By Jay Forte, Contributing Reporter
RIO DE JANEIRO, BRAZIL – Despite the financial troubles facing the country, Brazil’s federal government announced that as of January 1, 2017 the minimum wage will increase to R$937.00 per month (US$287.89), which corresponds to R$4.26 per hour or R$31.23 per day. In 2016 the monthly minimum wage was of R$880.00 (US$270.38).
The decree with the new minimum wage was signed by the President of the Republic, Michel Temer, and is published in today’s Official Gazette (December 30th). In a note released yesterday, the Ministry of Planning, Development and Management reported that the readjustment means an increase of R$38.6 billion in salaries in 2017.
This figure represents 0.62 percent of the Internal Product Gross Domestic Product (GDP) and, according to the government, will have “positive effects on the resumption of consumption and economic growth throughout the year.”
The monthly new minimum wage is R$57 higher than the current one, but was R$8.8 below the R$945.80 that had been proposed in August by the federal government. On December 15th, the National Congress approved the General Budget of the Union for 2017 establishing the new minimum wage in the amount of R$945.80.
In the official announcement of the lowered amount, the government explained the reason for the change. The justification was that the National Consumer Price Index (INPC), which is used to calculate the readjustment of the minimum wage, and was lower than originally forecast.