Enjoy comunism: Venezuela raises monthly minimum wage to $2.40

[Poker Player]

President Nicolas Maduro has raised minimum wage. Again:

Venezuela raises minimum wage in fourth year of hyperinflation

"The Venezuelan government increased the monthly minimum wage by 289%, an official said on Saturday, moving from the equivalent of 64 U.S. cents to about $2.40 at the exchange rate estimated by the country's central bank.

Venezuela's economy is in its fourth year of hyperinflation, its seventh year of recession, and has been slowly and disorderly undergoing a dollarization since 2019.

Labor Minister Eduardo Pinate said the minimum salary would increase from 1.8 million bolivars to 7 million bolivars as of this month.

Pinate made the announcement at a Labor Day event broadcast on state television, adding that the food bonus state workers are slated to receive would also increase.

The new base income of $2.40 plus the food bonus now represents $3.50, with which Venezuelans can buy a kilogram of cheese and a liter of milk."

So, three comments here: first, Venezuelan workers are millionaires but in terms of a crappy currency that is losing value at a much faster rate than the dollar, which is saying something. Second, with that money they can buy just a liter of milk, for the whole month. This would be laughable if it wasn't so tragic. Lastly, one can see that increases in the minimum wage have gone hand in hand with the loss of purchasing power.

I've read somewhere that he has raised the minimum wage more than 40 times since he is in power but I can't find the exact source. According to the following source, however, he raised it 21 times between April 2013 and March 2018:

President announces new increase in minimum wage (March 2018)

This is the result of measures that were sold in favor of the poor and that have ended up making them much poorer, causing more than 5 million of them to emigrate from the country:

Venezuela exodus set to top 5 million as long-term needs grow, officials say

Those who have remained in the country suffer from power outages, shortages, violence and hunger:

Venezuela Drifts Into New Territory: Hunger, Blackouts and Government Shutdown

As Venezuela Collapses, Children Are Dying of Hunger

How Hunger Fuels Crime and Violence in Venezuela

Here we can see how simple thoughts that in principle are sold as beneficial, end up being a disaster. Are there people with low wages? We raise the minimum wage. Do we need more money? Let's print more. Again, this would be laughable if it weren't so tragic. It should be remembered that Venezuela has the largest oil reserves in the world, as well as deposits of gold, diamonds and other raw materials. Well managed, this would provide the majority of the population with a more than decent quality of life. Norway, for example, with socialidemocrat governments, set up a sovereing wealth fund in 1990 to invest the profits from oil and gas exploitation, which has resulted in the world's largest fund from which all its citizens benefit.

I would like to finish saying that I hope the Venezuelans will do well in the future, but I think they are in for a tough time.

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[The Sceptical Chymist]

Lastly, one can see that increases in the minimum wage have gone hand in hand with the loss of purchasing power.

Yeah well, what do you think has been happening in slow motion in the US and other countries over the past century or more?  Prices rise, wages rise in step (sometimes).  Workers in 1906 could buy a meal at a restaurant for $0.25 but some made about $1/day.  And look at today's prices and wages in the average American city.  Anyway, it's sad to see Venezuela getting hit this hard.  The thing I'm wondering is whether Venezuelans are actually using that shitty currency or are using something more stable (like the USD or some other relatively local currency).  I can't imagine anyone there would want to save money in the form of a currency that's hyperinflating.  They'd either spend it as soon as they get it or trade it for dollars (or crypto even).

Any Venezuelans here who could shed some light as to what the reality is there?  I've asked that before in a couple of other threads about Venezuela, but I don't think I ever got any replies.  Has there been an increase in crypto adoption as has been claimed on a bunch of Youtube videos or is that just BS?

[terrorJR]

I am sure that Venezuela will be able to overcome this crisis day by day. they are starting to rise from their downturn, their leaders already know how to deal with the risks of the economic crisis that befell Venezuela. So the role and regulations that have provided an increase in wages in Venezuela become a new hope so that in the future it can be even better. there has always been a reformer from every decade of government in Venezuela. we who are outside Venezuela continue to fully support this achievement. We always hope that Venezuela will be equal with other developing countries in the future.

