By Pasqualina Curcio on November 2, 2020
Since the start of the Economic Recovery and Prosperity Plan in August 2018 until today, the purchasing power of the salaried class in Venezuela has fallen by 99%. The cause has been repeated countless times since we warned, in 2015, about the attack on the Bolivar as a weapon of economic war. It has to do with the rapid increase in prices that, only from August 2018 to September 2020 has been of 1,708,388%, consequence, in turn, of an induced depreciation of the Bolivar in the framework of a criminal attack on the currency of 866,567% for the same period. Meanwhile, the minimum wage decreed by the National Executive has only increased by 20.102% during the same period.
You don’t have to do a lot of math to know that if prices go up and up and wages remain frozen, they will reach less and less. Raising wages is urgent. This is the income of 95% of the population that works in Venezuela.
Both the Constitution of the Republic (CRBV) in its article 91, and the Organic Law of Labor, Workers and Women (Lottt) in its articles 98, 99 and 100 are very clear. More than reforming them, it is a matter of complying with them. Article 91 of the Constitution states: “The State shall guarantee workers in the public and private sectors a minimum living wage that shall be adjusted each year, taking as one of the references the cost of the basic basket.”
We have calculated the cost of the basic basket to date: we took the cost of the food basket published up to 2014 by the National Institute of Statistics (INE) and updated it with the inflation published by the BCV up to September 2020. The basic basket, which includes other goods and services besides food, is calculated following the methodology of the INE, that is, multiplying by two the cost of the food basket.
It is the case that the cost of the basic basket is 18 times higher than the minimum wage (including the food allowance). The salary should be at least 15 million bolivars, equivalent to the half petro promised in August 2018, and not 800,000 BsS. Today the petro is equivalent to 29,697,253 Bs.
In order to increase the purchasing power of the salaried class, two core measures are necessary: 1) increase the nominal minimum wage, 2) control hyperinflation, which is equivalent to fighting the attack on the Bolivar.
Resources to increase nominal wages can come from three sources:
By constitutional mandate, the issue of monetary policy is the exclusive and mandatory responsibility of the Central Bank of Venezuela which, under the monetarist dogma, since August 2018 instead of increasing the amount of money to counteract the effects of hyperinflation by giving priority to the salaried class, has done the opposite. According to its own data, the real amount of money has decreased 83% since the beginning of the Economic Recovery Plan.
In this regard, Article 131 of the Lottt establishes that “Labor entities must distribute among all their workers, at least fifteen percent (15%) of the liquid benefits they have obtained at the end of their annual exercise (of their earnings). This obligation shall have, with respect to each worker, as a minimum limit, the equivalent of 30 days’ salary and as a maximum limit, the equivalent of 4 months’ salary”. These are the famous extra money workers receive at the end of the year.
This article envisages that the bourgeois will give back to the worker what he has alienated in the social process of work by not giving back the value of his labor force. However, we suggest that the next deputies of the National Assembly review this article.
In the first place, 15% is not enough, especially if we want to advance towards socialism and we want to reverse the gross levels of profit in which the average income of capital is 68 times greater than that of a wage earner. We propose to bring it up to 85%.
Second, it is necessary to eliminate the 4-month limit, since this limit contradicts the percentage, even that of 15%. In our country, on average, 4 months of profits is equivalent to only 8% of the profits of the bourgeoisie, not even 15%.
This proposal not only seeks to do justice to the employee, but also to diminish speculation to the extent that any increase in prices that translates into a profit will necessarily be returned to the worker.
As for the second measure that we consider to be central and strategic to recovering purchasing power, we refer specifically to stopping hyperinflation and the attack on the bolivar, we must say that it is also, by constitutional mandate, the exclusive and obligatory responsibility of the Central Bank of Venezuela (BCV). Article 318 of the CRBV states “The fundamental objective of the BCV is to achieve price stability and preserve the internal and external value of the monetary unit. The monetary unit of the Bolivarian Republic of Venezuela is the Bolivar”.
Furthermore, the BCV is obliged to account for its actions, policies, goals and results not only to the National Assembly, but to the entire people (Article 319 CRBV).
We suggest that the candidates for deputies for the Polo Patriotico request the information from the BCV. We Venezuelans want to know what measures are being taken and will be taken by the highest monetary authority to stop hyperinflation, to combat the criminal attack on the Bolivar, to reverse the advance of the enemy’s currency (the US dollar), to defend the Bolivar and therefore, our sovereignty.
Source: Ultimas Noticias, translation Resumen Latinoamericano, North America bureau