Venezuelan President Hugo Chavez Raises Minimum Wage 26.5%
Ezequiel Minaya, The Wall Street Journal, April 25, 2011
Venezuelan President Hugo Chavez announced a 26.5% increase of the minimum wage late Monday, which will take effect in two stages beginning May 1.
Next month, minimum wage will be raised 15% followed by a second hike in September, bringing the monthly salary to 1,548 bolivars or $360 at the state-set exchange rate. The new wage will cover roughly 1.4 million workers, according to a government official who joined Chavez in unveiling the measure on state television.
Chavez has made it customary since 2000 to raise the minimum wage around this time of year to coincide with the May 1 observance of International Workers’ day. With a 2012 presidential election looming, the pay hike has the added benefit of possibly boosting the popularity of Chavez, who has maintained a core constituency with the aid of lavish social spending. Many workers in Venezuela receive additional benefits that include subsidized housing and food. And recently, the leftist leader announced that a greater percentage of profits from the state-run oil industry would be diverted to Fonden, a social development fund.
The minimum wage increase trails Venezuela’s inflation rate, which is among the highest in the world at 27.4% countrywide during the 12-month period through March. Earlier this month, top officials from the Central Bank of Venezuela and the Finance Ministry said the country’s economic outlook was improving and inflation was on the decline.
During his appearance, Chavez also revealed plans to extend a food benefit for workers that would strike a requirement that firms have a certain number of employees before having to provide meals.