Venezuela, survive with the lowest minimum wage in Latin America | International
In Quinta Crespo, one of the main markets in Caracas, Beatriz, who is carrying a broccoli that cost her a dollar and will be what she eats for two days, can come across in the same day; ex-guardian Cruz, with a few tomatoes, a spoiled paprika and an onion for which she paid the same as Beatriz; and Petra, who worked all her life as a teacher's assistant in a preschool and that Friday she bought a few eggs for twice what Beatriz and Cruz paid for the vegetables. They are Venezuelan pensioners and they have lost almost a third of their monthly pension, equivalent to the minimum wage, in those purchases that they will stretch to eat for a few days.
The minimum vital income in Venezuela is set at 130 bolivars, which is equivalent to about 5.4 dollars, once again bordering on misery levels, after a voracious devaluation of the currency in recent months, and ranks as the lowest in Latin America , followed by those of Haiti and Cuba, which in 2023 are closer to 100 dollars, above the 57 dollars a month that, according to the United Nations, marks the threshold of extreme poverty. The salary that a part of Venezuelans earn in a month is enough for a bag of bread and a liter of milk, for just a package of four rolls of toilet paper or a box of 30 generic antihypertensive pills. It is not enough to pay the rates for electricity, water and telephone services in a home.
The demand for an increase in the minimum wage and, with it, the consequent push for the entire salary scale of the public administration, has prompted more than a thousand protests so far in 2023 throughout Venezuela. Teachers, university professors, workers in the health sector and basic industries have led the demonstrations that are repeated daily without the government of Nicolás Maduro finishing announcing measures. Last week they took to the streets again and university teachers went on strike for 48 hours. "We will give birth to resources," the president said days ago after assuring that his administration is experiencing a phase of "birth and resistance" due to the international sanctions of the United States. This month of March marks one year since the last adjustment of the minimum wage that has become nothing.
A few days ago, in a protest by teachers, union leaders demanded that the resources from the exploitation of the Orinoco Mining Arc, where the Venezuelan government has taken refuge, be used to make up for the decline in oil revenues, to increase the salary, cancel what the State owes them since 2018 and restore other labor rights. The teachers asked the Labor Inspectorate to intervene in the conflict that has kept them on the streets and has forced them to reduce class hours as a way of putting pressure on them.
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The demonstration did not reach 100 people, but it was heavily monitored by police and government intelligence officials. There was Jorge Guerra, a mathematics and physics professor, who receives almost four times the minimum salary (480 bolivars, about 20 dollars) and spends it entirely on transportation to get to work. Like many teachers, Jorge is looking for other jobs. “One day I worked as a street worker and I earned what I earn for a whole month as a teacher, I have also worked as a painting assistant and I earn much more”, he says. “I have thought about dedicating myself to that and not going back to teaching.”
The family is supported by his wife who works in the private sector and gets bonuses in dollars that allow her to pay the rent for the house. That day, Jorge carried Clap products in his backpack, the program through which the Government sells subsidized food that is part of the diet of a large part of Venezuelans. In many communities, these products are exchanged for others, a barter business that recycles the food bought by the Government, under a scheme that has been accused of corruption. The teacher took out bags and bags of flour to find a can of sardines and another of ham, the only proteins that were included in his allowance that month.
Noris, 56, is an employee of the Ministry of Labor, and after almost 25 years of service, she earns a little more than the minimum wage. With the help of her eldest son, she supports her two youngest children with some survival strategies: giving up the chicken and meat that they can eat twice a month with zucchini and other vegetables, and she hasn't bought clothes in years. . In Carnival, the Government distributed a so-called "war bond" of 88 bolivars that allowed him to buy a piece of cheese. "This is horrible, the money is not enough and I don't see improvement," says the woman.
Official data indicates that in Venezuela there are 5.5 million workers who belong to the public administration, to which are added another five million pensioners, who receive minimum wages or salaries that by far do not cover the food basket of a family in Venezuela. , which some organizations estimate at $400 per month. “Earning eight or 10 minimum wages in Venezuela still keeps you poor,” says economist José Manuel Puente.
“The underlying problem is the devaluation and inflation that has devastated the salary of Venezuelans. Inflation in January was 39% and the annualized inflation reached 440%. This destroys the purchasing power of salaries and being close to 50% per month indicates that hyperinflation could return after having experienced the second longest episode in history”, warns the professor from the Institute of Advanced Higher Studies in Venezuela and from the IE University and the University of Salamanca in Spain.
The pressure of the labor mass has even reached the requests of the International Labor Organization. A few weeks ago, a technical roundtable was set up to discuss among different trade union organizations a method of fixing the minimum wage that would better withstand the ravages of a bankrupt economy. A year ago, Nicolás Maduro raised his salary from about two dollars a month to almost 30 dollars. A nominally gigantic rise, but after a year it became insignificant because the exchange rate multiplied by five. The minimum wage is so low that it has long ceased to be a benchmark for the private sector, which pays its lowest-ranking workers an average of $126 a month.
Data is needed to arrive at a method for setting the minimum wage, but the government has not published information on public finances for more than a decade. In Venezuela income and expenses are unknown and the Nation's budget is not public. "Salary containment is a State policy to save expenses, we do not understand for what reasons, but it has no justification," adds Hermes Pérez, economist and former official of the Central Bank of Venezuela.
Pérez points out that despite the opacity over government management, OPEC export reports indicate that during 2022 the Government received some 18,000 million dollars in income from the sale of oil, almost 200% more than what it generated in 2020 when they arrived to 6 billion dollars. An increase, even with the sanctions, due to the increase in crude oil prices after Russia's war in Ukraine. "The government has income to pay salaries that are higher than what it pays," he says. In addition, during 2022, Maduro incorporated a tax on transactions in dollars and the Government increased its collection by 86% compared to the previous year, some 4.7 billion additional dollars, according to the tax agency.
Raising the minimum wage has been seen for years as fuel for rising prices. But today, even the business sector integrated into the Fedecámaras employers' association has joined the clamor of the unions to increase it, so that this results in greater purchasing power that can stimulate growth. “The economy is 30% of what it was a decade ago, it has become dwarfed, and anything becomes salt and water when there is no coordination between fiscal policy and monetary policy. The only way that wages have purchasing power is with increases in production and productivity,” warns Puente.
The Ecoanalítica firm registered a drop of more than 23% in the volume of sales in Caracas —which behaves like a bubble— compared to December. This indicator accounts for the slowdown that the economy is experiencing and that is accelerating the conflict over wage demands and rising prices. A totally opposite situation to that experienced at the beginning of 2022, when Maduro started the year on the right foot.
This week the Andrés Bello Catholic University presented a survey on the psychosocial situation in the country that found that for 6 out of 10 Venezuelans consulted, the main source of stress is economic problems. And inside the country the situation can be even more devastating. From the eastern part of the country, from the town of Güiria, Miguel, 27, immigrated to the capital four months ago. Four years earlier he had already retired from the Armed Forces, where he earned minimum wage, to try to survive as a farmer.
“You work and there is not enough for anything. Here you don't have any kind of future”, he says discouraged. Since he arrived in Caracas, every day he shares a sunny sidewalk with other informal vegetable vendors from Quinta Crespo. Thus, he tries to generate income that allows him to pay for his life in capital and send money to his wife, a teacher who earns the minimum wage, and the two daughters he left behind in his town.
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