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

(photo: 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 consecutive years without receiving a real increase, that is, without gaining purchasing power. The Annual Budget Law Project (Ploa), sent by President Jair Bolsonaro (PL) to Congress last Wednesday, provides for the national floor to rise from the current R$1,212 to R$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 the Bolsonaro administration, the floor was corrected by a rule that considered the INPC plus the change in Gross Domestic Product (GDP) from two years earlier. The objective was to guarantee the minimum appreciation and improve income distribution. Since then, the correction has been ugly only 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, the French bread increased above 10% in the general average of the country.

(photo: CB Art)


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 a basis for the preparation of the Budget, the government states that each R$ 1 increase in the minimum increases public expenditure by R$ 389.8 million. Considering the adjustment proposed for 2023 in Ploa, the impact of the next adjustment would be just over R$35 billion.

Because of this, there is disagreement among economists on how to readjust the minimum wage. According to the professor of the Graduate Program in Social Policy at the University of Brasília (UnB), Evilasio Salvador, 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. millions of people starving,” he noted.

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 Conceio 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 care for, it is difficult to keep the bills up to date and food on the table. “Even if you don’t pay many bills, it’s very hard to support yourself with that amount alone, because you have to wait for a promotion to make the purchases, otherwise we’ll go hungry. That way,” she said.

For road collector Jos Teixeira, 36, a resident of Ceilland, 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 in your case. “If you consider all the expenses, it’s difficult, because the value is very low. Just with the rent, it’s already half the salary, and with the food expenses, it really doesn’t give”, 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 benefit, pension or disability. So, I have to be a little careful not to gamble 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 big mess of public finances, and we don’t know what it 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 Economy

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