[mersal]

Even though the rise is too huge its still not a logical thing which is going to help the workers so government should concentrate on bringing more investment opportunities and employment opportunities then simply rising the values, again the government raised it with a single sign but who is going to pay the money the fellow citizen not the government so there should be a change should occur if they want to overcome this crisis.

[wxa7115]

Here we can see how simple thoughts that in principle are sold as beneficial, end up being a disaster. Are there people with low wages? We raise the minimum wage. Do we need more money? Let's print more. Again, this would be laughable if it weren't so tragic. It should be remembered that Venezuela has the largest oil reserves in the world, as well as deposits of gold, diamonds and other raw materials. Well managed, this would provide the majority of the population with a more than decent quality of life. Norway, for example, with socialidemocrat governments, set up a sovereing wealth fund in 1990 to invest the profits from oil and gas exploitation, which has resulted in the world's largest fund from which all its citizens benefit.

I would like to finish saying that I hope the Venezuelans will do well in the future, but I think they are in for a tough time.

This is the biggest tragedy of all, it is natural that people want to improve their standards of living but instead of doing the only way it can be done, by working hard, improving yourself and other similar measures they ask the politicians to take actions like that and since politicians care about nothing else but to get their vote and be popular they do so.

Then the people blame the politicians when things take a turn for the worse but this was not caused only by them, the people participated on their own tragedy, this is why politics should be a specific field of knowledge and a great deal of it should be dedicated to the economic aspect of running the government otherwise things like this will keep happening.

[fiulpro]

This is very unfortunate. In country like these people usually send one of their family member to work abroad. The Government is flawed and the whole economic system is more like a joke. I do think it's very much needed that the country independently starts resolving their issues, do not compare their whole system to USD or anything. Work independently, start resolving the issues of venezuela, there is serious mismanagement! The country lost their whole system due to decreasing oil production which nearly disappeared and the oil prices fell drastically at the same time the corruption needs to be controlled to a whole extent!! They are already big on bitcoins, I do think people should train more in the IT sector, start working online. Recieve their payments in bitcoins and if the Government does not make any progress then people have to start looking out for themselves and cryptocurrencies can help them in that way certainly.

[BIT-BENDER]

I think the world is more concerned with Africa, -although am an African- in terms of bad economy and suffering, butj think Venezuela is one of those countries that the citizens are living a poor standard life, I have a Friend who I chat over the phone from Venezuela and she said their power outage has gone so bad and also they use the firewood, I can't remember the last time I used it saw a firewood.

I think their present government has failed the people of Venezuela, and I had taught my country had the worst minimum wage in the world, now Venezuela is officially my worst, and  the raise of the minimum wage by that amount is a summary of the life the people are living, you have to work multiple work to run a family with such wages

[beerlover]

I am a socialist. I will never understand why people who live in capitalist societies do not consider that they are in big trouble, I mean I live in a capitalist nation and it looks like much worse than Venezuela.

If you think that the worst nations in the world are socialist ones, you might actually be right, why? Because there are dictatorships there as well, have you ever seen a socialist nation without a dictator? They will never mention the names of that.

Look at Europe, even though they are a democracy, they have all the great socialist ideas, free colleges, free healhtcare, free many things all paid with your taxes, isn't that great? Yes Venezuela is socialist, but so is France, yes Cuba is socialist but so is Norway, why not see them? Look at USA, worlds biggest capitalist nation, people die because they can't afford their insulin, that is the nation you want to be in? I rather not die from something that 1/3 of all people have, that is as insane as it gets and makes USA a third world country in my view.

