Correction of the minimum wage is R$ 1 below the necessary to restore inflation

The correction of the minimum wage in 2022 was R$ 1 below the amount necessary to restore the purchasing power of workers, according to a calculation by sources in the economic area heard by the leaf.

The trend is for the difference to be made up in early 2023, when the government will once again need to raise the national floor. The law allows the adjustment to be made the following year.

By leaving the difference to be compensated in 2023, the government stops spending BRL 364.8 million this year. This is the impact of each additional BRL 1 in the minimum wage on budget expenses, according to the government. The minimum wage is a reference for the payment of pensions, assistance benefits and unemployment insurance.

At the end of last year, the government issued an MP (provisional measure) setting the minimum wage at R$1,212 as of January 2022. Before, the floor was R$1,100.

To do the math and arrive at the new value, the government considered the minimum wage expected for 2021 before rounding (R$ 1,099.24) and the residual of R$ 1.61 that had not been granted because inflation exceeded the projected.

On this calculation basis, of R$ 1,100.85, the government applied the variation of 10.02% expected for the INPC (National Consumer Price Index) in 2021. It is the index used to correct the national floor and other social benefits.

This would result in a salary of BRL 1,211.16 – a figure rounded by the government to BRL 1,212.

However, the INPC had a greater variation than expected, of 10.16%, as announced today by the IBGE (Brazilian Institute of Geography and Statistics).

To replace inflation, the floor should reach BRL 1,212.70 – or BRL 1,213 after rounding up. The amount is R$ 1 higher than what is set and currently in force.

Although the law allows the adjustment to be made the following year, the Jair Bolsonaro government (PL) has already had to edit a second MP to correct the floor due to a significant difference, of R$6.

In 2020, the minimum wage was initially set at R$1,039, but inflation considerably exceeded the government’s expectations. With that, the correct floor would be R$ 1,045 for that year.

The minor correction took place at a time of high prices for meat and other food items for Brazilians, which led the government to anticipate the correction, which took effect in February of that year.

In 2021, however, the economic area decided to wait to make the adjustment, given a difference of less than BRL 2 in the value of the floor.

“What they should always do was to retroact the readjustment after the announcement of inflation. It is only necessary to issue a supplementary payroll, instead of playing for other years”, says economist Ilmar Silva, from Dieese (Inter-Union Department of Statistics and Socioeconomic Studies).

“In fact, the increase replaced the value, but that loss, that bitterness of those who were left with a salary below inflation [nos dois anos anteriores], this one does not recover”, says Ilmar.

Since 2020, the government has readjusted the minimum wage just to restore inflation, with no real increases. The last gain above price variation was in early 2019, incorporating the 1% GDP (Gross Domestic Product) growth from two years earlier.

It was the last year in force of the policy of valuing the minimum wage created during PT administrations, through which the minimum wage rose above inflation in periods of economic growth. The formula was: INPC of the previous year + GDP growth two years before.

Before the rule expired and was not renewed by the Bolsonaro administration, workers were already receiving only the INPC because the country was not growing. When GDP turned negative, the effect on the formula was nil.

Dieese estimates that 56.7 million people in Brazil have the minimum wage as a reference for their income.