At some point, you have to come up for air for having your head in the sand for so long. Last week, Venezuela decided to mandate a 3,000 percent minimum wage, which President Nicolas Maduro reportedly did to shore up political support. The payout is a joke: around $20 a month. That’s it. To make matters worse, the mandate caused companies to lay off scores of workers due to the increased overhead (via Bloomberg):
Venezuelan workers who earned a pittance are now earning a slightly larger pittance, thanks to a big increase in the minimum wage. What they may not have are jobs.
…7 million employees are guaranteed 1,800 bolivars a month -- worth about $20 at the black-market rate. President Nicolas Maduro intended the mandate as political boost, but it’s having the opposite effect as companies, already hit by Venezuela’s epic economic contraction, tell workers they can’t afford to keep them.
Caracas garage owner Marcos Vizcaino, 56, said the increase was the final blow for the family business of two generations. He said the scarcity of spare parts, a sclerotic tax bureaucracy and hyperinflation had already complicated matters and resulted in less than a customer a day.
“I already told my four employees to go find other jobs,” he said. “I’ve decided to close. There’s no need for me to keep to losing money for a third year in a row.”
Whatever could go wrong in Venezuela has gone wrong. There’s not enough food; people are eating out of garbage cans. In some cases, zoos are being broken into and its animals killed and stripped for meat. Children are now resorting to prostitution to get basic grocery items. Doctors, teachers, and other professionals are also resorting to such methods to get food. Toilet paper is a prized possession, as basic items are lacking. Inflation is through the roof. This nation prided itself in being an example of 21st century socialism. It’s a total wreck of a country.