Authorities proposes a minimal wage of R$ 1,294, with out actual enhance for the 4th 12 months

The government of Jair Bolsonaro (PL) on Tuesday (9) sanctioned the LDO (Lei de Diretrizes Orçamentárias), which provides for a minimum wage of R$1,294 in 2023, an increase of R$82 compared to this year. 1,212), or 6.8%. If the value is confirmed, it will be the fourth year in a row without real adjustment – ​​that is, above inflation – for the national floor. The sanction was published today in the DOU (Diário Oficial da União).

In July, the government revised its forecast for this year’s inflation, from 7.9% to 7.2%. To follow this expectation, the readjustment of the minimum wage for 2023 should be around R$ 87, to R$ 1,299. Economists consulted by the Central Bank also forecast inflation above 7% for 2022.

Paraguayans enter Brazil to buy cheaper gas and food

In the last 12 months, the IPCA (Broad Consumer Price Index) — the country’s official inflation — has already accumulated a high of 10.07%.

Is value already official? The proposal for the 2023 minimum wage must be included in the PLOA (Annual Budget Bill), to be sent to Congress by August 31. Until then, the value of R$ 1,294 can still be changed. In 2021, for example, the LDO provided for a minimum of BRL 1,147; in the PLOA, the proposal was R$ 1,169.

The effective value of the minimum wage in 2023 will only be released at the end of the year.

What does the law say? According to the Constitution, the government is obliged to correct the value of the minimum wage so that at least the purchasing power of the worker is maintained. Therefore, the adjustment is based on the INPC (National Consumer Price Index), which has accumulated a high of 10.12% in the last 12 months. But the R$ 1,294 initially proposed represents an increase of only 6.8% compared to the minimum for 2022, of R$ 1,212.

The last time the national floor was readjusted above inflation was in 2019, when it went from R$954 to R$998. Since then, there have been three years — 2020, 2021 and 2022 — without a real increase in the minimum wage.

Inflation and elections may change final value

The official value of the minimum wage for 2023 will only be known at the end of the year because that is when the government adjusts the so-called residual, that is, the differences between forecasts – which can vary up or down – and inflation, from fact.

In addition, the result of the October elections may also influence the value of the floor next year. A document revealed by Folha de S.Paulo with the guidelines for Lula’s (PT) government plan, the current leader in the polls, shows that the former president wants to resume the previous policy of valuing the minimum wage, if elected.

How was it before? From 2011 to 2018, the national floor was corrected based on the inflation of the previous year, measured by the INPC, and on the variation in GDP (Gross Domestic Product) of two years earlier. This formula was intended to ensure that the minimum had a real increase—that is, above inflation—every year.

The exception was 2017 and 2018. In these two years, the readjustment of the floor considered only the INPC, since the GDP of 2015 and 2016 fell.

Readjustment in 2022 also did not offset inflation

In 2022, the readjustment of the minimum wage was also below inflation. This happened because the government, when establishing the value of R$ 1,212, used an INPC of 10.02% as a base, but the indicator remained at 10.16% in 2021.

With this lag, the federal government stopped spending R$ 255.4 million this year, since the minimum wage is used as a reference for Social Security, salary bonus and unemployment insurance, in addition to the BPC (Benefit of Continued Provision ).

First government to leave minimum worth less

Bolsonaro should be the first president of the Republic since the Real Plan to end the government with a minimum wage with less purchasing power than when he started. In these 28 years, no president has delivered a more undervalued national floor, whether in his first or second term. The information is in a report released in May by the broker Tullet Prebon Brasil.

Source: Uol