- The only method of salary compensation granted by the Executive has been the “Economic War Bond” offered through the Patria System
The minimum wage in Venezuela reached 12 months on March 15, stuck at 130 bolivars. During this time, the monthly income of a worker went from the equivalent of 30.3 dollars to just 5.41 dollars, if calculated at the official rate of the Central Bank of Venezuela (BCV) of the day, which is 24 bolivars. .
At that time, the Venezuelan regime increased the salary from 2 dollars a month to 30, which meant a significant nominal increase, but one year it became insignificant given the increase in the exchange rate and the rise in food prices.
In this regard, the NGO Provea described the minimum wage as a “hunger payment” that does not guarantee the needs and quality of life of the population that depends on that income.
The depreciation of the bolivar and inflation have directly affected public administration workers, who number 5.5 million, according to official figures. To these are added another five million pensioners.
The purchasing power of those who receive the minimum wage does not cover the costs of a family’s food basket, which according to some organizations such as the Venezuelan Finance Observatory (OVF) or Cendas is estimated at over 400 dollars a month.
The OVF in its figures corresponding to February 2023, indicated that the monthly inflation rate reached 20.2%, the accumulated one 67.7% and the annualized 537.7%, figures that according to the entity “destroy the wages purchasing power” and could lead Venezuela back to hyperinflation.
Currently, the minimum wage is so low that it is no longer a reference for the private sector, where on average lower-ranking workers earn 126 dollars a month, reflected the OVF.
The demonstrations do not stop
Given the uncertainty due to the lack of salary increases, neither the protests throughout the country nor the meetings of the Social Dialogue Forum together with the private sector and the representatives of the International Labor Organization (ILO) have managed to materialize a salary adjustment.
The federations of teachers, university professors, as well as the health union and other public employees have led the demonstrations that are repeated daily without the Nicolás Maduro regime announcing any specific measure.
Recently, university teachers went on a 48-hour strike joined by other sectors demanding respect for their collective contracts and appealing for a response from the Executive.
In a speech, Maduro referred to the matter and assured that his Administration is going through a phase of “delivery and resistance” due to the international sanctions of the United States that, in his opinion, prevent them from applying the corresponding adjustments.
However, the export reports of the Organization of the Petroleum Exporting Countries (OPEC) indicated that during 2022 Venezuela received some 18,000 billion dollars in income from the sale of oil, a figure that exceeded the 6,000 billion it generated in 2020.
Ana García, who is a basic education teacher in a school that depends on the Ministry of Education, told The newspaper that the loss of purchasing power of teachers is so high that it has been necessary to have two additional activities to guarantee a dignified life for his family.
On weekends I dedicate myself to making sweets such as ponqués, cakes and snacks that I sell at my residence, while during the week I have a small group of students for directed tasks. Due to the protests I am only working 3 days a week on campus. I do not have a large income but it is much more than the 400 bolivars (approximately 17 dollars) that I receive from the Ministry, ”he explained.
There is no buying power and trade is compromised
A study carried out by the firm Ecoanalítica recorded a slowdown in commercial sales in the country since October 2022, a situation that lasted until January of this year.
According to his measurement, sales in January 2023 reflected a 17% contraction compared to January of last year. This behavior represents a “challenge” for the firm and they expect the trend to continue in the coming months.
For its part, the Andrés Bello Catholic University presented a survey on the psychosocial situation in the country where it was evidenced that for 6 out of 10 Venezuelans the main cause of stress is given by economic problems.
The Indexing That Never Happened
When the salary increase of March 2022 was made, Nicolás Maduro spoke of an indexation to “half a Petro”, for which the creation of the mechanism that would allow the salary to be adjusted as the value of the national crypto asset increased was expected, but that it didn’t happen.
After the publication of the Extraordinary Official Gazette No. 6,691, it was never indicated that the minimum wage would be anchored to the Petro.
Until now, the only compensation mechanism established by the Executive has been the contributions granted through the Patria System through the so-called “Economic War Bond” for both public workers and pensioners.
The last one, which was delivered in March 2023, was 700 bolivars (29.2 dollars) for active personnel and 500 bolivars (20.87 dollars) for retirees and pensioners.
The periodicity and amounts established for this mechanism continue to be discretionary by the Venezuelan regime.
emergency admission
Part of the agreements reached at the Social Dialogue Forum held recently in Margarita, between the Ministry of Labor, the Venezuelan Federation of Chambers of Commerce and Production (Fedecámaras) and the union representatives of the workers, and the International Organization of Labor (OIT), was the creation of a new technical table to define the mechanism to set wages.
However, union leaders expressed the need to apply “an emergency income” that can mitigate the difficulties faced by the working class.
The Central de Trabajadores ASI Venezuela proposed that this income be 50 dollars a month for one year for public workers, retirees and pensioners.
Regarding the sources of financing for the minimum wage and emergency income, ASI Venezuela explained that the resources can be obtained in different ways such as the tax on large financial transactions (IGTF); the bank debit tax; Value Added Tax (VAT), dividends from CITGO, a PDVSA subsidiary, and strategic activities with the Iranians, Russians or Chinese.