[Cnut237]

I think their present government has failed the people of Venezuela

Certainly the government has to shoulder plenty of the blame. But we must also consider that to some degree the misfortune of the population is due to US intervention over the last few years. History teaches us that any leftist leader in Central or South America is simply beyond the pale, and must be dealt with, whether that's crippled by sanctions, or quite brazenly ousted by force... as we saw with 9/11.

https://en.wikipedia.org/wiki/United_States_involvement_in_regime_change_in_Latin_America

[Darker45]

I would like to finish saying that I hope the Venezuelans will do well in the future, but I think they are in for a tough time.

I also hope so, although I have a little doubt the present older generation of Venezuelans will see the end of the tunnel during their lifetime. Maduro looks young and fit. And while the opposition seems to have a good amount of influence and force, their strength seem insufficient nevertheless to unseat Maduro and replace the set of corrupt leaders.

Look at Europe, even though they are a democracy, they have all the great socialist ideas, free colleges, free healhtcare, free many things all paid with your taxes, isn't that great? Yes Venezuela is socialist, but so is France, yes Cuba is socialist but so is Norway, why not see them? Look at USA, worlds biggest capitalist nation, people die because they can't afford their insulin, that is the nation you want to be in? I rather not die from something that 1/3 of all people have, that is as insane as it gets and makes USA a third world country in my view.

How do you define socialism, then? Does that automatically follow that since a country is providing free healthcare, education, and other social services to its people it is already a socialist country? How about the fact that capitalism and democracy is actually very much vibrant in the European countries that you've mentioned like France and Norway? Or is it that both capitalism and socialism could exist side by side in a government?

[Kong Hey Pakboy]

I am sure that Venezuela will be able to overcome this crisis day by day. they are starting to rise from their downturn, their leaders already know how to deal with the risks of the economic crisis that befell Venezuela.

Yes they will if they adopt a new ccurrency which could be the US dollar but right now I don't think that it will be the case, people will have to suffer for a while with this problem that Maduro and his predecessors created. Also, how come it is a communism if the wages were increased, is it wrong to raise wages for the working class? I find it stupid that everytime the rights of the workers are being taken care for the better, it becomes a commie shit which it isn't.

[Sithara007]

How do you define socialism, then? Does that automatically follow that since a country is providing free healthcare, education, and other social services to its people it is already a socialist country? How about the fact that capitalism and democracy is actually very much vibrant in the European countries that you've mentioned like France and Norway? Or is it that both capitalism and socialism could exist side by side in a government?

The essence of socialism is very simple - steal the money from the successful people and distribute a part of it among the poor. Since the poor have a greater voting power, the political party which promises to do this will be elected to power very comfortably. Now the problem with Socialism is that, eventually they run out of money to steal from. Successful people will either migrate to other countries (similar to what happened in Cuba), or they will lose their money and become poor themselves.

[Poker Player]

The thing I'm wondering is whether Venezuelans are actually using that shitty currency or are using something more stable (like the USD or some other relatively local currency).  I can't imagine anyone there would want to save money in the form of a currency that's hyperinflating.  They'd either spend it as soon as they get it or trade it for dollars (or crypto even).

Any Venezuelans here who could shed some light as to what the reality is there?  I've asked that before in a couple of other threads about Venezuela, but I don't think I ever got any replies.  Has there been an increase in crypto adoption as has been claimed on a bunch of Youtube videos or is that just BS?

As far as I know, they use it on a day to day basis but those who can save or have previous wealth have it in USD or cryptos, following Gresham's law, spend the bad currency and save the good.

There must be some Venezuelans on the forum, but surely they don't speak good English and will be on the Spanish board.

Certainly the government has to shoulder plenty of the blame. But we must also consider that to some degree the misfortune of the population ...

From what you comment, I don't know how they can do that to pressure the government without taking into account the repercussion it has on the population but:

1) Sanctions started with Obama.
2) When they started they already had years of disastrous populist government.
3) The EU, which is more social democratic than the US, has also imposed sanctions.

