Last year, your salary was Bs.100. And you could buy a sack of potatoes for Bs.100. This year, a sack of potatoes costs Bs.130. And your salary went up to Bs.125.
So, did you get a pay hike?
In economic terms, not at all. Your salary buys 2.4% fewer potatoes now than it did a year ago. When dinnertime comes, you won’t be in any doubt: you took a pay cut.
So why do Venezuelan journos – even the ones that work for hardcore opposition papers – fail to call bullshit on Chávez’s “minimum wage hike” announcement?
Sigh…at least the rat gets it.
Caracas Chronicles 
Well, we all know how deficient is the math in most of the population, including journalists (it’s well known that Statistics I and II are the bane of too many ComSo students). But still, too many people are too thrilled on the “Wheee! A shiny big Raise! And Obligatory Cesta Tikets!” to stop and think “waaaaaaaait a minute, is this raise really as good as the Walking Wart is saying to us”.
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That specific article is not the problem. That’s just a short note about some statements of the president. It’s kind of annoying that the media put on the first page everything the guy says, but that’s more or less what you expect from any newspaper.
What I found worrisome is the lack of additional content analyzing the raise and its efficacy. I assume they are preparing probably something more thorough, or perhaps the opinion articles are for online paying readers. I don’t know.
El Universal doesn’t do it any better:
http://economia.eluniversal.com/2011/04/26/nuevo-salario-minimo-cubre-969-de-la-canasta-alimentaria.shtml
Well, I guess it’s up to you and other bloggers to give us what’s missing…
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Simpler than that (and more understandable):
Venezuela imports a good fraction of it’s food supply (and everything else). A product sold wholesale and for export in US dollars, imported to Venezuela, will be resold wholesale in BsF. There you have an exchange rate. There are also more fungible commodities like gold. Or very specific articles of which you happen to know the market price, in Venezuela and other places.
That same, “real” rate of exchange can be applied to the minimum wage. To see what value it has in US dollars. At the same exchange rate effectively used for imports. (not CADIVI fantasy, not the black market rates).
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It’s the original stuff that makes them vulnerable to being closed down… Self censorship in the works.
—
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That in itself is not illegal. To deduce an exchange rate from prices quoted in different currencies of a commodity. What was illegal was to offer currencies, as there is an ad-hoc (like arbitrarily established) State monopoly. Then, they made it illegal even to tell anyone that the dollar cost, in certain places, say XXXX BsF.
Oh, there is the danger that the salaried serfs realize how deeply screwed they are. So they would probably interpret this bad law creatively to get at anyone telling them just that.
But you are right, it’s not like it matters, that something is expressly forbidden or not. It’s that in Venezuela (and that was before Chavez appeared too!) people become wary of doing anything different lest the usual parasites show up with a display of self importance. Of course, there’s bribes for the low profile stuff; when a “civil servant” stops your activities for no reason at all, or invents one out of the air because he/she is having a bad day and/or wants money for a couple of beers, or a bottle of whiskey, or a new car.
Personally, I realize: Venezuela is no longer a Republic. Rule of law died long before that (long before Chavez, anyway). A law establishing exchange controls and a State monopoly (on anything under the Sun!, currency sale included) is in itself laughable and below contempt.
If you ask me what Venezuela needs first of all, I would tell you, ironclad, no-excuses-or-pretexts-ever protections for personal rights and property.
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You’re just nitpicking here. There’s a difference between absolutes and relatives. The absolute value of the minimum wage went up, while its usefulness relative to the value of the stuff you’d want to buy went down. Might as well mention the last devaluation while you’re at it, if you really want to compare current purchasing power vs last years’.
But if you really want to nitpick, you’re better off mentioning that only the minimum wage went up, which is pretty meaningless for those self-employed informal workers (over 50% of the workforce), and doesn’t, in the strick sense, imply a raise for those currently making above minimum wage.
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I’m gonna go out on a limb here and guess that you don’t make ends meet in Venezuela on a minimum wage salary.
