An Unbearable Situation.
The workers and inhabitants of the poor neighborhoods and sectors of the country are going through an actual social tragedy. Economic crisis deepens, food and medicine shortages continue, hunger strikes, long lines to acquire foods in markets and supermarkets continue in the country and in the banks to get cash. We, workers, are victims of speculation when we want to buy food or medicine to heal, or when we want to get cash, since due to its shortage speculators sell it up to 500% overpriced.
Hyperinflation is unbearable, the numbers recently published by the National Assembly (one must remember that since 2012 the Government does not publish official inflation rates) express prices increase 2.7% daily and 128.4% monthly. In this year, inflation is more than 4600%. In other words, 46 times the prices from the beginning of the year, and if we compare the last twelve months, inflation has reached 46,305%. In other words, 463 times the prices from last year! The basic family food basket, according to CENDAS, will be at the end of the month in over 600 million Bs.
Wages have become salt and water. It is necessary to rescue their purchase power. We must express our disagreement with the wage increase decreed by the Government because they are a complete deceit. They are not enough to eat in the week, the workers must have a wage to guarantee food, living expenses, health, clothing and entertainment. Therefore, we demand wage increase according to the basic food basket, adjustable to inflation increase. This is known as the Sliding Scale of Wages or Wage Indexation.
The Myth of Wage Increases as Responsible for Inflation
We must answer the employer’s associations, the bourgeois opposition and some Chavist “pseudo” economists’ arguments, just as the arguments of reformist left intellectuals who state that wage increase generate more inflation and/or would even be responsible for it. This is not true, wage increase are not inflationary.
In Venezuela, real wages have suffered a downfall of more than 100% since 2001 to January 2018. On the meantime, inflation has been constantly rising. Then, how do these bourgeois analysts explain that wage increase is responsible for inflation? Is it not the other way around, and inflation destroys the wages of the country’s workers? On the other hand, a research by the Konrad López University Foundation, states that in Venezuela, the labor costs (wages) represent in average 10% of total costs. This is proof of the low effects of our wages in employers’ expenses. Besides, one must not forget that only 55% of the economically active population is employed in the formal sector of economy. In other words, only they receive an actual wage.
The data about the downfall of the real wages show a fall in the purchase power of wages. In other words, in demand. Therefore, wages cannot be responsible for the price increase that actually answers to the supply and demand law.
However, let us admit for a moment that the wage increases generate inflation. Are only the workers’ wages inflationary? Are the militaries’ wages, which receive significant increases, not inflationary? Or, are the high profits of the private employer, directors and managers of PDVSA, basic enterprises and other public and private enterprises not inflationary?
The opponents of wage increases in Venezuela do not manage to explain the price increases that occur when there are no wage increases. Neither do they explain why in other countries in the continent (without mentioning others around the world) like Brazil, Chile, Argentina, Colombia, Peru, among others, workers have higher wages than in Venezuela, but the inflation rates are lower.
The difference in favor of employers between the labor value carried out by workers and what they receive for such labor as wage destroys the argument that wage increases are responsible for price increases. A general increase in wages would not necessarily result in price increase. It would shorten the gap between the employers’ profits and the workers’ payment for their labor power, giving it a decent value.
Let us suppose for a moment that workers achieve such a considerable increase that we lower the profit – wages gap to nearly zero, this would only balance the relation between the value of commodities and wages. Within capitalist reasoning, employers will seek to recover this (and any wage increase) increasing prices. At the most, this should lead prices to the previous level regarding the new wage. Any increase above this (inflationary), obeys speculative factors, the need (in the framework of the capitalist system) of the existence of a profit for the employers, or any other cause. In other words, nothing associated to the increase of wage payment. The conclusion is clear: the wage may always be increased at the expense of the employers’ profit. It is a dilemma, either the workers living conditions or the employers’ profits.
In Venezuela, this struggle is expressed in the demand for a minimum wage equal to the basic family basket. What happens if prices increase again? Someone may ask. Then we must apply the sliding scale of wages or wage indexation, in other words, to adjust the wage as inflation increases to recover the wage loss and reduce this scourge to zero. The wage increase to the level of the basic food basket and the sliding scale of wages are the only weapon we workers have to face the rampant price increase.
The True Motors of Inflation
Analysts and economists of bourgeois opposition explain inflation by blaming the government for excessive currency emission (at the same time, this would be the consequence of the need to cover the permanent “wage increases” and the cancelation of the “bonds of the nation”), fiscal deficit and the investors’ lack of trust in the Venezuelan market. The government answers arguing that there is an economic war, inflation induced by speculation and bachaquerismo, a shortage generated by the smuggling of foods and medicines, and that is it.
What is true is that all these arguments contain only half-truths, with more elements of lies. What not even the bourgeois opposition says, nor the government, is that inflation in Venezuela is directly related to the foreign debt and the capital flight. Opposite to the fifteen motors permanently mentioned by the government, these two motors do work to push inflation upwards.
To guarantee the payment of the foreign debt to bankers, multi-nationals and speculator funds, the government has to pay extraordinary sums of dollars, unilaterally cutting necessary import of goods and services for Venezuelan consumption. It is estimated that last year, 19 billion dollars were destined to the foreign debt payment, enough for more than one year of food imports. The foreign debt payments also lead to stop investment in the national production apparatus, the PDVSA, the basic companies, to recover production and national industry.
To this, one must add that during the ten years of existence of the CADIVI (2003-2013), around 500 billion dollars flew from the country through cheap dollars granted to speculator entrepreneurs (boli-bourgeoisie and traditional bourgeois). This without mentioning what flew later through CENCOEX and DICOM. This money was not invested in importing food, medicines, supplies and parts needed and it was not invested in national production.
All this constitutes the true bases to explain the current hyperinflation.
Health and University Workers mark the Way. It is Necessary to unite the Struggles.
For several weeks, the nurses have been fighting for a clear demand, MINIMUM WAGE EQUAL TO THE BASIC FOOD BASKET. The courage of this struggle and the situation of the other health workers awoke solidarity among them. They joined the struggle (one must mention that it is a sector where workers earn wages up to 600,000 Bs every two weeks), with the same slogan. They did not fall into the governments’ promises of a “millionaire bond” (of 20 million Bs without wage incidence) and a CLAP (Local Supply and Production Committees) box every two weeks.
The same has happened with university workers who have expressed discomfort with hunger wages to come and have rejected the small increased offered. They have overcome the betrayal of the FTUV and FETRAESUV leadership, which have dispute to see who surrenders the fight better.
In the last days, the cement workers have also gone to the streets to express their protest before the employers’ non-compliance of their promises. The electricity workers are also beginning to mobilize in demand for wages and decent contract negotiations, just as the workers of the CANTV, and the oil workers a little behind. Even the executive board of the Bolivarian Metro Union, pressured by its rank and file has had to introduce a conflictive list of demands before the Labor Inspection. In other public institutions like the MPPPST, MinMujer, IVSS, ENASAL (salt state enterprise), the workers begin to express their discomfort and to take on small actions of protest.
Although we work in different sectors, let us unite our struggles, we have the same problems and sufferings, mainly in the wage issue. United we are strong, united we may better fight for a decent wage, equal to a basic food basket.
FOR A MINIMUM WAGE EQUAL TO THE BASIC FOOD BASKET,
FOR THE SLIDING SCALE OF WAGES
LET US UNITE OUR STRUGGLES
Unidad Socialista de los Trabajadores (UST)
Agrupación Antímano Marxista