Venezuela to hike minimum wage 15 per cent amid high inflation

CARACAS (Reuters) – Venezuelan President Nicolas Maduro announced yesterday a 15 per cent increase in the minimum wage starting in December to protect workers from inflation of more than 60 per cent.

Maduro blames soaring consumer prices on an “economic war” launched by foes of his socialist government, frequently accusing business executives of 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.

“I have decided to accept this proposal, from the workers, to decree a 15 per cent rise in the minimum salary from Dec 1,” Maduro said during a televised event with workers.

Maduro said the cumulative raise for 2014 – following a 30 per cent hike in May and 10 per cent in January – would compensate for inflation caused by the “criminal” campaign against him.

The wage hike planned for December would put Venezuela’s minimum salary at 4,889 bolivars. That is equivalent to $776 at the lowest official currency rate of 6.3 bolivars to the dollar, but just $49 at a black market rate quoted on illegal web sites.

In the last data available, Venezuela’s annualized inflation rate reached 63.4 per cent in August, with consumer prices rising by 3.9 per cent that month, according to the Central Bank.