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TEHRAN, August 19 - After Venezuelan President Nicolas Maduro’s 60-fold increase to the minimum wage, storeowners on Saturday wrestled with an anguishing decision: Close up shop or hit customers with steep price hikes at the risk of sinking the business.
TEHRAN, Young Journalists Club (YJC) - In a set of sweeping announcements that shocked many Venezuelans, the socialist Maduro on Friday ordered a 96 percent currency devaluation, pegged the bolivar currency to the government’s petro cryptocurrency and boosted taxes as part of a plan aimed at pulling the OPEC member out of its economic tailspin.
The measures especially spooked shopkeepers already struggling to stay afloat due to hyperinflation, government-set prices for goods ranging from flour to diapers, and strict currency controls that crimp imports. Many stores were closed on Saturday as owners hunkered down to consider the implications.
Economists warned that some companies would go under, unable to shoulder the massive increase in monthly minimum wage from 3 million bolivars to 180 million bolivars, or roughly $0.5 to $30. That will likely increase unemployment and further fuel mass emigration that has overwhelmed neighbouring South American countries.
Jhonny Herrera, 41, owner of a hardware store on the windswept Paraguana Peninsula in northern Venezuela, said he would have to fire two employees because he cannot afford to pay them, leaving him with just one worker. When Venezuela was enjoying a decade-long oil bonanza, he had 10 employees.
Source: Reuters
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