Monday, 2 May 2016

Venezuela Raises Minimum Wage Amidst Inflation

Caracas: In what came across as a welcome relief, the Venezuelan government announced on Sunday that thousands of workers in Venezuela will receive a pay rise of 30 percent as the country’s socialist government works towards improving its deteriorating economy.
The introduction of the minimum wage is aimed at calming tensions caused by runaway inflation and food shortages. President Nicolas Maduro’s government has been rocked by protests in response to the crisis and demands from the country’s opposition to stand down. Maduro said: “We made this to defend the Venezuelan people against the unconventional economic warfare led by the right-wing opposition to destabilize the country.”
The leader said that as of May 1, the minimum wage will jump to 15,051 Bolivars per month (US$1,505), while the monthly food ticket to 18,585 Bolivars (US$1,858). This is the 12th increase made by Maduro.
The government, which models itself on the leftwing ideology of its late leader Hugo Chavez, still has significant support among the country’s poor. However, even the most dedicated supporters are feeling the pinch these days. Many have turned to government-sponsored, self-sustaining programmes to deal with the shortages.
Venezuela has been hit by the plunge on oil price. The price per barrel of crude oil has dropped from US$108 to under US$35, a drop of nearly 75 percent. 
This situation has affected Venezuela’s economy as oil revenue is needed to provide everything from basic services to the continuation of the social programs. 
However, the government of President Maduro has refused to implement austerity in order to protect people, but the drop has undeniably impacted the overall economy.

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