I’m pretty sure that Juan Pablo Pueblo DOES care that even with the minimum salary raise he still can’t provide for his family. No nits to pick in his world, he doesn’t really care if the devaluation this or the economy that. If he can’t make ends meet on what he makes he’s pissed and no two ways about it.
Of course, with that raise in wages comes the raise in prices, and so the vicious circle goes on and on. The fact that it will be in two parts sucks even worse. Many businesses are going to raise prices ( or at least try) based on the total figure now, instead of waiting for each raise to come into effect. Guess what will happen when the second one comes down the pike?
And while the raise in the minimum wage does not “legally” mean that others who make more are entitled to a raise, the practical fact of the matter is that they too will ask for a raise.
Been there, done that too many times to count.
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im going to put a Blackberry chain message my wife received,in spanish:
“sueldo minimo 2010: 1224Bsf /2.6Bsf por $ = $471.
Ahora en el 2011,despues de 1 año:
Sueld minimo 1550Bsf / 4.3Bsf por $ = $360.46
23% menos!!! Gracias Sr.Presidente, muchisimas gracias por seguir dandonos razones
para sacarlo en el 2012!!”
I think people may or may not be getting the scam but you know, la patria won’t let them see the truth.
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And if you are someone earning a middle class professional salary of 3-5 thousand Bs.F, your salary has not gone up even close to 25% in the last year. So, Venezuelans are becoming more “equal” every year… equally poor, that is.
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Except that some “are more equal than others”, right?
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Heh. 3-5K?
I wish.
My old salary was 1.6K bolívares. The tiny room I rent is 600 bs. 5K is the highest paid professor in the university. 15 years until you get there. I was never a professor, just a researcher., but the junior professors still do not get 2K.
When you are a fucking professor and you can’t move out of your parent’s house, do not wonder why so many of my friends and coworkers are going away from Venezuela. I am leaving partially this summer.
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Geez…you could rent such a room in a German city for that amount of money, but I believe you would be earning quite a bit more.
I checked shortly before I last went to Venezuela about some hotel in a place to relax in the mountains of Western Carabobo, not that I planned to sleep there in a hotel, as I have relatives there but I was just curious. Prices were similar to pricey Switzerland…with the little difference that in Switzerland you don’t have to be scared to death about reaching the place on time less thieves get you on the road.
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Brain drain? or Brain vacuum pump?
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Talking about innumeracy….
http://www.eluniversal.com/2011/04/26/produccion-pesquera-disminuyo-1136-en-2010.shtml
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Dude! They throwing fish back to the sea! awesome!
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[bangs head repeatedly on desk]
why coño why?!??!?
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(test data from 1998)
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This story is just one of many that fails to get any proper analysis in the mainstream media. I find it difficult to remember any important story not emanating from Tal Cual that got the attention it deserved.
The problem for Venezuela is that basic government decisions are not being called to account, and in many cases aren’t even reported (i.e. more funds to FONDEN). Thankfully at least FT is on the case!
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If there is one thing I find puzzling is the lack of perspective in Venezuelan media. I also find strange how they fail to use something European/US/Colombian/Chilean newspapers are using for over a century now:
CHARTS, simple CHARTS showing a problem.
You really don’t need to have more than primary school to understand a simple chart, particularly if the parameters are things you know about: murder, price and not something like weird financial products’s share development. On just needs the general context. Charts are an eye popper.
I kept writing to Notitarde asking thjem to show charts of murder in Venezuela/Carabobo and they did it once many years ago but only to compare one year to the other, not to compare Venezuela across many years and less to compare Venezuela with the rest.
You can do it in a jiffy.
They could create a chart in a couple of minutes with inflation and salary increases. They could do the same with the Human Development Index and how we REALLY stand compared to neighbouring countries (four L.A. countries have passed us since 1998).
Where on Earth did they study?
And let’s not talk about political matters…when I see the Globovision or VTV (worse) people asking questions to the politicos:
Do journalists and politicians in Venezuela get from Condorito their economic and political background?
Well, perhaps it is this: Venezuelan journalists are representatives of Venezuelans, who really really really live extremely on the hic et nunc basis.
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