Thu Apr 25, 2024
April 25, 2024

Venezuela | Anti-worker and anti-popular austerity continues

Amid devaluation, the destruction of wages and the necessity of struggle.

The government promotes accelerated devaluation.

By Leonardo Arantes, of Socialist Workers United (UST, la Unidad Socialista de los Trabajadores)

After the dollar maintained a relatively moderate growth dynamic for several months, the official exchange rate in Venezuela was quoted at 8.59 bs per dollar and the parallel exchange rate at 9.01 bs per dollar on 10/30/2022. Since the last week of November, the bolivar (Venezuela’s currency) began to undergo an accelerated devaluation, which we do not hesitate to call megadevaulation; the official and parallel exchange rates are currently quoted at 15.23bs and 17.41 bs per dollar, respectively (as of mid-December 2022). This implies an increase of approximately 100% in the exchange rate if we reference the October 30th figures.

All this is a consequence of the disastrous monetary and exchange policy of Maduro’s bourgeois government, which, since the first trimester of the 2022 year, tried to curb the increase in the exchange rate, using the mechanism of injecting dollars from the country’s international reserves into the so-called exchange tables of private banks – dollars which were then, through this channel, commercialized in the foreign exchange market.

The problem or limits of this policy reside in the fact that if there is no substantial foreign currency influx (for example, due to the stagnation of oil production, the main source of country’s foreign currency influx), international reserves cannot be maintained at an adequate level, and thus begin to decrease and pave the way for megadevaluation.

Since mid-November, the government has been reducing the supply of foreign currency at official prices, which has accelerated the increase in the price of the dollar, both in official and parallel exchange rates. This government-promoted devaluation brings with it the usual inflationary effects that destroy the wages and income of the Venezuelan workers and people, who, as the 2022 year closed, saw their traditional income from profits and Christmas bonuses evaporate.

The pulverization of wages

The increase in the exchange rate, or “devaluation” as it is commonly called, of course does not affect the workers and the bourgeoisie in the same way, or the bourgeois Maduro government which promotes it. And this allows the latter to cut fiscal and social spending, while also paying Christmas bonuses, benefits, year-end valuations, and other salary items. All this occurs alongside fiscal and budgetary cuts, due to the fact that the strength of the dollar allows them, with fewer dollars, to cover a greater amount of bolivars to pay salaries and other obligations. The same effect is produced for the bourgeoisie, mainly the export bourgeoisie or the class associated with foreign investments, which can cover a greater amount of salaries, production costs, and fiscal obligations, with fewer dollars.

Those who are extremely harmed by this devaluation are the Venezuelan workers. An official dollar that exceeds 15bs and/or a parallel dollar that exceeds 17 bs increases inflation, raising prices of essential goods and services, destroying the value of their salaries, pensions, bonuses, benefits, and Christmas bonuses.

In fact, with such a high official quote of the dollar, the minimum wage of a Venezuelan worker barely amounts to $8.53 per month (130 bs/15.23), which results in a daily income of only $0.28. The exchange rate is worse if we account for the parallel dollar (17.41), which results in a salary of $7.46 per month and $0.24 per day.

In other words, the minimum wage and pensions, items which have not been increased by the government since March of last year, have decreased by 74.2%, given that it was $30 at the official rate, accounting for the March increase.

The anti-worker and anti-popular adjustment continues

This kind of pulverization of Venezuelan workers’ salaries and pensions is nothing more than the continuation of the brutal “paquetazo” that Maduro has officially been implementing against the workers since 2018, making them pay the cost of the country’s crisis, which was generated by Chavismo and is today entwined with the global capitalist crisis.

But the government’s anti-worker and anti-popular package, which the Venezuelan capitalists, Bolivarian bourgeoisie, traditional bourgeoisie, and foreign capitalists are profiting from today, involves more than just the impoverishment of the minimum wage. To this, we must add the implementation of Memorandum 2792, effective 2018, which allows employers to unilaterally modify labor conditions in their favor, to get rid of workers at their discretion, as well as to cancel workers’ bonuses, citing the value of the dollar, although this has no wage incidence; this is nothing more than the prelude to the wage subsidy they now intend to legalize.

Likewise in the package, there are the salary tables (which the workers call hunger tables) of the Public Administration (PA), implemented since 2018 and reissued in 2022 with the dire ONAPRE directive and the intention to establish installment payments of vacation bonuses in the public administration and of Christmas bonuses in that sector.  There are also the unconstitutional Anti-Blockade and Anti-Hate Laws, and now, the proposed Labor Emergency Law, with which they seek to legalize the wage subsidy. This last law was proposed by the businessman and former president of Fedecámaras, Jorge Roig, who is currently a Venezuelan business representative at the ILO.

