Bolsonaro announces 10.18% increase in Brazil’s minimum wage in 2022

RIO DE JANEIRO, BRAZIL – Brazilian President Jair Bolsonaro announced Thursday his decision to raise the minimum wage in Brazil by 10.18%, from the current 1,100 reais (US$213) per month to 1,212 reais (US$234) as of January, which is equivalent to the inflation expected for this year.

“The new value of the minimum wage will be 1,212 reais,” the head of state stated in the traditional live broadcast on social networks that he carries out on Thursdays to communicate with his followers.

The conservative leader did not make any other comment on the decision, nor did he explain why the Government only limited itself to replacing inflation in the minimum wage without offering an actual increase in basic salaries.

In December last year, the ruler announced a 5.26% increase in the minimum wage, which allowed the value paid in 2021 to have a slight actual increase, i.e., above inflation in 2020 (4.52%).

In its latest quarterly report, the Central Bank raised its projection for Brazil’s inflation this year to 10.20 %, the highest rate since 2015 (10.67%). According to the latest official data, Brazil accumulated inflation of 9.26% between January and November, bringing the year-on-year rate through November to 10.74%.

Following the head of the state’s announcement, the readjustment is expected to be published on Friday in the latest edition of the Official Gazette. The new value of the minimum wage will be practical as from January 1.

According to the Intersyndical Department of Statistics and Socioeconomic Studies (Dieese), about 50 million people receive the minimum wage in Brazil, including 24 million pensioners and retirees.

Since the lower value of the benefit offered by the Social Security Institute to retirees cannot be lower than the minimum wage, raising it, by any percentage, significantly increases public expenditures and threatens the fiscal adjustment.

According to government estimates, for each real increase in the minimum wage, public expenditures increase by R$365 million (about US$65.5 million).

BRAZIL HAS THE SECOND LOWEST MINIMUM WAGE IN SOUTH AMERICA

Brazil has the second lowest value in South America; a CNN survey shows how much the minimum wage is today in several countries of the region.

The minimum wage is understood as the minimum amount that a worker must be paid, in a mandatory manner, for the activities they have performed in a certain period, according to the International Labor Organization (ILO) definition.

“The purpose of setting the minimum wage is to protect workers against unduly low pay,” the ILO explains.

In Brazil, the dollar value of the minimum wage is US$213.17 per month. It is the second-lowest among South America’s neighbors, after Venezuela – a list that includes Argentina (US$298.03), Chile (from US$282.56 to US$438.36), Paraguay (US$330.81), and Bolivia (US$313.96).