metric | Result |
|---|---|
| Current poverty rate | 5.9% |
| 2006 poverty rate | 33% |
| Working poverty (2025) | 0.1% |
| Population below $6.85/day | 6.7% |
Consistent wage improvements and expanded job opportunities drove these gains. Significant challenges remain across different communities—children and Afro-descendant populations experience poverty rates twice the national average. Geographic disparities also persist, with northwestern regions lagging behind Montevideo’s economic prosperity. The Artigas region continues to face the highest poverty rates in the country. Growing incomes have given more families the financial stability to make independent choices about their futures.
References
- https://news.bloombergtax.com/daily-tax-report-international/uruguay-president-posts-decree-increasing-national-minimum-wage-for-2025
- https://www.statista.com/statistics/1466003/evolution-minimum-wage-uruguay/
- https://en.mercopress.com/2024/11/01/wages-in-uruguay-grow-6.95-year-on-year-although-real-wages-fall-in-september
- https://deuda.mef.gub.uy/innovaportal/file/31940/1/newsletter-october-2025.pdf
- https://www.puentehillssubaru.com/?s-news-22255747-2025-12-14-uruguay-economy-shows-robust-growth-2025
- https://www.imf.org/en/news/articles/2025/10/30/pr-25352-uruguay-inflation-imf-executive-board-concludes-2025-article-iv-consultation
- https://www.bbvaresearch.com/en/publicaciones/uruguay-economic-outlook-2025/
- https://thedocs.worldbank.org/en/doc/e408a7e21ba62d843bdd90dc37e61b57-0500032021/related/mpo-ury.pdf
- https://www.imf.org/-/media/files/publications/cr/2025/english/1uryea2025001-source-pdf.pdf
- https://real-estate-uruguay.com/uruguay-national-minimum-wage-increase/
