Venezuela Raises Minimum Wage 3,000% and Lots of Workers Get Fired

[Bacchus4.0]

https://www.bloomberg.com/news/articles/2018-09-14/after-getting-3-000-wage-hike-workers-are-fired-in-venezuela?cmpid=socialflow-twitter-business&utm_source=twitter&utm_medium=social&utm_campaign=socialflow-organic&utm_content=business

Starting this week, 7 million employees are guaranteed 1,800 bolivars a month -- worth about $20 at the black-market rate. President Nicolas Maduro intended the mandate as political boost, but it’s having the opposite effect as companies, already hit by Venezuela’s epic economic contraction, tell workers they can’t afford to keep them.

While there have been many similar moves in the past, never has one been so disruptive, arriving amid hyperinflation, depression and devaluation. Some employers are restructuring costs, rejiggering pay scales and negotiating settlements with workers. Others are simply dismissing people. Much of the action happens secretively as companies try to avoid punishment by the government, which has been jailing those it believes are flouting the rules.

[qazplm135]

1. so let's say starting tomorrow

a responsible government is put in place. How do you start to fix this mess?

[john657]

2. First thing?

Stop nationalizing every business in the country.

[EX500rider]

3. Let the currency float, stop printing Bolivars & do away with price controls for a start

Bring in experts to fix the oil infrastructure also.

[GatoGordo]

4. No responsible government on the horizon

The opposition (MUD) are mostly Chavists who think that the problem with Chavismo is implementation. And of course, they think that if THEY were in charge, THEY could pull off Chavismo better than Maduro (or his predecessor, Chavez)

As much as Chavismo is an abject failure, El Pueblo's memory is long, and they remember the "good old days" when Chavez looted every profitable business and promptly ruined them... but gave El Pueblo all sorts of freebies. Nearly 90% of the people want Maduro and Chavismo gone... and in the next breath 70% want the return of the glory days of Chavismo. Which is illogical since there is no more businesses to loot. 50% of businesses have closed in the last 15 years and 40% of the remaining closed last month.

Regardless, the first step is letting the currency float. An arepa needs to cost what an arepa costs. There is going to be some short term pain, but until the country starts paying what goods and services actually cost (gas, food, medicine, etc) things won't improve. There will be humanitarian aid, but unless the people who hold the purse strings are assured that the Castroists are GONE FOR GOOD, there won't be any financial bailouts.

PdVSA is in ruins. It will by necessity be privatized. Which is a shame, but NOBODY will invest so much as a worthless Bolivar in Venezuelan oil unless they can profit handsomely by it. Its going to cost upwards of $50 billion to get PdVSA running efficiently again.

China and Russia have invested heavily in Chavismo. They are not going to be happy to have to write off BILLIONS in bad debt.