Chavez Announces 10 Pct. Minimum Wage Hike

[Robbien]

The Associated Press

CARACAS, Venezuela — Venezuelan President Hugo Chavez on Friday announced a 10 percent boost in the minimum wage starting Sept. 1 _ the second such increase this year.

Venezuela's minimum wage now at US$216 (euro172.29) a month will rise to US$238 (euro189.84) a month, the president said. The wage hike will benefit 749,000 people, he said.

Chavez's government last raised the minimum wage in February by 15 percent.

Chavez also announced a series of labor law revisions as well as pension and wage increases in what he called another step in paying off the "social debt" the country owes to the poor.

The salaries of public school teachers will receive a 30 percent increase in pay starting May 1 and a further 10 percent starting Oct. 1, he said.

Chavez has promised to continue a generous redistribution of the country's windfall oil gains this year ahead of presidential elections in December.

http://www.chron.com/disp/story.mpl/ap/fn/3827732.html

[Tempest]

1. Oh oh...

Chavez just gave Bush another reason for a regime change in Venezuela.

[hwmnbn]

2. So let me get this straight........

Venezuela is using profits from it's oil industry to raise the minimum wage for all it's citizens. Here in the US, our oil industry is reporting RECORD PROFITS. But instead of raising the minimum wage, they are raising the price of gasoline.

What is wrong with this picture?!? Sounds like we, the people, are getting fucked!!

Anyone care to debate which political philosophy is more advanced and humane? :mad:

[frylock]

4. someone explain to me again how capitalism works better than socialism..

cuz I'm just not feelin it.

[Roland99]

19. Nationalize oil

[rman]

27. To bad the US hardly has any oil to nationalize

The profits of the oil corporations are mostly due to extraction of oil elsewhere.

[1932]

34. Didn't the US just slip below producing 50% of our domestic consumption

for the first time (ever? in decades?) very recently?

I thought I read that in American Theocracy.

[rman]

38. I'm not sure about that

I am sure production of the large US fields peaked in the 70's - that was the root cause of the infamous oil crisis of that era. There's quite a bit of US off-shore drilling, but those aren't very big fields. Frankly i'd be a bit surprised if US domestic production dropped below 50% of consumption only recently. Not to say it's impossible - i don't know everything..

[robinlynne]

47. If it did, it is probably because they hold back production to raise price

price, i.e. enron....

[1932]

52. I think Enron was holding back natural gas. OIL production is dwindling

because of peak oil, according to Kevin Phillips in American Theocracy. (Is ANYONE ELSE reading this book???)

[robinlynne]

53. I heard that book is great.

but I also have heard, that there is plenty of oil. They just hold back as they did with california electricity to raise the prices.

[0rganism]

57. There is oil to be had, what we're running out of is the "cheap" oil

The wellsprings of crude are not going to outlast the coming century, at current rates of consumptive growth -- hell, they may not last 20 years. It's not going to be that easy anymore. From here on out, we've got to consider things like shale extraction processes and, wherever possible, alternative fuels.

Also, there's the whole greenhouse gas emissions problem to consider; given that fossil fuels are essentially hydrocarbons stored from previous millenia, and typical end products of combustion are CO and CO2, we've been re-introducing vast amounts of carbon into the atmosphere that had at one time been naturally removed from it. Even if there was an infinite amount of crude bubbling right up from the ground in our backyards, we'd want to think twice about consuming it willy-nilly.

So oil is not going to be the fuel of choice for much longer. It's not as cheap to produce, and the environmental costs are not easily externalized anymore. We've got to look elsewhere, and that's going to be a hard pill for humanity to swallow.

[reprobate]

41. Depends: Does your income stem from investment or your labor?

If your sheckles come from the labor of OTHERS, capitalism is an emminently fair and humane system. After all, SOMEONE has to own the slaves, right?

It worked for our founding fathers, didn't it? Why not everyone else?

[leftchick]

44. Socialism = Evil Commie Bastards

so say the freaks and freeps. You are right of course and most people do not realize what Chavez is doing for his people at all. They listen to the villification from the RW nutjobs and Lou Dobbs who portray him as a "RADICAL LEFTIST"! We do not even have capitalism in this country, we have Corporatism.

