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Venezuela increases minimum wage sixty-fold as economy goes into meltdown

Venezuela increases minimum wage sixty-fold as economy goes into meltdown
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Small business owners in Venezuela are fearful for their future after President Nicolas Maduro announced a 60-fold increase in the minimum wage. It means that merchants must now pay their staff 180 million bolivars a month rather than 3 million, or roughly 30 dollars as opposed to 50 cents. That will likely increase unemployment and further fuel mass emigration that has overwhelmed South American countries.

"We don't understand it much, said Maria Carianes, a merchant in the capital Caracas. "We know what the president himself announced on television and we will wait and see how all those changes develop in practice. I don't think it will be easy"

Business face paying the new rate or closing, and paying the new rate could force them out of business anyway. As for customers, they fear the new measure will worsen the county's problem of hyperinflation.

"We don't know what will happen on Tuesday," said Caracas resident Raul Diaz. "People are spending everything they have to try to fill up their pantries so it will last as long as possible, without knowing what will happen by the time the products in the pantry expire."

To soften the blow, Maduro vowed that the state would cover three months of the wage increase for small and medium-sized companies. But he did not provide details and it remains unclear how his cash-starved government would afford such a hefty payout or whether the chaotic administration has the logistical capacity to pay wages on time. The Information Ministry did not respond to a request for an explanation of the plan.

The increased minimum wage is just one of a range of announcements made by socialist President Maduro on Friday that have shocked citizens. In an attempt to curb inflation he ordered a 96 percent currency devaluation, pegged the bolivar to the government's petro cryptocurrency, and boosted taxes as part of a plan he said would revive the oil-rich nation that's undergoing an economic meltdown.