We must also add that the government has been cutting social spending and eliminating social programs through various mechanisms, such as the recent elimination of the School Feeding Program (PAE, “Programa de Alimentación Escolar”) through the modification of the school schedule (though it is worth mentioning that, for several years, the program has only partially worked, if at all, with children receiving incomplete menus with very low nutritional value).

Finally, and in a more general way, we must point out that as a part of the package, the government intends to finance the budget for the coming 2023 year mainly through taxes and consumer taxes. These are primarily indirect and regressive taxes, which end up being paid to a greater extent by those with lower income levels, such as the Value Added Tax (VAT) and the Tax on Large Financial Transactions (IGTF, “el Impuesto a las Grandes Transacciones Financieras”). These taxes are levied at 16% and 3%, respectively.

Such taxes, which end up being assumed and paid by the worker in his role as the final consumer, as businessmen and traders transfer them to prices on merchandise and services (whether they are productive inputs or for final consumption), represent 50.87% and 16.83% respectively for the coming 2023 budget. Meanwhile, the Income Tax (ISRL, “el Impuesto Sobre la Renta”), which is paid in greater portion by higher income social sectors, such as businessmen, traders, and other high-income earners, only represents 18.25% of the total tax income in the 2023 budget. This was revealed in the digital newspaper, Tal Cual, during the week of 11/28/2022.

We must continue the mobilization of the people and workers

All this makes it clear that the workers and humble sectors of the population must continue to fight in the streets, mobilizing to defeat the government’s anti-worker and anti-popular package. We must continue demanding a salary which covers basic living costs. It is necessary to develop a national campaign on this issue, as well as to specify the international alliances which will support it. We must stop the fractional and partial payment for our labor and contractual benefits and demand full payment, the fulfillment and discussion of collective bargaining agreements, among other things.

We must mobilize and fight for a sliding wage scale which indexes our salaries to inflation, thus defending our purchasing power. We must demand a halt to official and parallel devaluation, a halt to the freezing of prices in dollars, and that bonuses in dollars be incorporated into salaries and therefore have wage incidence. We must continue mobilizing in the streets to defend our union rights and the right to democratic elections of our representatives, as well as to end the criminalization of popular and labor protests, for the freedom of all the workers who have been imprisoned for fighting.

During 2022, mobilizations grew and gained momentum. In addition, it was demonstrated that it is possible to defeat government policies, as the education workers did, in an alliance with other public sector (and even some private sector) workers, when they succeeded in obtaining the full payment of the vacation bonus from the government. Other examples include the Sidor workers, who struggled and achieved wage increases, as well as other small struggles which won partial victories in the defense of their working conditions.

It is necessary to continue this struggle until we achieve the repeal of the dire ONNARPE directive and Memorandum 2972, as well as the PA’s hunger tables. We must also fight for the rejection of the Labor Emergency Law and its intention to subsidize the salary, as well as the repeal of all the anti-labor and repressive laws (Anti-Hate Law), and of the Anti-Blockade Law that curtails the country’s sovereignty.

The workers’ movement is showing that this is the only possible way to defeat the government’s criminal policies against the workers and Venezuelan people. After the protests to regain education workers’ vacation bonuses and against the ONAPRE directive, although mobilizations have diminished in size, the spirit and will to fight is continuing to grow among the workers. The need to fight is evident, for reasons we have described and more, and will be in sight in 2023, through mobilizations and great battles against our class enemies, that is, against Maduro’s bourgeois government, against public and private bosses, against the bourgeoisie as a whole.

Various factors indicate recomposition in the Venezuelan workers’ movement, including the establishment of reorganizational bodies which have begun to hold meetings and plenary sessions, and are planning to call a 2023 congress to continue strengthening the struggle and mobilization.

Socialist Workers United (UST) expresses its readiness to continue supporting the fights underway and those to come, offering its modest efforts to help build the struggles through contributing both to the debate to define them, as well as to active participation and all other possible spheres.

Mobilization of the people and workers is the only possible way to defeat Maduro’s bourgeois government, with its anti-worker, anti-popular policies. It is the only way to force the country’s surrender and impose a workers’ government which will carry out an economic in the service of the workers and the humble people of the country.

This plan must begin with the refusal to pay the illegitimate and fraudulent foreign debt, the repatriation of fugitive captains, the rejection of imperialist sanctions, the recovery of Venezuelan assets confiscated abroad, the 100% nationalization of the oil industry without transnational or joint ventures, the nationalization and recovery of the national productive apparatus under workers’ control, and the implementation of a progressive tax reform. It must also place, as its highest central priority, the needs and demands of the working class.

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