Minimum wage should be R$ 1,389 in 2024, predicts government – 04/14/2023 – Market

The Luiz Inácio Lula da Silva (PT) government predicts that the minimum wage will rise to R$1,389 in 2024, a real increase of 1.9% in relation to the amount promised for 2023. If the amount is confirmed, this will be the second year consecutive real increase.

The numbers are in the PLDO (Budget Guidelines Bill) of 2024, sent this Friday (14) to Congress.

The value for the minimum wage in 2024 represents a nominal increase of 5.2% over the value promised for 2023. Meanwhile, the INPC (National Consumer Price Index), aimed at the inflation felt by lower-income Brazilians, is projected estimated by the government at 3.3%.

Despite the prediction, the government can still change its decision on what the minimum wage will actually be applied for 2024. Last year, the definition was made by Bolsonaro through an MP (provisional measure) in December, which defined the value in BRL 1,302. Later, Lula announced that the amount will increase to R$1,320 as of May.

Until 2019, the minimum wage rule provided for the correction for the previous year’s inflation plus the real increase in GDP (if it was positive) two years earlier —which, for most of the period, provided real readjustments to workers. The rule was instituted in 2011, during the government of Dilma Rousseff (PT).

As of 2020, Bolsonaro no longer gave a real increase in the minimum wage.

Approximately R$400 million in federal expenditures are required for each additional R$1 in the minimum wage, which is also used as a basis for calculating pension payments, welfare benefits and unemployment insurance.