Venezuela Increases Minimum Monthly Wage

Nicolas Maduro (president of Venezuela) announced an increase of the minimum wage for workers in Venezuela linked to the petro. Maduro announced that the new salary value would be half of a petro (the national cryptocurrency) which is currently worth nearly $59. This is almost 1,800% more than the amount of seven Venezuelan bolivars before (VES strong>).

To build “Sustainable Recovery”, Minimum Wage to be Increased

Nicolas Maduro (President of Venezuela) announced an increase in the minimum monthly wage for Venezuelan workers. Maduro said that this remuneration would now be half of a petro. This is the national cryptocurrency that is backed by oil and other resources. Maduro made the statement at the II Workers’ Congress where he spoke to state workers.

Maduro addressed the issue of the monthly salary rise.

Because it is dependent on national income, the minimum wage is the most pervasive and enduring wound. We have a plan that I present to you for the recovery of minimum wage and all other wage tables as well collective contracts.

According to the official Petro page, the new monthly salary would be approximately $29.10. Maduro didn’t announce the date when the increase would take effect. He did however state that many workers already earn more than the newly announced minimum wage. He explained:

Many street salaries, especially in the private sector are around $100 to $150. This is because they sell in dollars, collect dollars, and pay taxes. We have a better tax collection than ever before.

Doubts and the New Petro Push

Maduro is not the only one to inform the public about a minimum wages increase linked to the national cryptocurrency. Maduro announced in 2018 a wage increase that would bring the minimum monthly wage up to half a Petro, or 1,800 VES. But, the Venezuelan economy was affected by devaluation. The wage was kept at the same VES price, which reduced its purchasing power.

Local media have expressed doubts about the application of the Petro Peg. They are unsure if Venezuela will pay the wages according to the dollar value or if it will be used only as a temporal unit. Maduro did not mention the possibility of workers being paid directly with petros through national banks.

This is part of the renewed petro push the national government is trying lead. Payouts and transactions in dollars will not be affected by the new tax, which affects payments in all currencies except those issued by the government. Maduro spoke out about the new role for the petro:

It will enable us to access new international financing sources for the country (…)’s economic and social development.