UNEXPECTEDLY: The Results Are In After Socialist Venezuela Dramatically Raised Its Minimum Wage — It Ain’t Pretty.
Alongside rampant inflation, the government also threatened jail time for businesses that raised their prices. According to the Miami Herald, the combined economic conditions fostered the environment for 40 percent of Venezuelan stores to close after the wage hike.
“It is a perfect storm,” Maria Carolina Uzcategui, president of the National Council of Commerce and Services of Venezuela, said. “These decisions are leading many business people to say, ‘No, I can’t do it any more,'” she added.
Economist Orlando Ochoa pointed to the country’s currency market as a source of economic woes. “The government sector has the monopoly on imports, the currency market is dysfunctional and there’s hyperinflation,” he said.
“So, if salaries are increased by decree, and the commercial and industrial sectors cannot sell their products because of these problems, and on top of that because of electricity blackouts, infrastructure problems and the loss of qualified personnel, which is leaving the country, then it’s easy to understand that many may prefer to close.”
Up next: Directive 10-289.