Maduro announces subsidies increase

This article has been edited from its original version, after it was confirmed that the minimum wage is not increasing, but subsidies are rising by USD 30.

During his May 1st speech, Venezuela’s President Nicolas Maduro announced an increase of the monthly minimum income, while salaries will be left untouched. The USD 60 “economic war” subsidy will increase to USD 90, which alongside a USD 40 food stamp subsidy will amount to USD 130.

This measure will affect around 5 million public sector workers and 6 million retirees and pensioners. The announcement has been confirmed by labour minister Francisco Torrealba.

The minimum wage is still VES 130 (which is currently USD 3.56 at the official central bank rate) since March 2022. Many expected the minimum wage to increase to about USD 100 on May 1st, given that Venezuela is entering a presidential race.

According to the Venezuelan Finance Observatory, an NGO, the average monthly wage in the Caracas Metropolitan Area is just over USD 200—considering that it incorporates both lower public and higher private incomes.

President Maduro announced other measures such as building more social housing and offering holiday plans for public sector employees through state-owned hotels. 

New bill asking for employers’ contributions

On May 2nd, the National Assembly will discuss a new bill requesting employers to make “a special and monthly contribution based on their net income, to improve pensions and incomes.” So far we expect this to become a form of social security.

May Day clashes

In a historic first, the large May Day march saw significant clashes between Chavistas and workers demanding salary increases and more labour rights.

This event reflects the turn towards liberal economic policy, which has been years in the making under President Maduro, especially since 2019. Such policies helped bring down inflation and reactivate some economic sectors, but at the expense of holding down incomes and demand.