CARACAS (AP) — The president of Venezuela, Nicolás Maduro, announced on Thursday the largest increase in the minimum wage in the last year, although still at levels that are not enough to cover the basic basket.
The president said that the new minimum will be 126.32 bolívares per month, which is equivalent to about 29 dollars at the official exchange rate. The equivalent was previously less than two dollars a month and was announced in May 2021.
The basic food basket rose to 365 dollars a month in January, according to a report by the Venezuelan Finance Observatory, an independent analysis center.
Venezuela is a country that for four years was submerged in hyperinflation, that is, in an increase in the prices of products and services by more than 50% per month.
The inflation index started to decline last year and was below 50%, but still the annual rate closed at 686.4% in 2021.
Maduro made the announcement in a meeting with workers, although he did not indicate when the new amount would take effect.
He said that the new minimum wage will be subject to the value of half a Petro, the cryptocurrency created by his government and whose unit value is equivalent to about 60 dollars.
Analysts consider that the impact will not be felt by many, since private companies already pay salaries above 30 and 40 dollars a month.
“In the private sector the impact is very minimal,” said Henkel Garcia, director of Econometrics, a firm specializing in economic advice.
According to Maduro, the increase in tax collection would allow the public administration to pay for the new salary increase.
In Venezuela it is common for professionals to have two or even three jobs to increase their income. In addition, the informal economy has increased in recent years, so many live off what they earn for the day and use it to buy food.