[Zynx]

3. I have to admit that while I support minimum wage hikes...

such a pace is not conducive to keeping inflation under control.

[thoughtanarchist]

5. Z, In all the history of applied keynesian economics...

( which is not a very long time by historical standards from what I understand ) is there any proven tried and true method for keeping inflation in check?

Admit it... Haven't we just been winging it all this time?

[1932]

7. FDR used price controls very effectively. Nixon tried to use them,

but wasn't brave enough to do it the right way.

Interestingly, Nixon's first job as a lawyer was working for John Kenneth Galbraith in the FDR administration keeping track of price controls on, IIRC, rubber tires.

[thoughtanarchist]

16. Economically, I think Venezuela deserves a lot more scrutiny...

and I would love to see more success in the Venezuelan experiment.

[Zynx]

23. We keep money supply growth under control and generally wages

and prices don't get out of whack. They did in the 70s and then we clamped down by putting the economy into a massive recession. The Federal Reserve is very influential.

[1932]

24. In the 70s, RightWingers tried to use interest rates to cap inflation

and it was a disaster -- high interest rates eat into the wealth of poor people, and increase the wealth of people with a lot of wealth. When Greenspan took over, he abandoned interest rate approaches to inflation and instead was more Keynesian -- he tried to tweak the economy with stimuli that would grow parts of the economy that were weak -- and it worked relatively well, or at least it proved that interest rate approaches to inflation were a miserable failure.

In any event, in societies with huge polarizations of wealth, I think income redistribution downward through increased wages doesn't have the same inflationary effects as if, say, everyone's wealth suddenly increased a great deal (whether fairly on unfairly distributed), and the economic upside of income redistribution (like the US experienced in the 40s and 50s) has so many more economic upsides, that inflation is a moot point. And I think that talking about inflation being a risk of minimum wage increases in countries like the US and Venezuela where there is currently very polarized distributions of income is just bull shit from people who don't believe it's true but don't want to see income redistribution and the growth of the economic power of people who work.

[Zynx]

35. Greenspan certainly did use interest rates to cap inflation.

He got the Fed Funds Rate up to 9% in the 90-91 recession and also raised it significantly to deal with perceived inflation in 1999 and 2000. Sure it never got up to the 21% that finally killed the inflationary outbreak of the 1970s, but that's because inflation never got that high during his tenure.

The 1940s and 1950s are not good examples of inflation not mattering since inflation was quite negligibile for most of that time period. Wages and prices both grew at very modest paces and the policies of redistribution were done mainly with income taxes and not artificial wage increases. I favor tax based redistribution to artificial wage increases because forcing wages up by large double digits will always lead to inflation unless you are capping prices artificially in which case businesses will just go bankrupt. Inflation going out of control is everyone's enemy as it undermines investment in an economy since obtaining a real return in an environment of double digit price increases is nigh impossible.

[1932]

37. reread Parker. here's what i found:

The 40s and 50s were an unusual time in that working class people saw their wealth increase faster than the wealthiest, and it was through mechanisms very similar to increasing the minimum wage -- it was through policies that increased the value of work, which makes it directly relevant to this discussion about whether inflation will result from increasing the minimum wage.

As for Greenspan, when he took over the fed, he abandoned the high-interest rate approach to preventing inflation, which was killing the economy -- actually, it started to happen in '82, but Greenspan put the final nail in the coffin of Friedman's theories about money supply.

Read Richard Parker's book on Galbraith--pages 582-583, in particular. Volker was a follower of Friedman. He tightened money supply and it killed the economy. He pushed interest rates to 20% at one point. They were over 12% for most of Reagan's presidency. The policies choked out inflation, but at an immense cost. It created the worst recession since the 30s with GDP falling 3% and factories operating at 60% capacity. Unemployment skyrocketed to 11%.

