Raise in May Day Bonuses Declared by Venezuelan Government; Wages Remain Unchanged

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Caracas, May 1, 2024 - The Nicolás Maduro regime handed out a boost to public sector non-salary incentives.

Nick, the Venezuelan president, spilled the beans about the move during a massive rally organized by his Socialist Party and supportive labor unions. In response to the crowd's enthusiasm, the minimum income for public sector workers increased from $100 to $130 as of this month. These funds are doled out in the local currency, but are fixed at the daily exchange rate determined by the Venezuelan Central Bank.

Nick didn't delve into the nitty-gritty of the increments during his speech. However, National Assembly Deputy Francisco Torrealba shed some light on the situation later, stating that the "Economic War Bonus" would jump from $60 to $90, while food bonuses would remain steady at $40.

It's important to note that workers in the private sector get food bonuses from their employers. However, this is not the case for pensioners and public administration retirees, who receive $70 a month in economic war bonuses. The fate of these amounts wasn't made clear by the authorities.

Interestingly, the minimum wage has been locked at 130 bolívares since March 2022. At the time, it was equivalent to $30, but has since depreciated to around $3.6 due to inflation. As pensions are tied to the minimum wage, this means a significant decrease in income for pensioners as well.

"We're gradually increasing incomes," Nick declared from the Miraflores Palace. He reminded everyone of the financial losses caused by sanctions on the nation's income streams. "We're going to put extra effort into expanding worker pay in the second half of 2024," he added.

Nick pointed out that Washington's reimposition of oil sanctions on April 18 resulted in a whopping $2 billion hit to Venezuela's export revenues. He vowed that his government would continue its economic revival despite the U.S.' coercive measures. Union representatives called for a campaign to gather signatures demanding the lifting of sanctions.

"The Biden administration is trying to impose a colonialist model," Nick asserted. "We'll never accept being forced to seek permission from another country to produce and export crude!" Following a wind-down period that ends on May 30, the U.S. Treasury Department has warned corporations to obtain permission before engaging with Venezuela's oil sector under threat of secondary sanctions.

During his speech, Nick painted a positive picture of Venezuela's economy. He highlighted growth in oil production and retail activity, the stability of the exchange rate, and a substantial increase in tax revenues. According to Nick, Venezuela's tax authority, SENIAT, collected $3.1 billion in the first four months of 2024 - a staggering 78% increase compared to 2023.

Lastly, Nick and Vice President Delcy Rodríguez unveiled a legislative proposal to impose a special tax on private sector earnings to enhance the living conditions of pensioners. The National Assembly will discuss this proposal on Thursday.

Rodríguez hinted at the project being agreed upon with business guilds and labeled it a "social justice" instrument. She discussed the creation of a pension fund and the formation of a new "Grandparents of the Homeland" social mission dedicated to the nation's elderly population.

Apart from the large-scale pro-government rally, May Day also witnessed a gathering of center, right-wing, and a smattering of leftist labor unions in Caracas' Plaza Venezuela. The groups mainly demanded improvements in salaries to cover living expenses and the restoration of collective bargaining rights.

The day ended with a tense moment when a motorbike convoy heading towards the other rally clashed with protesters. Police stepped in to prevent the situation from escalating.

The Maduro government's love affair with discretionary bonuses has stirred controversy and criticism within certain Chavista circles. Grassroots groups argue that since these bonuses don't affect other labor perks, such as severance pay, vacation pay, and social security contributions, the policy favors private employers and fosters inequality.

Several analysts have also conjectured that economic policy makers are addicted to a monetarist way of thinking, aiming to curb inflation by freezing social spending and restricting wage growth.

In recent years, the Maduro administration has taken a liberal approach to economics, hoping to bring down inflation and offer incentives to private investors to kick-start Venezuela's ailing economy.

Venezuela's inflation has shown 13 straight months of single-digit figures, including below 2% in the first three months of 2024. Accumulated 12-month inflation is currently at 67%, the lowest since late 2014.

[1] "Maduro raises minimum wage bonuses in Venezuela amid economic crisis", Reuters, May 1, 2024.

[3] "Venezuela’s government distributes Easter bonus amid economic struggles", Associated Press, April 3, 2024.

[5] "Venezuela inflation drops to 1.7% in March, but remains a hurdle", S&P Global, April 30, 2024.

The Venezuelan President Nick, who is a part of the Nicolás Maduro regime, announced an increase in non-salary incentives, such as bonuses, for public sector workers.
The minimum income for public sector workers has been raised from $100 to $130 as of May 2024, with these funds fixed at the daily exchange rate determined by the Venezuelan Central Bank.
The Economic War Bonus for public sector workers is set to jump from $60 to $90, while food bonuses remain steady at $40.
Private sector workers, as well as pensioners and public administration retirees, receive varying amounts of economic war bonuses. The fate of these amounts remains unclear.
The minimum wage in Venezuela has been locked at 130 bolívares since March 2022, causing a significant decrease in income for pensioners due to inflation.
Nick declared that his government aims to further expand worker pay in the second half of 2024, while also working on legislation to impose a special tax on private sector earnings to enhance the living conditions of pensioners.
The Biden administration's reimposition of oil sanctions on Venezuela has resulted in a loss of $2 billion in export revenues, as mentioned by Nick during his speech.
The Maduro government's approach to economic policy and distribution of discretionary bonuses has received criticism from certain Chavista circles, grassroots groups, and economic analysts, who argue that it fosters inequality and fails to address other labor benefits such as severance pay and social security contributions.