Minimum wage increase 50% in Venezuela

The economic situation of Venezuelans has been fraught with unsteadiness in recent years. Some people could say that is due to a change regarding the social and political model of the country. Wherefore, inflation has gripped the wallet of workers and basic products and facilities prices increases have been exorbitant.Minimum Wage

Recently in Venezuela it has been difficult to achieve prosperity and economic independence, we could even say it has
become an impossible task to accomplish. The most basic aspirations for the national population have become praiseworthy feats and first need products prices raise ten times its value due to scarcity every day. Because of this, the national government has been forced to take measures that could grant the recovery of the country’s economy, or at least offset the damage that the economic disaster has been causing in the population.

What does this raise means?

One of those measures is the increase of the minimum wage and nutrition bonus which is granted by law to all workers. On Friday, August 12th 2016, the president Nicolás Maduro announced to the nation an important 50% minimum wage increase. This is the third increase of the year, but economic situation of Venezuelans still goes through a lot of difficulties.

However, this third increase that we mentioned will be valid after September 16th 2016. The minimum wage will be now 22,576.5 bolívares (amount that will be also given to all pensioners holding a Venezuelan nationality and registered at the Venezuelan Institute of Social Security), and that amount will be now coupled with 42,480 bolívares as a nutrition bonus (counterpart of eight tax units). Both fractions add up to 65,056 bolívares as an integral salary for all workers and people that receive benefits. Even though the increase will be effective since the first day of September of this year, nutrition bonus estimate made by employers should be taken from August, so employees must receive retroactive for that past month.

Minimum Wage3This year’s April a previous increase order was made by the president, it placed regular wages in more than thirty thousand bolívares monthly. However, in a few months, the increase became less than enough. This and all minimum wage increases that have been made have benefited public and private employees, military and cardholders from missions promoted by the national government.

Why increase?

On the other hand, the Venezuelan president has announced the gradual reopening of the border with Colombia, a fact that should help to resettle commercial and financial relations with the neighbor country. This fact is well known today for all Venezuelans, considering that the border has been closed as a measure to prevent drug trafficking and food, medicines and capital flight. According to the government, smuggling was in most of the cases the reason for overpricing sales and shortages across the country. Even these days hundreds of Venezuelans, even more people living in the states that are located next to the border, have to cross the border in order to find food and medicines. Furthermore, another recently problem of the Venezuelan economy is the high price of basic food products, shortage and scarcity that contributes to increase this phenomenon. A regulated food prices stablished by the government surpasses the necessity of the population to get products and commodities; likewise scarcity of raw materials, needed by the companies that carry out the food production in the country, continues disappearing due to foreign exchange regulations.

In the words of President of the country Nicolás Maduro Moros, the third minimum wage increase of this year should aim to stimulate decent and well paid jobs all over the country, and it should protect the wallet of Venezuelan workers. In any case and according with government establishments all the measures have been taken in order to protect all Venezuelan citizens from what the national government calls “economic war”. However, Venezuelan economy is one of the most precarious systems in Latin America and moreover all around the world, with an atrocious foreign currency exchange control stablished by law that determines purchasing power of citizens and quality of life of Venezuelans who receive a salary in the weakest currency across the American continent.

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