Venezuela Hikes Minimum Wage 30 Percent Amid High Inflation

Tuesday, 29 Apr 2014 11:02 PM

 

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CARACAS — President Nicolas Maduro announced on Monday a 30 percent increase in the minimum wage and pensions to protect Venezuelans from inflation nearing a 60 percent annual rate.

Maduro blames soaring consumer prices on an "economic war" launched by foes of his socialist government, frequently lambasting business executives for alleged price-gouging, hoarding and speculating.

Critics, though, say Venezuela's endemic inflation problem is evidence of the failure of 15 years of socialist economics under Maduro and his late predecessor Hugo Chavez.

"Now, because of the May 1 celebrations, I have decided to increase the minimum national salary and pensions by 30 percent to levels that will defend the quality of life of our people," Maduro said at a meeting with workers' leaders in Caracas.

Maduro, 51, a former union leader who narrowly won an election to replace Chavez last year, announced there would be three May Day workers' rallies in Caracas on Thursday.

Student opponents are also planning protests as part of a three-month campaign of street demonstrations against Maduro.

Tuesday's wage hike followed a 10 percent increase in January and puts Venezuela's minimum salary at 4,251 bolivars.

That is equivalent to $675 at the lowest official currency rate of 6.3 bolivars to the dollar, but just $65 at a black market rate quoted on illegal web sites.

Monthly inflation accelerated to 4.1 percent in March, which the government attributed to the impact of anti-Maduro street protests that have blocked roads and led to violence killing at least 41 people since February.

The annualized inflation figure topped 57 percent in February, but the government did not publish that figure for March. Private economists estimated it at about 59 percent.

Opposition leader Henrique Capriles sharply criticized Maduro's salary raise measure as inadequate to keep pace with inflation.

"Almost all the nations in Latin America are growing, with one-digit inflation and real improvements, except for our Venezuela," he said via Twitter. "Reason ... The failed Castro-communist model that the government insists on applying."

Opponents say Chavez and Maduro have both been heavily influenced by the communist rule of Cuba's Castro brothers.

© 2014 Thomson/Reuters. All rights reserved.

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