In Venezuela, Huge Hike in Minimum Wage Forces 40 Percent of Stores to Close
Venezuelan President Nicolas Maduro decided that the best way to deal with the country's hyperinflation was to raise the minimum wage.
Sounds harmless, doesn't it? Who could begrudge poor people a little raise in wages?
Except that inflation in Venezuela is currently running at about 2400 percent a year -- 200 percent in August alone. And Maduro increased the minimum wage 3,500 percent while forbidding store owners from raising prices.
Does that sound like a Democratic Party platform or what?
Needless to say, most store owners are about to give up, with 40 percent of the country's retail outlets closing their doors.
The problem is that Venezuelan companies are being forced to sell at prices far below cost just as employee salaries are increasing by 60 times, Uzcátegui said.
What’s more, the regime has banned stores from increasing their prices in order to cover the increases in salaries, arguing that it is not necessary.
If they do increase prices, store owners or managers can wind up in prison, Uzcátegui said.
“We have inspections, and they force us to sell at last month’s prices,” she said. “That takes money away from the business because of the hyperinflation, when you can’t even sell at yesterday’s prices because you lose money.”
“And anyone who protests against these measures runs the risk of going to jail, without the right to appeal, without the right to anything, simply because the official whose turn it was to inspect the store just felt like arresting you. He did it, and that’s all,” she said.
No, this scenario isn't likely to happen here. But the thinking that led to this nightmare in Venezuela is alive and well in the U.S.
The slogan "Fight for 15," which headlines the drive for a $15 minimum wage, was born in the fevered imaginations of socialists whose knowledge and understanding of basic economics approaches that of a freshman in high school. But they are positively economic geniuses compared to Maduro. Can you imagine a meeting between Maduro and his economic advisers? What do they talk about?
My guess is the advisers approve of every cockamamie idea Maduro comes up with because the alternative is jail -- or worse. It's "La La Land" without the "La" and the Venezuelan people are suffering horribly because of it.
The Organization of American States (OAS) is not ruling out a military intervention in Venezuela if things get much worse.
"With respect to a military intervention to overthrow Nicolas Maduro's regime, I don't think any option should be ruled out," [OAS Secretary General Luis] Almagro said at a press conference in the Colombian city of Cucuta. "What Nicolas Maduro's regime is perpetrating are crimes against humanity, the violation of the human rights and the suffering of people that is inducing an exodus. Diplomatic actions should be the first priority but we shouldn't rule out any action."