Bolsonaro Guedes and announce minimum wage increase to R $ 1.045

A provisional measure (MP) It will be issued by the president in the coming days to formalize the increase.
14/01/2020 18h36 - Updated 15/01/2020 12h51

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Agency Brazil

President Jair Bolsonaro and Economy Minister, Paulo Guedes, They announced on the afternoon of Tuesday (14), in Brasilia, the minimum wage 2020 It will be increased from R $ 1.039 to R $ 1.045. A provisional measure (MP) It will be issued by the president in the coming days to formalize the increase.

“We had an unusual inflation in December, I do not expect it to be so high so, but it was due, basically, meat, and we had to make the minimum wage was kept, then he goes, via interim measure, R $ 1.039 to R $ 1.045, from February 1”, Bolsonaro said the Ministry of Economy, Alongside Guedes. The president and the minister met twice during the day to discuss the matter.

At the end of last year, the government issued an MP with a readjustment 4,1% no minimum, from R $ 998 to R $ 1.039. The value corresponds to the estimate of the financial market for inflation 2019, according to the National Consumer Price Index (INPC), calculated by the Brazilian Institute of Geography and Statistics (IBGE). however, the value of the INPC ended up closing the year with a high top, from 4,48%, announced last week and, thereby, left the new minimum value below inflation. by law, this is the index used for the minimum wage, although the official inflation is the measure by the National Broad Consumer Price Index (HICP), which closed the year 2019 in 4,31%.

“We'll have to find the resources to do this, but the most important is the spirit that President defended, the charter, which is to preserve the purchasing power of the minimum wage”, said Paulo Guedes. Second or minister, with the new increase, the impact on public finances will be around R $ 2,3 billion, which may be offset against R $ 8 billion extra revenue provided by the government.

“We already have, I prefer not to talk about the nature of the gain, that will possibly be announced in another week, we will have to raise an additional $ 8 billion. Not tax increase, that's not it. Are sources we are looking for, we will announce R $ 8 billion that will appear, so that the increase of R $ 2,3 billion will fit in the budget”, the minister. Still he said, if you can not cover the increased expenditure in the budget to fund the minimum value, the government does not rule out some contingency.

Until last year, the minimum wage adjustment policy, passed into law, It provided for a correction for inflation plus the change in Gross Domestic Product (START, sum of goods and services produced in the country). This model was in force between 2011 e 2019. however, there was not always real increase in this period because the country's GDP, in 2015 e 2016, registered fall, with falling 7% accumulated in these two years.

The government estimates, for each increase of R $ 1 the minimum wage, expenses amounted to R $ 355,5 millions, mainly because of the payment of Social Security benefits, the salary allowance and unemployment insurance, all linked to the minimum.

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