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News: Economy | Labor and Workers' Control

Minimum Wage Set to Rise Once Again, Says Venezuela’s Chavez

Mérida, April 7th 2011 (Venezuelanalysis.com) – On Wednesday Venezuelan President Hugo Chávez announced plans to raise the country’s minimum wage “within the coming days,” promising “justice” for working families. Chávez made the announcement days after popular pressure was raised on the issue by Venezuela’s National Workers’ Union (UNETE) and Communist Party (PCV). Meanwhile, Venezuela’s Central Bank announced economic growth figures for the first quarter of 2011 (January – March), affirming the country’s Gross Domestic Product (GDP) rose by 3 to 4% - at least double the 2% increase expected for the year.

Speaking to reporters during a ceremony at Fuerte Tiuna – a large military base located within Caracas city limits – Chávez detailed his plans to raise the country’s “minimum wage and pensions for each of the different sectors of national life: teachers, military personnel, doctors, and each of them have their own rhythm.”

The government’s overall objective, said Chávez, is for the Venezuelan people to “have an ever-improving and integral salary.”

“This isn’t just about monetary income,” Chávez said. “It’s about a number of things: cheap vehicles, sufficient and affordable food, economic and high-quality housing, [access to] credit, and pensions that are adequate and just.”

As part of Wednesday’s ceremony, Chávez announced the launching of seven new Venezuela-based transportation companies (established by combining public and private capital) before going on to consign 667 personal vehicles to public employees at a 40% reduction in price. 

Chávez also called on Venezuelans to avoid being confused by the opposition, “who are proposing a 100% increase,” reminding people that during previous governments all that was offered by government spokespeople were, “pensions of misery and frozen salaries.”

Following a 20% minimum wage increase in 2007, a 30% increase in 2008, and a 20% rise in 2009, the Chávez government raised the national minimum wage by 25% in 2010, bringing the total monthly amount to BsF 1,223.89 (US$ 284.62), the highest in all of Latin America.

The final minimum wage amount is an important figure in Venezuela society, since it is used as a baseline from which to calculate the salaries of public school teachers (who receive three minimum wages) and the amount received by pensioners.

“At last 40% Increase,” say Unions & Communist Party

Venezuela’s National Workers’ Union (UNETE), which late last month called a national march on Caracas to manifest their “critical support” for the Chávez government, has in recent days intensified its demands for a wage increase and a radical shift away from what they deem Venezuela’s “dominant economic model (of Capitalism),” which serves only serves to reproduce “conditions of inequality and social injustice.”

In an open letter to the Venezuelan Ministry of Work and Social Security titled, “UNETE Proposals for the Consolidation and Protection of the Integral Social Salary,” the union’s national leadership recognized the “important but not sufficient” gains made by working people under the Chávez government, citing Central Bank figures inflation figures (60.47% over the last two years) to demonstrate the ongoing deterioration of living conditions for the Venezuelan majority.

UNETE is calling for a 40% increase in the national minimum wage (from BsF 1,223.89 to BsF 1,713 per month), and proposes that for those Venezuelans currently earning more than one minimum wages, a scaled percent increase be established. For those earning two minimum wages, UNETE proposes a 35% wage increase; for three minimum wages, 30%; four minimum wages, 25%; five minimum wages, 15%; six minimum wages, 10%; and finally, seven minimum wages, 5%.

UNETE also called on the Ministry to set up a Permanent Commission, with decision-making authority, to “consolidate and protect” an integral social salary. The commission, as proposed by UNETE, would be comprised of representatives from the ministries of health, housing, education, food and nutrition, light industries, transportation, energy and petroleum, and would encourage “workers protagonism” by including elected representatives from trade unions, labor organizations and movements.

The union also called for the immediate enforcement of wage limits set on public officials, as is stipulated in the Salaries, Pensions, and Retirement of Senior Officials of Public Power Law passed by the National Assembly in December of last year.

On Monday, lawmaker Oscar Figuera, Secretary General of the Venezuelan Communist Party (PCV) proposed a wage increase that very much resembles the UNETE proposal.

Under the PCV proposal, workers earning one to two minimum wages would obtain a 40% increase, while those earning more than two but less than three would see a 35% increase to their wages, and so on and so forth using the same UNETE percentages (40, 35, 30, 25, 15, 10, and 5).

“This is a declining increase, which attempts to be more just with a working class that currently receives the least amount of salary,” said Figuera.

The PCV is also developing a legislative proposal that stipulates a permanent increase in the country’s minimum wage, as well as improvements in collective bargaining rights and greater control of workplace decision-making as it relates to production costs, profits, and final costs to consumers.

Growing Economy

According to Venezuelan Central Bank (BCV) figures, Venezuela’s Gross Domestic Product (GDP) rose between 3 and 4% in the first three months of 2011. During the same period last year, the country’s GDP suffered a decline of 5.2%.

On Thursday, BCV President Nelson Merentes confirmed that Venezuela’s national economy “is evolving better than was expected” and reiterated the Central Bank’s prediction that overall growth in 2011 will level out at 2%, a break from two years of decline.

Merentes associated the elevated GDP to both public and private spending on infrastructure, an increase in international trade, higher oil revenues than expected, and a swell in housing developments in response to last year’s ravaging floods that left hundreds of thousands of Venezuelans homeless.  

Published on Apr 8th 2011 at 10.27am