Analysis of the Historical Minimum Wage in Venezuela

The fall in the Venezuelan economy does not stop. For approximately 6 years, the indicators began to show an alarming decrease in economic activity, a slowdown in the productive apparatus, destruction of basic companies and a drop in oil production that directly affect the Gross Domestic Product and therefore the quality of life of the population has been negatively affected.

One of the correction policies implemented by the executive consists of increasing the minimum wage, which has caused a devastating effect on the internal economy, causing inflation and devaluation of the national currency, El Bolivar.

At least four minimum wage adjustments have been made annually from 2013 to 2018 for a total of 30 increases in that period.

At the end of 2020, there were two official increases: in January and in May, both were swallowed up by inflation even before going into effect.

Prorate with respect to the US Dollar

During the last years the salary remained between 1 and 5 dollars a month, but in 2020 the decrease was even greater, since the national currency suffers a constant devaluation, placing the Venezuelan minimum wage at 0.90 USD by the end of September 2020 when the dollar It was trading at 444,823.76 Bolívares / Dollar.

September 2020
Salario mínimo = 400.000,oo
Dolar = 444.823,76
Salario en Dólares = 400.000,oo / 444.823,76 = 0.899 usd

The new minimum wage increase from October 2020 placed the wage at 2.69 usd, to be totally destroyed in less than 3 months.

October 2020
Minimum salary = 1.200.000,oo
Dolar = 444.823,76
Salary in Dollar = 1.200.000,oo / 444.823,76 = 2.69 usd

December 2020
Minimum salary = 1.200.000,oo
Dolar = 1.204.338,52
Salary in Dollar = 1.200.000,oo / 1.204.338,52 = 0.99 usd

Historical behavior of the dollar in Venezuela.

_Source

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Download Historical Dollar Quotation in Venezuela, period July 2010 to February 2021 (Excel File)

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Undoubtedly, this year is the one with the worst results for the wages of Venezuelans, 2020 was the year of job destruction. Once again, corruption and illicit enrichment wreak havoc on the purchasing power of Venezuelan workers and all Venezuelan families, since the current economic policy seeks to destroy employment and private companies, in exchange for maintaining high levels of imports that they substitute national production. These imports are made without comptroller and with gross markup.