Brazil’s minimum wage ranks 15th in Latin America, despite raise

RIO DE JANEIRO, BRAZIL – Latin America has felt the consequences of the Covid-19 pandemic in several economic sectors. Unemployment, escalating inflation and currency devaluation were among the damages caused by the crisis. Consequently, the population has seen the purchasing power of the minimum wage plummet in the past few years.

In Brazil, the government’s initial proposal sent to Congress was for a minimum wage of R$1,169 (US$214.3) for 2022. However, adjustments were required due to higher than expected inflation. Ultimately, the amount was set at R$1,212. Based on the average week recognized by the Consolidation of Labor Laws (CLT), of 220 hours, the working hour amounts to R$5.51.

At the current exchange rate, the Brazilian minimum wage is equivalent to about US$224, with an hour of work at US$1.01. Among the 20 Latin American countries, it ranks 15th.

Only 5 countries are below Brazil in this respect:

Dominican Republic – US$205;
Nicaragua – US$125
Cuba – US$79
Haiti – US$74;
Venezuela – US$1.52.

The Venezuelan case is the most critical. Since the floor was announced in May 2021, the country’s purchasing power has slumped 30%. Currently, the hour worked is worth only US$0.006.

According to Venezuela’s Teachers Federation Documentation and Social Analysis Center, the price of the basic food basket in the country is US$340. That is, the local population would need 156 minimum wages to buy a basket of basic goods.

COSTA RICA HAS THE BEST FLOOR

At the other end of the ranking is Costa Rica, with the highest salary floor in Latin America. The local government sets different values for each type of worker, but even the lowest set for workers in unskilled occupations is US$514. The value of an hour worked is US$2.33.

According to the National Institute of Statistics and Censuses, the price of the Costa Rican basic basket is US$51.2. By way of comparison, the Brazilian basket is more than twice as expensive, sold at US$126.7.

In 2nd place comes Uruguay, with a minimum wage of US$434, and an hour worked at US$1.97. In 3rd and 4th place, respectively, are Ecuador, with US$425, and Chile, with US$420.

COUNTRY/SALARY

Costa Rica US$514

Uruguay US$434

Ecuador US$425

Chile US$420

Guatemala US$405

Paraguay US$329

Bolivia US$314

Argentina US$307

Panama US$290

Honduras US$287

Mexico US$257

Colombia US$252

El Salvador US$243

Peru US$242

Brazil US$225

Dominican Republic US$205

Nicaragua US$125

Cuba US$79

Haiti US$74

Venezuela US$2.17