Venezuela: What Is Known about the Lack of Minimum Wage Increase?

One of the many problems that Venezuela has faced since the beginning of the economic crisis, which has been occurring since 2013 with the death of Hugo Chávez and the fall in oil prices, has been related to the devaluation of the currency. This situation has condemned the bolivar to be one of the currencies most affected worldwide by the hyperinflation suffered by the South American country.

Despite the efforts that have been made by the government, these do not seem to be enough. So much so that Nicolás Maduro, taking advantage of the demonstrations on May 1 for Labor Day, informed public opinion that the minimum wage will remain at $5.25, about 130 bolivars, as set since March 2022. However, he informed that the bonds called 'cestaticket' will rise from 15 to 40 dollars, and a new 'war bond' will be 20 dollars. With this, it will be 60 dollars more that will be added to the minimum wage.

The people who will benefit from these new bonds will be public sector employees, such as teachers and health personnel. However, the prices of the family basket are so high that these vouchers will not cover these expenses, an argument verified by the Center for Documentation and Social Analysis (Cendas). According to this center, to buy essential food products for a group of five people, 510 dollars are needed.

The 'Destitute Wage Earners' Make Themselves Felt

Despite Maduro's announcement to increase the price of the bonds, state employees spare no effort to show their nonconformity by holding sit-ins and demonstrations. During the last quarter they have increased by 47% according to the Venezuelan Observatory of Social Conflict.

The Executive has blamed the United States and its economic sanctions for the impossibility of ensuring decent wages for the population. Even so, the employees do not tire of protesting, even if this act does not ensure that they obtain what they want.

For their part, private sector employees, despite earning more, are no strangers to these cries for wage and labor justice. Thanks to these demonstrations, a forced conformism that is felt in the streets with the policies that come from the government is broken. Two million people are found in the public sector alone, whose employees refer to their salaries as 'destitute wages' . Likewise, pensioners in this sector are around three million people.

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A Nation with Official Poverty?

Being the country with the lowest minimum wage in Latin America, Venezuela is increasing unfavorable records for its economy. If the calculation of poverty in the Bolivarian country is carried out, based on the premise of the UN and the World Bank that considers a person who lives with 2.15 dollars or fewer a day to be poor, Venezuela is experiencing a very complicated situation. If the 65.25 dollars are divided by 30 days, it gives a result of 2.17 dollars per day, which means that the minimum wage is not enough for a person not to be considered in a situation of poverty.

So much is the devaluation of the local currency that Venezuelans have chosen to use the dollar to safeguard their personal economy. For many years, the Venezuelan government refused to use this currency, emphasizing the rejection of the imperialist and capitalist currency. However, at present dollarization in Venezuela is a fact, even since the government has begun to use the North American currency.

This entire situation of dollarization, plus precarious wages and inflationary instability, has meant that in Venezuela there are no decent wages for the population in general, only for high command and high positions.

60 Dollars a Month, What Is it for in Venezuela?

It is known that with 510 dollars a minimum stability can be brought to the Venezuelan home. However, what happens when there are only 60 dollars in your pocket?

According to the Venezuelan Finance Observatory, 60 dollars is enough to buy 30 eggs, two kilos of cornmeal, two kilos of white cheese, three kilos of meat, a medium chicken, and two corn oils. Foods such as pasta are at $2.29 per kilo, milk at $11.42 for two cartons, and ground coffee at $11.60 per kilo.

Only what is related to food is being included here, so cleaning products, transportation, medicines, and clothing cannot even be included in the accounts of Venezuelan families.

The Spectrum of Inflation from Other Latitudes

Governments do not like comparisons, much less when they are international. However, the value of this action is truly knowing how well, or how badly, the national economy is.

One of the most common and practical indicators is related to the price of the Big Mac. Its science is in knowing, through the price of this hamburger, if a currency is overvalued or undervalued in the market. Thus, it is possible to compare the purchasing power between nations.

In the case of Venezuela, buying a Big Mac costs 1.76 dollars, where the minimum wage is 60; in Colombia it costs 4.16 dollars, where the minimum wage is 242; in the giant Brazil it costs 4.44 dollars, and the minimum wage is 264; and in Mexico it costs 4.19, while the minimum wage is 321. Where a Big Mac costs the most in Latin America is in Uruguay with 6.85 dollars and whose minimum wage is 527.

Being this a simple way of observing inflation in each country and the real value of the currency, it suggests that only a few countries are economically fortunate, and even fewer in Latin America. Venezuela is a constant example that you have to know how to take advantage of moments of prosperity to be able to face precarious situations.