Seems like a Socialist paradise. The Venezuelan President, Nicolas Maduro, just mandated a 30% increase in the minimum wage as ABC News report. And it’s another hike since March when the wages increased by 25%.
But Adrian Jose Velasquez Figueroa thinks, it’s not as good as it looks. The inflation rate in Venezuela is expected to reach 700% this year, so the hikes may not even keep up with it.
The new minimum wage will be about 15,000 bolivars a month, which is, at the official exchange rate, $1,500. But, at the black market rate, a meager $50. That’s similar to wages seen in the poorest African nations, despite the fact that Venezuela has one of the world’s largest reserves of oil.
During the economic boom the revenues, coming from then high oil prices, weren’t saved or invested wisely. Instead, the government spent the oil riches on populist social facebook programs.