Venezuela’s national minimum wage is to rise 32.25% this year, Venezuelan President Hugo Chavez said on April 7.
In a televised address from Miraflores presidential palace in Caracas, Chavez said the wage rise would take place in two phases, ― first on May 1 and then a further rise on September 1.
The wage rise means that, in dollar terms, Venezuela will have the highest minimum wage in Latin America. Including legally guaranteed monthly food tickets, now valued at US$223, the wage rise will represent a gross minimum income of almost $700 a month for formally employed workers in Venezuela.
The measure looks set to rise above inflation. The government is on track to meets its target of 20%–23% annual inflation for 2012.
Chavez said the wage rise will cost the Venezuelan state $4.66 million which will be paid for with oil income and taxes. “This leap forward in favour of the workers forms part of the project of redistribution of national income to achieve substantive equality,” he said.
The rise will benefit 3.9 million public sector workers, as well as private sector workers and Venezuela’s 2.5 million pensioners through the social security system and new “Greater Love” social program.
Chavez also cited figures that demonstrated that the number of workers receiving the minimum wage in the country’s formal economy had fallen from 65% in 1999, when his administration entered office, to 21% in 2010.
Venezuela’s National Institute of Statistics said, of those employed, 41% work in informal employment, down from 55% when Chavez entered office.
In his address, Chavez said: “Every year without fail the revolution has decreed a rise in the minimum salary, as a way of solidly constructing social justice. It is one of the reasons why Venezuela is the country with the lowest indicator of inequality in this continent.”
Chavez also outlined advances in drafting the new labour law, which is expected to be passed by presidential decree on May 1.
Chavez said the law will contain provisions for a new Social Benefits Fund, which will guarantee that money destined for benefits payments to workers is not diverted to other ends.
The fund will be supported by Venezuela’s state oil company PDVSA, through a new body PDVSA Social, which will receive 4% of PDVSA dividends.
Venezuela’s pro-revolution umbrella union the National Union of Workers (UNT) said the 32.25% wage increase is close to their own suggested rise of at least 33.59%.
UNT coordinator Marcela Maspero stated that the rise does not solve all issues regarding salaries in Venezuela: “It is necessary to do more to give workers a salary that allows them to live with dignity and cover basic material, social and intellectual necessities.”
The wage rise comes among various government policies to guarantee living standards and combat inflation in Venezuela, including the introduction of regulated prices for 19 basic household and bathroom items on April 1.
[Abridged from Venezuela Analysis.]