Venezuela's minimum wage hiked again — to $9.80 a month
The far left has touted raising the minimum wage as a panacea for the U.S., bucking these days for $18 an hour, if not their more loudly called for $15.
Let's take a look at the Mother of Minimum Wage Hikes, socialist Venezuela, which has raised its minimum wage three times this year — and more than 20 times since 2018.
According to MercoPress:
Venezuela's Bolivar fell 17% against the US dollar from less than a week ago, leaving minimum monthly pensions and wages at around US$ 9.20, it was reported in Caracas Friday. Set at 130 bolivars in March, incomes went down 69% this year.
On the official market, the US dollar rose 20%, from 11.69 bolivars to 14.12 bolivars, according to the Central Bank of Venezuela (BCV) while the greenback sold for 18.26 bolivars (from 13.78 bolivars the previous week), a 32% increase of 32% in one week, according to the Monitor Dólar Venezuela website, whose quotation is used for most informal transactions, meaning a 24% devaluation.
As per the new figures, the income of Venezuelans has dropped 69%, thus sinking from US$ 29.68 to US$ 9.20, below the World Bank's extreme poverty threshold.
They've hiked and hiked and hiked, supposedly as a solution to the hyperinflation engulfing their country — and all they have left is $9.80 a month, total, for those at the bottom of the career ladder. Anyone above it makes just a little bit higher, but it's no match for what prices are doing in that hellhole.
While that whopping $9.80 a month is indeed a Cuba-style wage, matching the Venezuela's Cuba-style economy run by Castro operatives, it's not a crappy wage applied to a completely price-controlled economy, as is the case in Cuba, where the prices of goods are low (and sparse), too.
According to an article in MercoPress that ran a year ago:
The price of the food basket has reached its historical maximum of US $ 343.75 for a family of 5, with a variation of 12.77% compared to September's US $ 304.83.
The items with the greatest variation in prices during October was entertainment (19.2%), followed by education (11.8%) due to the return to face-to-face schooling; transport (11.3%) and alcoholic beverages (10.5%).
Here's the real story of what's going on with prices in Venezuela:
Today, I measure inflation in #Venezuela at a punishing 262%/yr. With Pres. Maduro at the helm, Venezuela's economy has tanked. The only way to save VNZ's economy is through a #CurrencyBoard, like the one I proposed in 1995, when I was Pres. Caldera’s advisor. pic.twitter.com/8Q86c7f3mO— Steve Hanke (@steve_hanke) December 10, 2022
You would have to have some kind of dollar income to survive in those economic conditions, if you didn't live by absolute thievery or drug-dealing on the side, as some also do.
Any questions as to why Venezuelans are now flooding Joe Biden's open border? They're desperate for any kind of dollar income to send to their families back home. Millions have already poured in, and millions more are on the way, crossing the swamp of death, on foot, dead bodies littered all around them in Panama's dreaded Darien Gap, so we can expect more of them now that Venezuela's prices continue to skyrocket and incomes continue to plummet, despite those many, many, many minimum wage hikes.
The scary part is that the inflation isn't about to stop. That's because minimum wage hikes, and, for that matter, increased oil production, which Venezuela is doing, have nothing at all to do with why inflation happens. Nothing.
Here's why inflation happens, with the fourth-world communists running that hellhole stoking that inflation hotter:
Venezuela's performance is the result of a "very bad economic policy management" that was unable to capitalize on the increasing price of oil worldwide due to the war in Ukraine, according to Professor José Manuel Puente, a Venezuelan economist teaching at a Madrid university.
Puente also told EFE that the overall conditions were not so terrible as to account "for Venezuela to be experiencing these terrible exchange imbalances with terrible impacts on wages."
In the last few months, the Venezuelan government increased spending and further issued more bolivars instead of doing just the opposite, Puentes explained.
Economist and university professor Ronald Balza Guanipa concurred: The Central Bank has increased "the issuance of bolivars for government spending" in "activities it is carrying out at this moment" that are unknown, in addition to the payment of Christmas bonuses to public sector employees. The BCV has also reduced the sale of foreign currency with which it had been feeding the supply to contain the exchange rate.
Yep, it's government spending — printing, spending, printing, spending — with just those pathetic minimum wage hikes to check it, proving that minimum wage hikes are no match for go-go government spending.
What do Venezuelans get for it? Nine eighty a month now, a poverty level below that of even the world's least developed countries. This, in a country that once had the highest standard of living in all Latin America and drew immigrants from every corner of the globe.
Now it's a rubble and a ruin, with the best economic opportunities involving a crossing at the Rio Grande river.
It's an abject lesson for the rest of us that minimum wage hikes do nothing to stop inflation — if anything, the increased government spending to pay a lot of them actually drives inflation higher. Joe Biden doesn't understand this any more than Venezuela's filthy dictator, Nicolás Maduro does, but the rest of us can see the result. If not, perhaps we can ask one of the Venezuelans crossing in from the Rio Grande illegally what might just be happening with prices and wages in that country. The results didn't blow in out of nowhere. They were the result of just those policies Democrats seek more of in this country.
Image: Pixabay mp4, screen shot, Pixabay license.