The Importance of Wages for Millions of Venezuelan Workers

Venezuelan economist Pascualina Curcio takes a look at Venezuela’s wage situation, arguing that wealth inequality has risen sharply in recent years despite a “socialist” rhetoric.


There are those who dismiss the wage issue in Venezuela as if it were irrelevant, as if it were just one among many other issues.

These commentators convey the message that there is not much that can be done to bring wages up to decent levels as long as the country remains under siege by the US. They do not propose solutions, and in response to requests for wage increases they say: you cannot distribute what does not exist, you have to produce and for that you have to work (as if we did not do that every day).

There are almost 14 million active workers in Venezuela who live off – I repeat – live off their bi-weekly salaries. According to the latest data from the National Statistics Institute (INE), 92% of the employed population belongs to the salaried class, of which 3.3 million work in the public administration. Five million pensioners also live off the official minimum wage. In total, there are 19 million people, around 63% of the population, in this bracket.

The remaining 37% include children under 15 (our offspring); more than one million unemployed; and 347,170 who, according to INE figures, are employers (they belong to the other class: the bourgeoisie).

Salaries are important both here in Venezuela and across the world because the life and quality of life of many depend on them. They determine the great inequalities that lead to poverty, injustice, hunger and misery, all in the context of an original accumulation of capital and within the framework of the social process of work.

Understanding why 1% of the world’s population appropriates 82% of what is produced (by the workers) involves analyzing how wealth is distributed in the social process of work, and how this product is divided between salary (I repeat, salary) and profit. It is no coincidence that one of the primary neoliberal proposals is the freezing of wages and the liberation of prices in an effort to increase profits (which derive from the difference between prices and wages).

Wages are not just any issue, they are a central issue. In a rhetorical discourse in which the word “socialism” is endlessly used, pushing this issue aside by repeating monetarist dogmas and affirming that no funds are available to adjust salaries is not only paradoxical but reflects a worrying ignorance about the growing inequality between wages and profit in our country. It also shows disrespect for the Venezuelan working class’s high level of consciousness as the vanguard of the anti-neoliberal struggles since 1989. This paradox grows when we take into account the degree of exploitation/profit in Venezuela, which has increased 270% in less than 4 years, as well as the legal minimum wage, which does not even cover 0.65% of the working class’ material needs.

In neoliberal times, during the Fourth Republic, specifically between 1978 and 1998, Venezuelan workers’ real wages (or purchasing power) fell 65% despite the fact that national production increased 30%. At the same time, during those 20 dark years in our economic history, the degree of the bourgeoisie’s exploitation of workers increased 205%, according to the Venezuelan Central Bank (BCV).

These trends were reversed in 1999 with the arrival of Commander Chávez and the Bolivarian Revolution. Between 2003 and 2013, real wages (or purchasing power) increased 77% and the degree of exploitation decreased 38%. During that period the economy grew 68%.

In the transition to socialism, Chávez struck at the heart of capitalism, working to distribute the surplus more fairly between workers and the bourgeoisie. The objective was to reduce the gap between salaries and profits and thus lower distributive inequality. Chávez accomplished this by first bringing the legal minimum wage up to the levels of the basic food basket. Secondly, by controlling the prices of essential goods (food, medicines) produced by large private monopolies. Thirdly and very importantly, especially in inflationary economies like ours, he adjusted the legal minimum wage whenever prices varied. This policy resulted in a 57% drop in poverty.

In 2013 imperialism intensified its economic war against the Venezuelan people. Among the weapons used is an attack on the bolivar currency through political exchange rate manipulation, which led to an induced depreciation of the bolivar of around 3.1 trillion percent since 2013. It has also led to similarly induced price increases of 63 billion percent over the same period. In this scenario, the 5 billion percent increase in nominal wages has lagged far behind the price increases. This has led to a 99% fall in the working class’s purchasing power and an increase in the degree of exploitation/profit of more than 270% in less than four years (between 2014 and 2017, surely greater if we go all the way to 2021).

According to the BCV, 36% of everything produced in Venezuela in 2014 went to 13 million workers, while 31% went to the 400,000 employers. In 2017, only 18% was distributed among the workers while the bourgeoisie took half.

Not only is 64% less being produced now than in 2014 (mainly as a result of imperialist aggressions), but the little that is produced is being distributed more unequally. The lag in nominal wages in the face of exponential price increases is seen in the deterioration in workers’ quality of life and at the cost of even greater exploitation. With purchasing power coming close to zero, it will be difficult, if not impossible, to increase production. Those who lightly dismiss the issue of wages seem to not know about or understand this inequality in the distribution of wealth.

Venezuelan workers deserve a sophisticated debate on this issue because of our high and more than proven class consciousness. We are not satisfied with the repetition of dogmas (which are incidentally monetarist) that seek to justify the non-increase in wages without offering any solution.

Wouldn’t it be nice to see the revolutionary majority in the National Assembly set a parliamentary agenda to grant priority and importance to the issue of wages that affects 99% of the population (27 million Venezuelans, including our offspring). Rather, we see a debate about the privileged concessions to be offered to a microscopic group of foreign private capitalists looking to come and “invest” in areas full of natural riches which are being prepared especially for them.

Pasqualina Curcio is a Venezuelan economist and professor at the Simón Bolívar University. She is the author of several books, including The Visible Hand of the Market: Economic War on Venezuela.

Translation by Paul Dobson for Venezuelanalysis.

The views expressed in this article are the author’s own and do not necessarily reflect those of the Venezuelanalysis editorial staff.