Everyone agreed: the President, the Minister of Labor, business organizations, unions, political parties, churches and social entities. They agreed that the minimum wage had to be increased. As it was a matter of justice and equity that concerned a large part of the population, categorically opposing the increase, or setting rigid acceptable levels, did not favor the public image of those who did so. It was better to agree, discuss the details later, and end the process by making a formal announcement of the agreement.
A salary increase as a response to inflation, not as a result of increases in labor productivity, it is a way of correcting an economic distortion. As the prices of goods and services rise, it is usual for wages increase less or remain stagnant. The consequence is a decrease in the purchasing power of wage earners and their dependents, creating social pressures that grow as time passes and the disparity between price variations and prices widens. wages. It is not a situation that can be ignored indefinitely without jeopardizing political stability.
But the increase tends to aggravate inflation, due to its impact on production costs, which implies that its function is essentially redistributive, in favor of those who benefit from the readjustment, but to the detriment of informal workers, pensioners, the unemployed and others. people outside the scope of the magnification.
Evaluations of labor markets in underdeveloped countries reveal that a variable percentage, usually high, of informal companies, would cease to be viable if the salary provisions established for the formal sector were applied. This means that the increases arranged at a given time for formal companies are only transmitted with a delay to informal ones, while the impact on costs and prices manifests itself more quickly.
