Venezuela‘s President Nicolas Maduro announced a double-edged decision on Wednesday, increasing state bonuses for public sector workers while keeping the minimum wage frozen at a mere $4 monthly equivalent, a move that may placate some but exacerbate the country’s economic challenges.
In a statement made during a meeting with oil industry workers in Caracas, after participating in a May Day rally, the leftist president proclaimed her commitment to enhancing the minimum comprehensive income of workers to $130.
The “comprehensive minimum income” comprises the minimum wage of $3.50, plus a $40 food bonus and an “Economic War Bonus” that will be raised from $60 to $90, ruling party lawmaker and former labour minister Francisco Torrealba said after the president did not give specifics.
The “Economic War Bonus” was created to counteract the effect of US sanctions against Venezuela and only applies to the 5.5 million public sector workers in the country of 30 million.
The latest hike in state bonuses for public sector workers in Venezuela comes with a crucial caveat: it doesn’t affect other benefits like unemployment benefits, pensions, or additional bonuses, which are still tied to the formal minimum wage. This wage has been stuck since 2022, when it was equivalent to $30 – a sum that has drastically shrunk to just $3.50 due to the bolivar’s devastating devaluation.
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Venezuelan union leaders are crying foul over the government’s wage “bonus” policy, but President Maduro remains defiant, blaming the country’s economic woes on crippling US sanctions.
As Maduro announced his bonus plan, the Confederation of Venezuelan Workers staged a protest in Caracas, calling for a minimum wage of $200 – a sum that would be a game-changer for the country’s struggling workers. The union, a thorn in the side of the government, is refusing to back down in its fight for fair pay and better working conditions.
The harsh reality of Venezuela’s economic crisis is starkly evident in the astronomical cost of basic necessities, with the average family forced to shell out a staggering $500 every month just to put food on the table.
Venezuela is grappling with an unprecedented economic meltdown, characterized by soaring inflation – predicted to rise 60% this year – and the bolivar’s precipitous decline. As a result, a parallel dollar economy has emerged, dominating the majority of financial
Venezuelans will cast their ballots on July 28 in a presidential election that’s already generating controversy. Incumbent Maduro is poised to seek another term, while his main opponent has been barred from the race, raising questions about the legitimacy of the electoral process.