https://www.whatsnextvenezuela.com/news/chavez-raises-minimum-wage/

On Saturday, during a televised cabinet meeting, Chávez announced that the minimum wage in Venezuela would be raised by almost a third. The statement came mere hours before Chávez boarded a late-night plane back to Cuba for more radiation treatments.

The 32.25 percent pay increase is scheduled to take place in two stages – 15 percent on May 1 and 15 percent on September 1. However, the timing of this announcement – and of the pay increases themselves – is hardly incidental.

The May 1 increase may give Chávez a much sought-after bump in popularity in the short-term, and the second increase, on September 1, will come just weeks before the October 7 election. Not to mention the announcement had the added effect of changing the media’s focus, albeit briefly, away from the continuing saga of Chávez’s health.

While Chávez has a practice of instituting a pay increase to coincide with International Workers’ Day on May 1, inflation consistently outpaces any increase in wages. Case in point: Chávez increased the minimum wage by 26.5 percent in 2011, but the inflation rate was 27.6 percent that year. Luis Vicente León, president of polling firm Datanálisis, said the actual increase in workers’ buying power will be minimal because of inflation. While the 32.25 percent wage adjustment this year actually exceeds the 25 percent inflation rate forecast for 2012, León said this was politically motivated: “It was clear that the government was going to be more aggressive in increasing the minimum wage in an election year.” He also noted that the impact on production costs will be considerable and the hike in labor costs will hit investment.

Jorge Roig, Vice President of the Venezuelan Federation of Chambers of Commerce (Fedecámaras), expressed the same concerns in an interview with Radio Union News, noting “the salary increase will be diluted … with inflation” and “the government’s strategy has been thoughtless.” Back in May 2011, the last time the Venezuelan government increased the minimum wage, Washington Post blogger William J. Dobson commented:

“[Chávez’s real goal] is to inject enough short-term cash into people’s wallets to raise his chances for reelection in 2012. Never mind that that cash will disappear from their wallets as the minimum wage hikes fail to keep pace with inflation. Indeed, Chávez’s newly announced measures will make inflation worse. But he isn’t concerned with that. As he told a crowd this week, ‘I have a year and a half more in this government, then six more in the next one.’ That is Chávez’s main consideration.