Unprecedented Increase in Unemployment Benefits and Minimum Wage Amidst Inflation: What You Need to Know

The Government has set a virtual meeting for the Minimum, Vital and Mobile Salary Council (SMVM) on July 18 at 2:30 p.m. The purpose of this meeting is to determine the value of the SMVM and unemployment benefits. If no agreement is reached, the Government will make the final decision.

Inflation in May was 71.9%, while the SMVM increased by 50.2%, resulting in a 12.7% deterioration in purchasing power. The minimum wage impacts registered monthly or daily wage workers, affecting those who earn less than the minimum wage directly and indirectly influencing unregistered or informal workers. Retirees with 30 or more years of contributions are entitled to 82% of the SMVM.

The Unemployment Benefit is set at 75% of the worker’s previous normal monthly remuneration, with a minimum floor set at 50% of the current SMVM and a maximum ceiling of 100% of the SMVM. Due to layoffs, the number of workers collecting unemployment benefits has increased in recent months due to decreased activity in the private sector.

At previous Council meetings, the Government had to set minimum wage values due to lack of agreement between business and union representatives. In January, the Ministry of Labor set a monthly value of $180,000 or $900 per hour for February, and $202,800 or $1,014 per hour for March. The minimum wage for April was set at $221,052 for monthly workers and $1,105.26 per hour for daily workers, representing a 9% increase from March