Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

Venezuelan President Raises Minimum Wage and Unemployment

  by    0   0

In his weekly radio address to his citizens, Venezuela’s post-Hugo Chavez leader, President Nicolas Maduro, announced he would raise the minimum wage for the fifth time over the last year. The bump puts the minimum salary at 40,683 bolivars or $60 per month, according to Reuters.

The new minimum wage represents a 322% cumulative increase since February 2016 and is an attempt to protect citizens’ wages from “mafia attacks,” according to Maduro. The President attributed his country’s woes to anti-socialist political opponents and capitalists who have created an “economic war” to foment disorder and unrest.

teeth with a bolivar

Maduro’s comments are an attempt to appeal to anti-private business sentiments within Venezuela’s citizenry. Essentially, they’re a red herring designed to distract from the state-created hyperinflation that has left Venezuelans awash with cash, but little to buy. The enormous amount of cash floating around is a consequence of an effort to devalue the country’s currency with the intention of shrinking trade deficits by making exports more competitive.

Manipulating Venezuelan wages is an approach to correcting misguided socialist policies, one that will ultimately push prices higher when costs are passed on to workers.  However, the real economic harm of minimum wages is they’re destructive to labor markets by eliminating lower paying jobs. Venezuelan businesses that are forced to pay more for a worker who’s worth less than the minimum wage will look to automation or simply leave the position unfilled.

Venezuela’s unemployment rate reflects the effects of minimum wages over the last 12 months. Although the country’s leadership is known for being less-than-forthcoming with the release of economic indicators like GDP and unemployment, reports show unemployment at 7.3% in April 2016. Forecasts expect 9% by the end of Q2 and 11% by the end of 2017.

Venezuela unemployment rate graph

Until leaders like Maduro scale back regulations and market manipulations, market forces that function to balance prices and unemployment rates will continue to be ineffective to solving Venezuela’s problems.

Get Peter Schiff’s latest gold market analysis – click here for a free subscription to his exclusive monthly Gold Videocast.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!


Related Posts

Day 28: Brazen Trump Inspires Murky Global Markets

The Trump 100: His first 100 days as presidentYellen spoke to congress this week, and her remarks about the new Commander in Chief could be foreshadowing an upcoming battle between the Fed’s goals and Trump’s plan to weaken the dollar. The President also made amends with China’s President Xi Jinping, but has new problems to deal with as other foreign governments shed their […]

READ MORE →

Yellen’s Speech Balances Stable Growth with Unstable Trump

Federal Chairwoman Janet YellenFed Chairwoman Janet Yellen testified before Congress today with a hawkish tone that sent gold prices downward and bond yields upwards prior and during her testimony. Gold spot prices were down around $11/oz. toward the end of Yellen’s testimony. The 10-year note rose to 2.5% from 2.43% while the 2-year note yield jumped to as […]

READ MORE →

Day 21: Trump Begins Looking Into Financial Regulation Reform

The Trump 100: His first 100 days as presidentTrump’s third week in office brings us a look into rolling back financial regulation reforms, the power of the @POTUS’s tweets, and the new Department of Education director. New Executive Order Likely to Target Dodd-Frank This week, Trump signed an executive order calling for a review of financial regulations. Many Democrats are concerned the audit […]

READ MORE →

US Silver Eagle Sale, as Low as $2.59 Above Spot

SchiffGold is having a special promotion on 2017 US 1 oz. Silver Eagles. Silver prices have already gone up 11% since the beginning of the year. Get in on the ground floor of one of the safest havens for protecting your wealth. Secure these exclusive coins while there’s still time. Offer details: • All Silver […]

READ MORE →

Why Silver Prices Will Rise with Trump’s Stimulus Plan

pile of silver coinsSilver prices have been climbing steadily recently, rising almost 12% since the beginning of the year. The cost of silver is normally closely tied to the rise and fall of the price of gold, which has also seen a recent jump. Causes for the push in precious metals include a sluggish dollar, political and economic […]

READ MORE →

Comments are closed.