Venezuela: Maduro Gov’t Announces May Day Bonus Increase, Maintains Wage Freeze

Caracas, May 5, 2025 (venezuelanalysis.com) – The Venezuelan government increased monthly incomes for public sector workers and pensioners on the occasion of International Workers’ Day.

On April 30, President Nicolás Maduro announced that the “economic war bonus” earned by state employees would rise from US $90 to $120 per month. Combined with food bonuses, the move hiked the public sector’s minimum income by 23 percent, from $130 to $160.

Pensioners will see their monthly bonus rise from $40 to $50, while public administration and state company retirees will receive $112. The amounts are paid in Venezuelan bolívars (BsD) but are pegged to the daily exchange rate set by the Venezuelan Central Bank.

“This is an important adjustment, because the latest sanctions against our oil industry had the goal of strangling all our revenues,” the president said in a televised broadcast, referencing the Donald Trump administration’s recent escalation of coercive measures aimed at cutting off oil income.

“I’m going to sign a decree to solidify our income policies and maintain the indexation of bonuses,” Maduro added. 

The Venezuelan leader went on to announce a new, “unified bonus” that will benefit an estimated 5 million families via the digital Homeland platform created in 2017 to distribute bonuses and other social benefits. However, he did not specify its amount.

The latest increase underscored the Maduro administration’s favoring of non-wage bonuses over salaries. Venezuela’s minimum wage remains at 130 BsD per month, around $1.5 at the current exchange rate, and has not been updated since March 2022.

Trade unions have long criticized the government’s policy, claiming it benefits the private sector. They have pointed to the minimum wage freeze and devaluation, the violation of labor rights, such as vacation pay and severance pay, and the exemption of private companies from social security contributions.

Leftist organizations have likewise argued that the bonus-over-wage policies contravene the Venezuelan Constitution and labor legislation.

Tony Boza, a Venezuelan economist and Socialist Party legislator from Zulia state, criticized the government’s economic approach for prioritizing private sector interests and the freezing of salaries to control inflation.

“Policies have included accepting the business sector demands and burning oil revenues at forex tables,” he wrote. “The recovery of wages is subordinated to the taming of inflation.”

For their part, business guilds have been open in lobbying for new remuneration schemes that reduce labor costs for employers. Following the latest announcements, Fedecámaras President Adán Celis stated that he wants workers to “earn more but without burdening enterprises” with costs such as social security contributions.

The Maduro government has prioritized inflation control following a sustained period of hyperinflation in order to stabilize the economy and secure private sector investment.

Inflation fears return

The recent ramp-up of US sanctions against Venezuela, including the withdrawal of Chevron’s license to operate in the country, has heightened economic instability.

Venezuela’s currency has steadily slipped in recent months, with the USD-BsD exchange rate more than doubling since November. The Venezuelan Central Bank has continuously devalued the Caribbean nation’s currency while a parallel marker continues to grow. On Friday, May 3, the official exchange rate stood at 1 USD to 88.64 BsD, while the black market rate registered 1 to 109.2. The black market rate historically played a large role in Venezuela’s hyperinflation crisis and is still often used by some retailers to set prices.

Venezuelan currency devaluation has historically correlated with inflation, with price increases again accelerating after hitting 12-year lows toward the end of 2024. 

While the Venezuelan Central Bank has not published inflation figures since October 2024, the opposition-funded Venezuelan Finance Observatory (OVF) has registered double-digit monthly inflation in four of the last five months. Accumulated 12-month inflation stood at 99 percent at the end of March.

Despite the renewed uncertainty and US threats, the Maduro government has vowed that the economy will continue its recent growth trend.

Last week, the Venezuelan Central Bank (BCV) reported a GDP growth of 9.3 percent in the first trimester of 2025 compared to the same period last year. The financial authority stated that the country’s economy grew by 8.5 percent in 2024 and that it has registered growth in 16 successive quarters.

The BCV’s report contrasted with the OVF’s claim that GPD contracted by 2.7 percent between January and March.

Edited by José Luis Granados Ceja in Mexico City, Mexico.