Criticism of the minimum wage increase announced on Friday has continued to come in through the weekend. Miranda state governor Henrique Capriles called the salary increase “salt and water”; a seamless and total dissolution of money into the country’s inflation.

Capriles explained:

The increase lag behinds inflation. In other words, salaries don’t keep up with the [rising] price of food in supermarkets, which results in a loss of real income for our workers. This is where the popular saying which so graphically explains our situation comes from: ‘In our country, salaries take the escalator while inflation takes the elevator.’

While Maduro announced a salary increase of 30% on Friday (20% effective immediately with the other 10% effective July 1), unofficial figures put monthly inflation rates this year in the ~11% range.

Since the Banco Central de Venezuela no longer publishes inflation data with any kind of regularity, it is difficult to estimate the country’s current rate. However, unofficial sources agree that inflation has probably risen nearly 50% since January 1 of this year, making the 30% salary increase worthless.

Capriles also criticized the government’s current salary policy, which appears to be to gradually increase the minimum wage several times per year. For Capriles, the fact that the comparatively small increases are dwarfed by inflation means that the policy is useless, and that instead:

… the solution is to make an adjustment [to the minimum wage] that is above the rate of inflation so that at the end of the day we have an inflation rate that doesn’t lessen our workers’ real incomes.

More generally, Capriles also criticized the government’s reliance on the oil industry and called for a diversification of the Venezuelan economy. Capriles also took at what he calls a salary policy that “drowns” certain workers by pointing out that while an army general can earn Bs. 40,000 per month, a school teacher only earns Bs. 8,000.

El Nacional: Increase Not Enough to Buy an Arepa

El Nacional has pointed out in an article published today in which it puts the salary increase – which amounts to Bs. 59.97 per day – into perspective.

The article points out that the increase is not enough to buy an arepa (a staple Venezuelan dish), which now cost “at least Bs. 150”. The increase is also not enough to purchase a cachito (a popular kind of croissant), which the newspaper claims cost around Bs. 70; a bag of onions is also out of reach, costing approximately Bs. 80.

Anabella Abadi, an economist with ODH Grupo Consultor, told El Nacional:

When a country has such a high inflation rate as Venezuela does, it’s natural to increase the minimum wage. However, it must be understood that increasing salaries in and of itself does nothing to protect wages. President Maduro has already increased the minimum wage eight times [since coming to office] but he has not protected it; to protect it, he must protect [the salary’s] purchasing power.

Abadi also suggested that a way to help solve the issue of inflation would be for the Banco Central de Venezuela to stop printing money without the backing of international reserves.

La Patilla pointed out in an article published today that the 30% increase still falls woefully short of the estimated average cost of the nutritious food basket. The article points out that the basket is estimated to cost Bs. 21.575 in Puerto Ordaz and Bs. 22.997 in San Felix, meaning that the salary increase will only cover approximately 34% of the cost.

Venezuela Falls 21 Spots in Press Freedom Index

Reporters Without Borders published its 2015 World Press Freedom Index today. Venezuela fell 21 spots since the last publication, placing it at 137 out of 180 countries.

Finland, Norway, Denmark, Netherlands and Sweden round off the top five spots, while Canada ranks 8 and the United States 49.

At 137, Venezuelan ranks below Afghanistan (122), South Sudan (125), and United Arab Emirates (120).

On Venezuela, the report states:

It was a bad year for the Venezuelan media. The country’s economic and social crisis had a disastrous impact on freedom of information. Many local and foreign journalists were the targets of threats, insults, physical attacks, theft, destruction of equipment and arrests during a succession of protests. The Bolivarian National Guard was mainly responsible, but protesters and small paramilitary groups were also sometimes to blame. And the harassment of journalists and media was not limited to demonstrations, either. The media lack pluralism while continuing to be extremely polarized between government supporters and opponents.

Public Hospitals Facing 95% Scarcity

The president of the Federacion Medica de Venezuela [Venezuelan Medical Association], Douglas Natera, said today during an interview on Televen that the country’s public hospitals are experiencing a scarcity rate of 95% when it comes to even the most basic medical supplies. Natera said:

The health situation in the country is well known by anyone who has had to go to a hospital (…) clinics don’t even receive the dollars they need to replenish [stocks], nevermind the hospitals. A private institution donated some preservatives, but they’re being held up in customs. A lot of medicine comes from Cuba.

Aside from the problem of scarcity, Natera said that the physical conditions in which doctors work in public hospitals are sometimes dangerous:

Working in hospitals is very risky. Lots of violent people find themselves in the facilities, sometimes under the protection of some of the directors. In some cases, a hospital’s director is not a doctor, which translates into aggression and abuse of power against the staff.

In the historic Vargas Hospital they don’t accept emergencies and they don’t do overnight shifts because of the insecurity.

Natera said that the extra risk associated with working in public hospitals has resulted in 12,830 medical staff leaving public institutions, with 7,830 of them choosing to leave the country since 2003. When it comes to private institutions, Natera said, some 2,500 medical personnel have left Venezuela. For this flight, Natera partially blamed the poor wages doctors make:

[A resident doctor] begins to work for Bs. 5,800. How can you survive on that? It’s absurd. You can round that up to about Bs. 9,000 by [taking extra shifts], which you have to do on weekends and holidays.

Questions/comments? E-mail me: invenezuelablog@gmail.com

One thought on “05.03.15: “Salt and Water”

  1. Pingback: 05.05.15: Cinco Heroes | In Venezuela

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