New minimum wage in Venezuela, insufficient to get out of poverty

The increase in the minimum wage in Venezuela by 1,705%, announced by the illegitimate president Nicolás Maduro last week and which will go from US$1.6 a month to just under US$29, is insufficient for those who receive it —fundamentally employees public and pensioners- get out of extreme poverty, according to various experts and those affected.

With the new salary, Venezuelans still do not reach the figure of US$ 1.90 a day set by the world Bank to consider the exit from a situation of extreme poverty by income range, although they are much closer than with the current salary, going from US$0.05 to US$0.96 per day.

However, if the food bonus is added, which according to Maduro would rise from 3 to 45 bolivars (US$10.5) and which only workers receive, but leaves out pensioners, the income reaches US$39.4, which it supposes US$ 1.31 daily.

The new salary comes into force, as announced by the vice president Executive of the Chavista regime, Delcy Rodriguezfor the second half of March.

In the opinion of the secretary general of the Confederation of Workers of Venezuela (CTV), Jose Elias Torresthe Government has not thought about the daily reality of those affected, in a complex economic context and with the dollarized country.

“Without measuring the reality that workers and pensioners are going through with an economy on the floor, which has gradually become dollarized after almost a year without an announcement of an increase, it surprises us again with half a petro. We are still in a very critical situation.”Torres noted.

insufficient salary

Less than a week after the announcement, workers, especially health and teaching staff, and pensioners and retirees took to the streets to demand a decent wage and better working conditions.

“Our salary is not enough to live on, my God, help us. We are demanding a decent salary, we want quality of life, that our grandchildren return and that our families be reunited, we have completely empty nest homes. The salary that they have just executed does not cover the basic basket for us”said a woman, who did not reveal her identity, during a protest on March 8.

An average Venezuelan family of five people needs at least US$353 a month to meet their minimum food needs, an amount that has increased by 24.7% in the last year, according to the Venezuelan Finance Observatory (OVF).

Efe visited several shops in popular areas of downtown Caracas and found that with The new salary can buy about 13 products of the 60 that the basic food basket contains, such as a kilo of corn flour, rice, sugar, margarine, pasta, black beans (beans), lentils, cheese, ham, meat and chicken , plus a liter of oil and half a carton of eggs.

Traders and consumers consulted do not expect the new increase to significantly increase sales.

The elderly, for their part, demanded that pensions be located above US$900.

repeat episode

According to Maduro, Setting the minimum wage at half a petro was a proposal made by the workers and with which he stated that he agreed.

However, since August 2018, when the government increased the salary then by 5,900%, the income is, in theory, anchored to the Venezuelan cryptocurrency. But, in practice, the petro continued to rise and wages lagged behind.

The current income of 7 bolívares was equivalent to 0.02 petros.

Non-compliance with international conventions

A Commission of Inquiry appointed by the International Labor Organization (ILO) —the number 13 in the organization’s 100-year history—, which visited the country in 2019, pointed out that the Government is not complying, among others, with Convention 26 on the methods for setting minimum wages by not convening a tripartite dialogue to establish entry.

The general secretary of the CTV assured that neither the trade union centrals nor the employers, among them Fedecamaras, the main employers’ association in Venezuela, were consulted before the announcement.

In fact, this increase “unconsulted” was announced four days before the Labor Minister, Jose Ramon Riverosix union centrals and several business representatives will set up a virtual tripartite dialogue with the mediation of the general director of the ILO, Guy Ryderand that they hope to continue on April 25 with face-to-face meetings.

The workers, who hope that these meetings bear fruit, agree that the road to recovering their quality of life must be started not only with a salary that equals the basket, but also with measures that reduce the economic crisis that the country is experiencing with one of the highest inflation rates in the world.