Economic team admits readjusting minimum wage to R$ 1,320 and sees cost of up to R$ 5 billion, says agency

The Ministry of Finance started to admit an additional readjustment in the minimum wage and is now calculating to raise the national floor from R$1,302 to R$1,320 starting in May, two sources from the economic team told Reuters, in a measure with an estimated cost. by up to R$ 5 billion in the year.

The decision consolidates a change in the position of the Minister of Finance, Fernando Haddad, who seeks an improvement in the country’s fiscal situation and argued that the floor of BRL 1,302 set by the Jair Bolsonaro government for 2023 and in force since January represented an increase above the inflation, which meant that the government had already fulfilled its promise of giving real gains to workers.

According to the sources accompanying the negotiation of the measures, a review of government spending this year will make room for the new increase to be granted. Among the factors is the reassessment of beneficiaries of the Bolsa Família program, with the fight against fraud.

“The minimum wage is easier to accommodate. If you were to raise it in May to reach R$1,320, which would be everyone’s wish, it would be more or less R$5 billion,” said one of them, on condition of anonymity.

According to this authority, the exact impact on the Budget will depend on an assessment of the speed of release of benefits in the INSS queue. In a more optimistic scenario for the accounts, the cost could be closer to R$ 3 billion, he said.

The return of annual minimum wage adjustments above inflation, which ceased to exist in the Bolsonaro government, was a campaign promise by President Luiz Inácio Lula da Silva.

In December, after the approval of the Transition PEC to make the spending ceiling more flexible, the elected government managed to include R$ 6.8 billion in the Budget to bring the minimum wage to R$ 1,320 as of January. However, after noting an acceleration in the release of INSS benefits in 2022, the new government stated that this amount had been consumed.

Using the argument that resources for this purpose have run out, Haddad said in January that the floor in force since the beginning of the year already represents a gain of 1.4% above last year’s inflation. He argued that, with that, Lula has already fulfilled his promise of making real gains this year, emphasizing that the commitment will also be fulfilled in the next three years.

Days later, the minister stated that an eventual additional increase would depend on the outflow in the INSS queue and on negotiation with union centrals.

The readjustment impacts government accounts because a series of social security benefits are linked to this amount and are readjusted automatically when the government raises the minimum wage. The value of R$ 1,320 represented, in January, a real increase of 2.98% over the value of the minimum wage that was in force until December, of R$ 1,212.

Last month, Lula stated that the national floor in the coming years should be readjusted according to economic growth and created a working group to define a new readjustment policy, in addition to establishing the value that will be applied this year.