In 82 Volker abandoned tight money supply policies and the economy roared to life. The UK hung on for three more years under Thatcher, and continued to suffer stagnation -- when they backed off from these policies, their economy took off too, proving how wrong Friedman and his monetary policies were. When Greenspan took over in '87 he infuriated the friedman acolytes by completely abandoning their strategies (and discrediting them publicly too).

[frankenforpres]

36. monetary policy

since the early 80's has worked fairly well. and i think europe's specified monetary policy is inflation targeting

[Media_Lies_Daily]

6. But such a pace is taking care of his people....

...a lesson our Fearless Leader may be too late to learn.

[IndianaGreen]

43. High gas prices also sends inflation over the roof!

The difference is that high gas prices increase the profits of the oil companies, and their investors, while a wage hike (which still falls below a Living Wage) only benefits the poorest of the workers.

A Socialist would support a wage increase to the workers, preferably to a Living Wage, a capitalist would only care about the value of his/her stocks.

[Rex]

8. Ven. ppp: $5,800 (2004 est.)

$204 dollar increase. That is a good chunk of change.

American purchasing power parity: $40,100 (2004 est.) Or a $1,400 dollar 'rebate'...what did they give us? $100 for gas at 3 dollars a gallon? :eyes:

Cheap ass biotches!

[corporate_mike]

9. Oil price 'gouging' can have its benefits

Chavez's Citgo and Exxon are equally guilty

[1932]

10. Care to try to explain that claim.

Because the logic definitely is not apparent.

[corporate_mike]

11. 80% of Chavez's income is from oil sales

Also, Venezuela is a founding member of OPEC, the main cause of higher and higher oil prices.

[1932]

12. Last time there was a huge increase in the price of oil,

the number of Venezuelans in poverty shot up. Check out Richard Gott's book on Venezuela.

[Solon]

13. And if Venezuela broke from OPEC entirely...

by offering below market value oil they face WTO penalties, OPEC sanctions, and dumping charges in the US, exactly how would that help either that country or this one?

And an FYI, this is NOT about the charity in HEATING oil, which is a different market than Oil for Gasoline and Diesel.

[thoughtanarchist]

17. Good reality check Solon....

I had no idea of the backlash of undercutting the global oil market.

just for reference, can I get a supporting link?

Jesus, "free market" my ass huh?

[Solon]

18. I can give a few examples...

The WTO is the organization responsible for mediating trade disputes of all sorts, any member nation can file a complaint, and the respondant would have to find a way to settle. Most of these cases involve "barriers to free trade" as it were, to give an example:
http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds275_e.htm
This particular case is still pending.

If Venezuela did sell oil below market prices a complaintent, most likely a US oil company, would file a complaint, and a mediation would have to occur, how much it would cost depends on what the WTO decides, but considering the product in question, it could be a high price.

Here's OPEC main page:
http://www.opec.org/home/
This is right there:

OPEC’s mission is to coordinate & unify the petroleum policies of Member Countries & ensure the stabilization of oil prices in order to secure an efficient, economic & regular supply of petroleum to consumers, a steady income to producers & a fair return on capital to those investing in the petroleum industry.

OPEC doesn't set the oil prices anymore, that's up to these three money markets:
They are the New York Mercantile Exchange (NYMEX, http://www.nymex.com), the International Petroleum Exchange in London (IPE, http://www.ipe.uk.com) and the Singapore International Monetary Exchange (SIMEX, http://www.simex.com.sg).

As far as what the consequences are for Venezuela from OPEC is unknown, as far as I know, this has never happened before, so it would be unprecedented.

As far as US anti-dumping laws, and other nations, and how the WTO fits in, here's a website that can help.
http://www.cbo.gov/showdoc.cfm?index=439&sequence=0

[SoCalDem]

20. What if they drop out of WTO? They paid their debt back to the IMF

and seem to be incing towards "buying back their country".. Can a country just withdraw from the WTO, and just sell their resources to the customer of their choice?

[Solon]

21. Problem would be finding a customer...

I would imagine that if they did do that, and remember, they haven't completely paid the debt yet, should finish up by next year, oddly enough they also bought up the debt of neighbor nations, and are slated to help found the South American Community of Nations. Is this a plan to pull out of the WTO? Not to mention being an alternative to the FTAA.

