The Herald reports:
Five years ago, when Hugo Chvez was President and Venezuela was a much different place, Ana Margarita Rangel could still afford to go to the movies and the beach, or to buy the ingredients she needed to bake cakes.
Even three years ago, when the country’s economy was beginning a severe contraction, Rangel earned enough for an occasional treat such as ice cream. Now she spends everything she earns to fend off hunger. Her shoes are tattered and torn, but she cannot afford new ones. A tube of toothpaste costs half a week’s wages.
“I’ve always loved brushing my teeth before going to sleep,” said Rangel, who lives in a hillside slum 40km west of Caracas and works in a cosmetics factory in Guarenas city. “Now I have to choose so I do it only in the mornings.”
Imagine that – have to work three days just to but a tube of toothpaste.
Rangel earns the minimum wage, as does 32 per cent of Venezuela’s workforce. That used to mean something in the country with the world’s largest oil reserves. But 700 per cent annual inflation and chronic shortages of food and medicine have changed the meaning of Venezuela’s “minimum” in painful ways.
It is enough to buy just one-quarter of the food needed by a family of five in one month, according to the Centre of Documentation and Analysis for Workers, an independent advocacy group. It is enough for only about five cartons of eggs. At the country’s informal exchange rate, the raise brings the average worker’s income to roughly US$33 per month. That is far below the minimum monthly wage in neighboring Colombia – about US$250 – or even Haiti, where it is US$135.
The Government can and does set whatever minimum wage it wants. But the exchange rate is not something they can control and hence if the economy is not strong the relative minimum wage falls.