Priscilla Mazenotti
Reporter Agência Brasil

Brasília - The leader of the PCdoB in the Chamber of Deputies, deputy Renildo Calheiros (PE), calls the new minimum wage (MW) of US$155,97(R$350), effective in April, a "conquest for the Brazilian worker." Calheiros adds that it is exactly what is needed for the working class: "The security of real gains in wages." He points out that raising the minimum wage from US$133,69(R$300) to US$155,97(R$350) is a real increase of 13%.

According to the union-linked socio-economic studies organization, Dieese, the real increase is exactly 12.07%, adding that it calculates inflation between May 1, 2005 (when the last MW increase occurred) and March 31 of this year, at 4.1%.

The announcement of the new MW, along with an adjustment of income tax brackets of 8%, met with a mixed reaction. The government praised it, the opposition criticized it.

Some economists lament the link between the minimum wage and social security (INSS) benefits in Brazil because any increase in the MW increases the problematic INSS deficit. As for the budget, the government admits the new MW will cost US$2,94 billion(R$6.6 billion), but spokesmen say the shortfall is only US$311,94 million(R$700 million) and will be taken care of without any problems.

Translation: Allen Bennett