Venezuela is unable to raise the minimum wage, set at 130 bolivars per month – $3.50 at the current official rate – due to the country’s economic limitations, obligations under labor law and the public expenditure that this would represent for the state, according to experts.
Faced with the impossibility of assuming these burdens, both the Government – which points to sanctions as the determining factor preventing wage increases – and the private sector pay their employees bonuses that do not affect labor benefits such as vacations, severance pay and profits, while the minimum wage has not been adjusted since 2022.
Nicolás Maduro justifies the bonuses as part of a phase of resistance to the economic crisis generated by international sanctions.
However, economist and director of the firm Ecoanalítica, Asdrúbal Oliveros, told EFE that labor legislation is one of the conditions that prevent an increase in the minimum wage.
«(The labor law) generates very strong rigidities for the employer (…), especially what is linked to social benefits, which have a character, in some way, retroactive, and whose growth can become exponential.“Oliveros explained.
Raising the minimum wage – he added – would imply “significant costs“, in particular for the State, which is”the main employer» of the country, with a payroll of 2.5 million active workers -according to calculations by Ecoanalítica-, although the burden is much greater, since we must add to the retirees already around four million pensioners.
«It is not a question of earning 100 dollars, 200 dollars, it is a question of whether, with the current flow of income that the Venezuelan State has, it is unsustainable to give them an income, let’s use the word ‘dignified’ (…). This State is unviable with that number of workers.“, he added.
For his part, the economist and president of the National Academy of Economic Sciences, Leonardo Vera, told EFE that increasing the minimum wage would also imply, “adjust the entire salary scale» of public employees, according to their rank, and the Government has stated that «does not have the resources to face a load of that magnitude«.
Vera said that the nation’s budget can be spent on that number of dependents alone, including active, retired and pensioned public workers.
He added that “freezing» the minimum wage, the Government maintains “tax spending under control”» and does not need «print as much money as it did before during the time of hyperinflation, to try to meet those obligations«.
«The logic behind this policy is that if I raise wages (…), then I have to find resources that I don’t have (…). Economic activity is not picking up, neither is oil revenues and the taxes collected in this way are not very high either (…) if I don’t have enough income, I have to create money.“, he explained.
That “excess of bolivars“-said Vera- it goes to the market and is exchanged for dollars, which raises the exchange rate and, consequently, the prices of the economy in Venezuela.
For the economist, the figure of the minimum wage “has been destroyed» in Venezuela, while «In European countries it is a labor achievement“, as well as a”possibility of organizing, of negotiating wages through collective agreements«.
«The minimum wage is part of those labor conquests that perished in Venezuela“, he concluded.
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2024-07-06 04:03:20
