Critics say Venezuela’s 15 percent minimum wage increase not sufficient to fight inflation

Global Business

Venezuela will increase its minimum wage 15 percent in December in an effort to protect workers from an inflation rate of more than 60 percent. CCTV America’s Martin Markovits reported this story from Caracas.

Critics say Venezuela\'s 15 percent minimum wage increase not sufficient to fight inflation

Critics say Venezuela\'s 15 percent minimum wage increase not sufficient to fight inflation

Venezuela will increase its minimum wage 15 percent in December in an effort to protect workers from an inflation rate of more than 60 percent. CCTV America's Martin Markovits reported this story from Caracas.

With the Christmas shopping season approaching, President Maduro said the move is meant to stimulate holiday buying and help alleviate the country’s ever-rising inflation rate, which is now the highest in Latin America. The 15 percent monthly wage hike is the third that the Maduro government has implemented this year.

“You’ll have the resources, tomorrow the money will be put into the accounts, and in December you’ll receive your new salaries and it will increase the pay scale for all,” the president said.

John Aristizabal, who runs a food stand to support two young daughters said he has mixed feelings about the most-recent minimum wage hike. The increase would mean an additional 820 bolivars a month, about $130.

“It helps for something, but things are still extremely expensive,” he said. “Something you buy today that costs 2,000 bolivars [$317] costs 3,000 [$476] tomorrow. The prices rise extremely high every day, but your pay only increases every 6 months or every year.”

Opponents said the plan is a move in the wrong direction after 15 years of financial mismanagement by the government under Maduro’s late predecessor Hugo Chavez. They also said the increase is not enough and criticized the higher increases given to those in the military.

“It’s discriminatory that there’s a 45 percent increase granted to the armed forces, and only 15 percent for the minimum civilian salary,” said Andres Valesquez, an opposition lawmaker. “Also, this increase is not in line with the high cost of living or the increase in inflation.”

According to the latest data available from the Venezuela Central Bank [pdf in Spanish], inflation rose to 63.4 percent in August, levels not seen since the 1990s. Experts have said that number also could climb even higher.