The increase of minimum wage in Latin America was received with concern and scepticism by citizens in most of the region this 2018. They believe the basic increase is not enough to cover family basket and is lower than the increase applied to taxes and general goods prices.
It is usual that working class of any country considers the increase of monthly minimum wage insufficient. However, when analysing the general gearing of economy in a nation, it should be noted that a significant increase in monthly salaries, will represent a greater expense for industrialists, which translates into an increase in prices and higher taxes.
But this rule is not usually fulfilled by governments, which hardly increase basic wages, but rise up taxes, costs and inflation. This bad formulation is particularly valid in Latin America, where salaries remain almost static but taxes grow disproportionately, causing acquisition power loss in population and with it a decrease in economy, which in turn affects companies. So it is a balance that must be planned beyond the ideal percentages, but one that is altered by the corruption, oligopolies and political interests of a nation.
In nations such as Brazil, Colombia, Mexico, Ecuador and Bolivia, the average minimum wage will be USD $355 for 2018. The country that ranks with the highest minimum wage in Latin America is Argentina, followed by Chile and Uruguay. Venezuela, despite its 40% increase, continues to be the lowest.
Argentina closed 2017 with the second highest inflation in Latin America (21%), after Venezuela. However, it ranked as the highest monthly basic salary in the entire region. According to statements made by president, Mauricio Macri, implementation of basic salary will take place in three parts, starting in January finishing during the first half of 2018. In this nation, a worker will earn USD $544.
With USD $456 as basic salary, Chile ranks second in Latin America with the best minimum wage for workers. As of November 2017, national inflation did not exceed 2.10% and, according to analysts, it is expected to remain within that margin.
Uruguay, Ecuador, and Panama
In these countries, monthly minimum wage was defined at USD $456, USD $431, and USD $391, respectively. Although Uruguay is positioned among the first three nations with higher basic payments, inflation is also one of the highest in the region with 6.88%. Contrary to Ecuador, a country that according to the National Institute of Statistics and Census (INEC), presented an inflationary index of -0.27% in 2017.
Brazil registered the lowest increase in the region for this 2018 with an increase of 1.81%, together with inflation of 2.50%. In the country shaken in 2017 by alarming figures of common violence and criminality, an average worker will be able to earn a USD $325 monthly payment.
In this nation, minimum wage increase 5.9%, and it is only above Mexico and Venezuela. Here a worker can earn USD $265 monthly as a base salary. According to references given by the country's finance minister to local media, this increase is the fourth highest in the country in the last 18 years. With this rise, the minimum wage in Colombia is between 1.9 and 2 points higher than inflation, which is estimated to reach 4% over the course of the year.
Mexico is one of the countries with the lowest minimum wage in all Latin America. However, the government indicates that of its more than 21 million inhabitants, only 1,000 live on this wage. Thus, in Mexico, a worker who depends on the minimum wage as its monthly income will receive USD $137.
During 2017 Venezuelan government increased seven times the monthly minimum wage. Last increase of 40% placed monthly remuneration at 797,510 bolivares, corresponding to $78 dollars per month. According to statistics from the International Monetary Fund, in 2018 inflation in Venezuela will reach 2,300%. Nicolás Maduro attributes the sinking of the bolivar, the super-inflation and the humanitarian crisis, to part of an "economic war" carried out by the United States and the opposition, whose goal is to make him resign from power. However, in this war between government and the economic interests of country's opposition, the only one harmed are citizens, who can hardly feed and their life expectancy decreases as the conflict and crisis progress.
Latin American Post | Krishna Jaramillo
Copy edited by Laura Rocha Rueda