But, besides that, if they did pull out of the WTO, with its total of 149 member states, I say that it would be difficult to sell to a WTO member. Look at the list:

http://www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.htm

[Media_Lies_Daily]

22. Back again, eh? You're singing the same stale song, too.

[IndianaGreen]

42. "corporate" is part of his username

Duh!

[corporate_mike]

49. I drive a Prius and gas prices hardly affect me

I only drive 6,000 miles /year, so even if gas prices went to $10 per gallon, it would not impact my lifestyle at all.

On the other hand, millions are squeezed by high prices.

Chavez wants high prices. Every time prices stop moving higher he makes a ridiculous statement to create panic and drive prices higher.

[killbotfactory]

50. He wants them lower than they are now

But you've already been told that a hundred times in other threads, probably.

[Media_Lies_Daily]

55. So, what has he said that's created a "panic" anywhere?....

The only people that are causing real panic about oil are the ones illegally occupying the centers of the U. S. Government, illegally occupying Iraq as well as Afghanistan, and threatening Iran. I don't see Chavez doing any of that, do you?

[rman]

31. you again

I see you changed your song slightly from "high oil prices are Chavez's fault" to "Chavez is as guilty as Big Oil".
Btw Citgo is not Venezuela's oil corporation; that would be PDVSA (Petróleos de Venezuela SA).

[IChing]

39. You again? n/t

[screenplaya]

40. Gotta love a guy with corp in his username...

and a avatar that looks exactly like the Linux open source o/s penguin.

[corporate_mike]

48. When you lose the argument, attack the person

[Media_Lies_Daily]

56. When confronted with reality you resort to posts that have little....

...or no meaning whatsoever.

[arikara]

46. I know some people who are living on their boat

At Christmas time in Venezuela, they were paying 3 cents Canadian per litre which is approx 10 - 12 cents per US gallon for their diesel fuel for their boat.

Yet in Canada, we ship most of our fuel down to the US, then import ours from who knows where and we pay more for it than you do. I'd rather go for Venezuela's approach myself.

[UrbScotty]

14. Michigan: Granholm has Chavez beat

Our minimum wage is going up 35% that same day.

Just saying...

[JanMichael]

15. The raise that Chavez is pushing effects a MUCH higher aggregate raise...

...proportionally.

Please...One must always look at the aggregate picture:-)

[GoddessOfGuinness]

30. What IS the aggregate picture?

I'm really not clear what the stats presented indicate.

Here in the US, assuming one works 8 hours a day at $5.15/hr; a monthly income of $824 is earned. Taking cost of living into account, how does that compare to $238 per month in Venezuela?

Of course, I'm thrilled that Chavez is making important steps to help Venezuela's working poor. But I've been under the impression that "poor" in that country is far poorer than it is here...

[rman]

32. A Dollar buys more in Venezuela than in the US

238 US Dollar = 511,421 Venezuelan Bolivar
http://wwp.greenwichmeantime.com/time-zone/america/venezuela/currency.htm

[toopers]

25. Watch the price all those consumer goods go up too!

N/T

[1932]

26. They have price controls on food and petrol, so I doubt it.

Anyway, I think fears like that are ridiculous in societies with such incredibly polarizations of wealth. The benefits of giving people who work way more of the profits of society way way way offset the slight risk of inflation.

[rman]

33. Yeah, giving money to the rich is what will drive prices down, right?

We've been trying that for 30 years or so, it's obvious that it does not work as advertised.

[Canuckistanian]

28. What a terrible man

I'm sure this is some kind of plot designed to keep working people enslaved.

He's such a despot.

:popcorn:

[killbotfactory]

51. Education, defense, health-care, non-predatory loans..

And now a hike in the minimum wage... and a decreasing poverty level...

What a horrible monster, when do we invade?

[rman]

29. kick for social domestic policies

[Zorra]

45. This "pinko commie" is making a great case for a Social Democracy. n/t

[Tight_rope]

54. DAMN...I heading south of the boarder! Venezuela here I come!