WSJ: CARACAS, Venezuela—President Nicolás Maduro raised the minimum wage 40% on Thursday, a day before a national strike called by the opposition to force the president to allow a referendum on his rule.
It was the fourth time this year the leader of the oil-rich nation has raised salaries and pensions as he battles the collapse of the local currency, near-record low approval ratings and a resurgent opposition. According to Mr. Maduro, nearly two-thirds of Venezuela’s labor force will benefit from the raise.
Economists say the action aims to defuse a wave of planned antigovernment protests, most importantly the national strike and the opposition’s march on the presidential palace next Thursday.
“In what other part of the world do workers enjoy so many raises?,” Mr. Maduro said on state television. “Nowhere else.”
Starting Monday, full-time employees will receive 90,000 bolivars a month, comprising their wage and a food supplement. Mr. Maduro said he would also start paying public employees Christmas bonuses on Monday.
The new wage still fetches just $70 on the black market and covers only a quarter of the monthly cost of basic foods and household products required by an average family, according to labor-research institute Cendas.
Mr. Maduro said his government has raised the minimum wage 454% this year, which he said is “much, much, much, really much more than inflation.”
Although the government stopped publishing inflation figures almost two years ago, Mr. Maduro’s own 2017 budget implies a 477% annual rise in prices. The International Monetary Fund forecasts Venezuelan inflation to accelerate to 1,600% next year.
“There’s no other country in the world that can raise wages 40% from one day to the next without fueling inflation,” said Ángel García Banchs, partner at Caracas-based business consulting firm Econométrica.
Mr. García Banchs said the new salary would also lead to more layoffs and business closures in the crisis-stricken country, where gross domestic product will shrink 10% this year, according to the IMF.
While courting workers, Mr. Maduro has threatened to expropriate business owners who join Friday’s general strike. “A company closed [means] a company reclaimed by the working class and the Revolution,” he said.
On Tuesday, hundreds of thousands of Venezuelans rallied across the country to demand a recall referendum against Mr. Maduro, as allowed by the constitution. The president’s allies in courts and electoral council earlier this month suspended the referendum process because of fraud allegations, taking away the opposition’s best chance of changing the government before 2019 and fueling social unrest.
Corrections & Amplifications:
An earlier version of this article ran with a photograph of pro-government demonstrators that was incorrectly identified as showing opposition protesters. An earlier version also mistranslated Mr. Maduro’s comment that the wage increase was “really much more than inflation” as “but really much less than inflation.” (Oct. 27, 2016)