04.30.18: Bs. 1,000,000

During a televised address today, Maduro announced that he was ordering an increase to the minimum monthly salary effective tomorrow, setting the measure at Bs. 1,000,000. When combined with the monthly food subsidy, Venezuelans earning the minimum monthly income will receive Bs. 2,555,500 at the end of each month.

The last time that Maduro increase the minimum monthly salary was in March of this year, when the figure was set at Bs. 1,307,646. Today’s increase represents a jump of 95% in the minimum monthly income.

Venezuelan workers calculate the minimum monthly income using two measures: the value of their salary, and the value of their cestaticket, a food subsidy that workers receive each month.

To put the salary increase in perspective, National Assembly deputy Julio Borges shared an image today of the price of a whole chicken in a supermarket somewhere in the country. The price of the chicken–Bs. 3,991,700–is 43.9% higher than the minimum monthly income.

In today’s announcement, Maduro said that the monthly salary was set at Bs. 1,000,000, while the cestaticket value was set at Bs. 1,555,500. While workers can spend their salary on any commodity they wish, cestaticket payments can only be spent on food. Only workers earning the minimum monthly salary are given the cestaticket subsidy.

Maduro said that the increase to the salary was part of Chavez’s legacy and his love for the workers of Venezuela. He said:

In revolutionary times–now more than ever–the constitutional policies that Chavez propelled and that I have deepened is about taking care of the working class above all, take care of the generation of jobs and keep them as high as possible [sic]…

The dramatic increase to the minimum monthly salary is a testament to the severity of the inflation crisis affecting the country. While the Banco Central de Venezuela (BCV) no longer publishes inflation statistics, the National Assembly as well as foreign and domestic financial institutions keep track of the measure.

According to the National Assembly, the inflation rate shot up 67% in March alone, and that the rate for first three months of 2018 sits at 453.7%.

The hyperinflationary spiral means that today’s announced increase, like those that have preceded it, will be rendered wholly ineffective within a matter of days.

Maduro Blames “Speculators” For High Prices

Doubling-down on his denial of the inflationary crisis crippling the Venezuelan economy, Maduro said during the same address that he would seek to punish the speculators which he claims

… have submitted us to the most brutal economic attack in terms of prices that we’ve known in 100 years.

Maduro said that these speculators are operating “a plot  “from Miami [and] Colombia”, and that they are directly responsible for the daily rise in the prices of good and services.

Maduro Threatens Supermarket

Maduro also threatened the country’s supermarkets against increasing the prices of their products. Maduro said:

I’ve given an order to the executive vice president of the Republic, to the whole network of supermarkets and stores (…) that they be given an ultimatum. After May 20, I’ll still be president, [and] if you continue to increase prices like crazy, you’ll have to answer to me. I’ll make justice. I’m giving you one last chance…

Maduro’s comments display a fundamental misunderstanding of basic economic realities, and simultaneously reflect one of his regime’s main arguments for the state of the country today.

According to the Maduro regime, the country’s economic situation is the result of an “economic war”, which is a nebulous and ill-defined operation against the country conducted by a long list of enemies foreign and domestic. These enemies includes the governments of the United States, Colombia, Panama, and the European Union, as well as Venezuelan expatriates and the country’s political opposition. According to this theory, the regime’s enemies work together to increase prices in Venezuela and starve the country of goods.

Regime critics claim that after 20 years in power, chavista corruption and poor management have reduced Venezuela’s economy to ruin.

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