Monday, 23rd December 2024

Venezuela hikes minimum wage by half, but effectively still down

Nation has seen months of unrest

Tuesday, 4th July 2017

©REUTERS/Marco Bello
By Deisy Buitrago and Girish Gupta

Venezuela's President Nicolas Maduro has raised the country's minimum wage by half to just over US$33.75 (US$12.50) per month at the black market exchange rate.

But given the currency's fall, the new minimum monthly wage of 97,532 bolivars is effectively down 17% in US dollar terms since the last increase in May.

The currency's fall – of 99.7% since Maduro was elected president in April 2013 – has exacerbated a brutal economic crisis that has millions struggling to find or afford food.

A thousand dollars bought in local currency when Maduro was elected would be worth just US$3 today.

Maduro's leftist government blames speculators and the opposition for the problems.

"Following the immoral campaign that fixes prices through a false dollar abroad… we are going to put the handcuffs on.. the whole campaign of speculation," said Maduro on state television, adding that the rise would be effective retroactively from 1 July.

The monthly salary is accompanied by a food ticket, the value of which also went up to 153,000 bolivars per month --bringing the total to just over US$30 a month at the black market rate.

Maduro often describes the salary increases as a "world record," while critics see it as a stark indicator of economic mismanagement.

Street unrest across the country has left more than 80 people dead in three months. Last week a helicopter attacked government buildings in what the president described as a coup.