Minimum wage will complete 4 years in a row without real increase

posted on 09/03/2022 06:00

(credit: Thiago Fagundes/CB/DA Press)

An important reference for low-income workers and retirees from the National Social Security Institute (INSS), the minimum wage will complete four years in a row without receiving a real increase, that is, without gaining purchasing power. The Annual Budget Law Project (Ploa), forwarded by President Jair Bolsonaro (PL) to Congress last Wednesday, predicts that the national floor will rise from the current BRL 1,212 to BRL 1,302 in January 2023.

The increase, however, is only nominal, and not real, since to calculate the minimum value, the economic team of Minister Paulo Guedes only used the estimate of inflation measured by the National Consumer Price Index (INPC) for this year. , of 7.41%. Until 2019, the first year of Bolsonaro’s administration, the floor was corrected by a rule that considered the INPC plus the variation of the Gross Domestic Product (GDP) of two years before. The objective was to guarantee the appreciation of the minimum and improve income distribution. Since then, the correction has been ugly just based on the INPC.

More than 36 million Brazilians, according to data from the Brazilian Institute of Geography and Statistics (IBGE), receive the minimum wage. In addition, the floor influences, directly or indirectly, the level of other remuneration. Thus, its value is extremely important for a large part of the population, especially in a context of skyrocketing food prices, products that consume most of the income of the poorest. Essential items of the basic basket, such as milk, for example, accumulated a high of 57% in the first half. In the same period, French bread increased by more than 10% in the general average for the country.

(photo: pri-0309-salary)


The minimum, however, has an important weight in public accounts. About half of INSS retirees and pensioners, for example, receive the minimum wage, which is also a reference for defining the salary bonus and unemployment insurance, for example. In a text that accompanies the Budget Guidelines Law (LDO), which serves as the basis for the preparation of the Budget, the government states that each R$ 1 increase in the minimum increases public spending by R$ 389.8 million. Considering the proposed readjustment for 2023 at Ploa, the impact of the next readjustment would be just over R$35 billion.

Because of this, there is disagreement among economists on how to readjust the minimum wage. According to Evilasio Salvador, professor at the Graduate Program in Social Policy at the University of Brasília (UnB), the proposal sent by the government to Congress is “regrettable”.

“Since 2016, the minimum wage has been stagnating, and it is a kind of beacon of wages in the economy. It has a direct impact on income distribution and redistribution. And it is fundamental for the poorest, even more so in a scenario where you there are 33 million people starving”, he observed.

Regarding the impact on public accounts, Evilasio argues that the increase in the purchasing power of wages would inject more money into the economy, since the expenses made by workers in this income bracket end up being made within the country itself. “The economic gain is extremely positive, because it has a multiplier effect on the generation of employment and income in the economy and, therefore, also on tax collection”, he explained.

The 47-year-old housewife and resident of Estrutural Domingas Conceição receives only a minimum wage from the INSS. Even though she is exempt from energy, water and gas vouchers, she says that, with two children to take care of, it is difficult to keep the bills up to date and food on the table. “Even not paying many bills, it’s very heavy to support yourself with just that amount, because you have to wait for promotion to do the shopping, otherwise we’ll go hungry. It’s like that”, she said.

For highway collector José Teixeira, 36, a resident of Ceilândia, it is difficult to maintain a good standard of living with only R$1,212, even more so for those who need to pay rent, as is your case. “If you consider all the expenses, it’s difficult, because the value is very low. Just with the rent, half of the salary is already paid, and then, with the food expenses, it’s really not possible”, he said.


For the economist and professor at the State University of Campinas (Unicamp), Geraldo Biazoto, the Ministry of Economy was right to change the calculation of the minimum wage. He highlighted that a high increase could cause problems for Social Security, as occurred in some previous years, when the GDP variation was higher.

“This greatly unbalances the Social Security accounts. Because, in fact, there is a set, a very large number of people who earn a minimum wage as a retirement, pension or disability benefit. So, you have to be a little careful not to throw a pile of expenses in the social security set”, he warned.

“The country has to decide a lot before deciding on a new increase in the minimum wage, on the one hand. On the other hand, there is no way to penalize a country that has such a mess of public finances, and we don’t know which one will be.” the club that comes in January and February. So, I think this readjustment is the least that can be done”, concluded the economist.

*Intern under the supervision of Odail Figueiredo

The article is in Portuguese

Tags: Minimum wage complete years row real increase

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