I mean, sanctions don't look to me like some evil savage capitalists preventing the country from progressing.

[davis196]

The regime in Venezuela isn't communist.It's more like an authoritarian socialist,populist corrupt regime.
A real communist regime means 100% state owned command economy and I think that there's something like a private sector in the economy of Venezuela.
I wonder how Maduro and the government in Venezuela managed to survive for so long.Is it because of the support of the army and some weaponized "red militia"?I don't know.Politics in Latin America has always been weird and exotic.US sanctions have an impact over the hyperinflation in Venezuela.We can't put all the blame on Maduro. 
Anyway,when communism fails,the communists say that it wasn't "real communism".

[Cnut237]

sanctions don't look to me like some evil savage capitalists preventing the country from progressing.

US sanctions certainly do have an effect. You only have to go as far from US soil as Cuba to see that this is the case. But yes, sanctions are at the milder end of the scale.

Sticking purely to Venezuela to remain on topic...

How about US involvement in the coup of 2002? Whatever the CIA was doing behind the scenes, and however much they deny involvement, their protestations are unconvincing.

Bush Administration officials acknowledged meeting with some of the planners of the coup in the several weeks prior to 11 April but have strongly denied encouraging the coup itself, saying that they insisted on constitutional means. However, the purpose of the meetings was not clarified, and it is also not known why US officials and the Venezuelan opposition broached the subject of a coup months before the attempted ousting took place. In addition, The New York Times quotes an anonymous Defense Department official in charge of developing policy towards Venezuela as saying that, "We were not discouraging people. ... We were sending informal, subtle signals that we don't like this guy. We didn't say, 'No, don't you dare'", though he denied the Defense Department offered material help, such as weaponry.

_{https://en.wikipedia.org/wiki/2002_Venezuelan_coup_d%27%C3%A9tat_attempt#US_role_and_alleged_involvement}

Also, is it really entirely coincidental that Venezeula has the world's largest oil reserves? The US does have some history of 'interest' in countries where they can steal the oil... consider for example the 600,000 violent deaths in Iraq following the 2003 invasion.

... but I agree that this is only one aspect. Much of the fault for the current situation in Venezuela lies with Maduro, with corruption and mismanagement. Also I would absolutely agree that extreme leftist regimes are intrinsically more susceptible to corruption and authoritarianism. I'm not disputing any of this, all I'm saying is that Venezuela starts from a profound disadvantage because a) it has a leftist leader, and b) it has oil. To suggest the US has had no effect on instability in the country is I think disingenuous.

[Poker Player]

The regime in Venezuela isn't communist.It's more like an authoritarian socialist,populist corrupt regime.
A real communist regime means 100% state owned command economy and I think that there's something like a private sector in the economy of Venezuela.
I wonder how Maduro and the government in Venezuela managed to survive for so long.Is it because of the support of the army and some weaponized "red militia"?I don't know.Politics in Latin America has always been weird and exotic.US sanctions have an impact over the hyperinflation in Venezuela.We can't put all the blame on Maduro. 
Anyway,when communism fails,the communists say that it wasn't "real communism".

I would say that it is a populist, communist-inspired regime, and it is very communist today because over the years it has destroyed practically the entire private sector.

Also, is it really entirely coincidental that Venezeula has the world's largest oil reserves? The US does have some history of 'interest' in countries where they can steal the oil... consider for example the 600,000 violent deaths in Iraq following the 2003 invasion.

No, I don't think it's a coincidence. Just like I think the invasion of Iraq was done for oil.

Anyway, I think the tendency of the country to self-destruct would not have been much different even if there had been no US intervention. So we are quite in agreement.

[Cnut237]

I think the tendency of the country to self-destruct would not have been much different even if there had been no US intervention.

