VENEZUELA : Inflation and Unemployment fall, Minimum Wage Rises in Venezuela

www.venezuelanalysis.com/news.php?newsno=1956

Inflation and Unemployment fall, Minimum Wage Rises in Venezuela

Wednesday, May 03, 2006

Venezuela’s economic boom has continued into the first part of 2006, with consumer inflation and unemployment down, and a 10 percent minimum wage hike.

Consumer inflation, which in Venezuela is measured in Caracas, was 0.6 percent in April, less than half that of the same month last year, and down from last month according to number released yesterday from Venezuela’s Central Bank.

The drop is due mostly to the small increase in the price of goods subject to price controls, which halved since last month, said a press release from the Bank. Non price-controlled goods fell from 0.8 to 0.7 percent. April’s inflation rate brings inflation for the first trimester of the year to 2 percent, the lowest since 1988.

March unemployment fell to 10.1 percent, from 13.5 percent in March last year, according to a statement released by the National Institute of Statistics INE. Unemployment has been steadily falling through the year, from a high of 12,9 percent in January. According to the release, the President of the INE, Elías Elijuri, said that unemployment may fall to 7.0 percent by the end of the year. Already, unemployment numbers are reaching lows not seen in many years. Generally, however, employment rates rise in December, as the Christmas bonuses of many employees, which are equivalent to several months pay, give the economy a boost.

The 10.1 percent unemployment rate represents 1.2 million unemployed people. April unemployment figures have yet to be released.

Last Friday, the president’s office put through a series of decrees increasing wages. The first announced a minimum wage hike of 10 percent, to go into effect this September. This will bring the minimum wage up to Bs 512,325 monthly, around $200. According to americaeconomia.com, Chavez has increased minimum wage 20 to 30 percent a year since 2000. While self-employed individuals will not be affected by the change, public and private sector employees, including urban, rural, domestic, and office workers will be, regardless of the number of employees their employer employs.
The salaries of public school teachers will also be increased 40 percent in the coming year, 30 percent in May, and an additional 10 percent in October. This will affect approximately 460,000 active and retired teachers.