Dollars vs Pesos

GKLSY · #1 09-09-2009, 05:26 PM

What would be the advantage of being paid in dollars vs pesos? I have read some posts where the person says they want to be paid in dollars and I can't figure out why that would matter. Especially since I think it would be rare that someone would make enough to send/take any back "home".

CFA123 · #2 09-09-2009, 05:39 PM

Example...
In 2002, the peso was at about 20/1 vs the dollar. If you were paid in pesos a salary of 40,000 pesos was worth US$2000.

In 2003, the peso plummeted against the dollar, going to almost 57/1. That same 40,000 pesos salary you were happy with the year before was now worth the equivalent of US$700. If you'd chosen your salary in dollars instead, you could've converted the US$2000 to RD$114,000 - but alas you chose pesos & either had to convince your boss to pay you more pesos, switch to dollars at the original rate, or like most Dominicans... suffer.

That's an extreme, but real example. The peso's been more stable in recent years. However, many like to be paid in dollars as they feel more secure that their earnings/buying power aren't eroded by the exchange rate. Of course, it can work in reverse... if the peso strengthens there's some advantage to being paid in pesos.

bienamor · #3 09-09-2009, 09:16 PM

Very few Dollar jobs! maybe foreign employees transfered here, or part in peso, part in dollar, know one person (teacher) has this deal. other wise not going to happen. Why would a dominican company pay an employee in dollars?

GKLSY · #4 09-09-2009, 09:19 PM

I knew there had to be a reason, I just didn't think enough about it I guess. Thanks for the great example, it makes perfect sense to me now.

CFA123 · #5 09-09-2009, 11:06 PM

Quote:

Originally Posted by bienamor

Very few Dollar jobs! maybe foreign employees transfered here, or part in peso, part in dollar, know one person (teacher) has this deal. other wise not going to happen. Why would a dominican company pay an employee in dollars?

Was fairly common in the zona franca's for employees brought in from outside the country. These companies brought in dollars, so there was some dollar mindset for non-Dominican employees.

As you said, some of the international schools do it as well... probably a few other places... but not that common overall I'd think.