The fundamental problem is oil. The huge abundance of oil in Venezuela is both its blessing and its curse. If a country has one overwhelming source of wealth, then naturally it focuses on that to the exclusion of everything else. The endemic poverty in Venezuela is I believe a direct consequence of its oil wealth. Its over-reliance on oil is an example of the economic phenomenon known as the 'Dutch Disease'. For example, Venezuela produces only 30% of its own food supply.

Dutch disease is a concept that describes an economic phenomenon where the rapid development of one sector of the economy (particularly natural resources) precipitates a decline in other sectors. It is also often characterized by a substantial appreciation of the domestic currency. Dutch disease is a paradoxical situation where good news for one sector of the economy, such as the discovery of natural resources, results in a negative impact on the country’s overall economy.

_{https://corporatefinanceinstitute.com/resources/knowledge/economics/dutch-disease/}

In the '70s, when oil prices were high, the capitalist-run country was thriving.
In the '80s, oil prices dropped, and poverty hit hard. The country had bet everything on oil, and had no plan B to fall back on. There was unrest. Capitalism had apparently failed. People wanted change, and so...
In the '90s, they elected a socialist, Chavez, who would bring about a new, more equitable system of governance, end the inequality, and bring back wealth to the people.

I do believe that in general Chavez was well-intentioned, but he didn't manage Venezuela in a sustainable way. Maduro then inherited the problems of Chavez... problems which in large part Chavez inherited from the previous capitalist regime... which were due to the abundance of oil.

US involvement is part of the reason for the problems of Venezuela.
The current regime is part of the reason. Chavez is part of the reason. The capitalist regime preceding Chavez is part of the reason.
But beneath everything, oil is the cause.

[DrBeer]

An absolutely expected situation. It is a pity for people, but they themselves are the culprits of what has developed in the country now. It is foolish to build an economy on oil alone, it is foolish to elect a dim-witted populist president. I hope the population will understand that it is necessary to vote not for promises, but for logical goals. I hope that politicians will also understand that it is impossible to build an economy on oil alone. And all together will be able to "restart" the country. But if you continue to believe in the communist-socialist delirium, then you should not expect a normal life.

[bryant.coleman]

An absolutely expected situation. It is a pity for people, but they themselves are the culprits of what has developed in the country now. It is foolish to build an economy on oil alone, it is foolish to elect a dim-witted populist president. I hope the population will understand that it is necessary to vote not for promises, but for logical goals. I hope that politicians will also understand that it is impossible to build an economy on oil alone. And all together will be able to "restart" the country. But if you continue to believe in the communist-socialist delirium, then you should not expect a normal life.

I don't think that you should blame the people of Venezuela. They had two options in 2013 (after the death of Hugo Chávez). The first choice was Nicolás Maduro of the Socialist party and the second choice was Henrique Capriles Radonski (who represented the Primero Justicia party). A lot of people were scared by the religious extremism of Capriles and additionally the death of Chávez created some sort of a sympathy wave in favor of Maduro. The people voted for the least poisonous option, and that turned out to be Maduro. If Capriles was elected, then he would have destroyed what remains of the Venezuelan portion of the Amazon forest (similar to what his friend Bolsonaro did in Brazil) and exterminated the indigenous groups.

[Mauser]

An absolutely expected situation. It is a pity for people, but they themselves are the culprits of what has developed in the country now. It is foolish to build an economy on oil alone, it is foolish to elect a dim-witted populist president. I hope the population will understand that it is necessary to vote not for promises, but for logical goals. I hope that politicians will also understand that it is impossible to build an economy on oil alone. And all together will be able to "restart" the country. But if you continue to believe in the communist-socialist delirium, then you should not expect a normal life.

While building a country only on natural resources is risky, there is nothing wrong with. Look at the middle east, all their wealth is coming from oil and exporting it. The difference here is the government, in the middle east there are mostly monarchs who make sure that they become rich first, but since they get so much money they also invest it back into their own country. Building hotels and trying to attract tourists a nice source of income as well. So natural resource can be the first step to a wealthy nation, but it needs a lot of investment in other areas to become competitive.