Budget: government reduces from R $ 1,079 to R $ 1,067 proposed minimum wage in 2021 | economy

The amount is established in the budget bill for next year sent to the National Congress on Monday (31) by the Ministry of Economy.

The amount proposed by the government, which depends on the approval of Congress, represents a increase of R $ 22 in relation to current minimum wage of R $ 1,045.

It is also equivalent to R $ 12 reduction compared to R $ 1,079.00 proposed in April of this year for 2021.

The explanation for this drop has to do with the fact that the government predicts an increase based only on inflation in 2020.

Since the inflation forecast for this year fell, the minimum wage will also have a smaller adjustment.

In April, the government forecast that the INPC would increase 3.27% in 2020, a figure that fell to 2.09% in July.

The Constitution establishes that the minimum wage must be corrected, at least, by the variation of the National Consumer Price Index (INPC) from the previous year.

The value of the 2021 minimum wage may change even more, depending on the behavior of inflation.

According to information from the Intersindical Department of Statistics and Socioeconomic Studies (Dieese), the minimum wage serves as a reference for 49 million workers in Brazil.

In the budget project sent to Congress on Monday, the minimum wage is expected to be corrected only for inflation, based on the estimate of the National Consumer Price Index (INPC).

This means that there will be no “real profit”, that is, above inflation. But the purchasing power of those who receive the minimum wage will be maintained.

This format was already adopted this year, when the economic area granted an adjustment based solely on inflation in 2019.

With that, the government changed the policy of real increases (above inflation) that had been implemented in previous years, proposed by President Dilma Rousseff and approved by Congress.

This policy, of adjustments for inflation and variation of the Gross Domestic Product (GDP), was in force from 2011 to 2019, but the minimum wage did not always exceed inflation.

In 2017 and 2018, for example, the adjustment was granted only based on inflation because the GDP of previous years (2015 and 2016) had retraction. Therefore, to comply with the proposed formula, only inflation served as the basis for the increase.

Impact on public accounts

By giving a lower minimum wage adjustment, the federal government also spends less. This is because social security benefits cannot be less than the minimum amount.

According to government calculations, each R $ 1 increase in the minimum wage generates an expense in 2020 of approximately R $ 355 million.

Thus, a readjustment of R $ 12 below the minimum wage in 2021 would represent a decrease of approximately R $ 4.26 billion in expenses created for the federal government.

See below a report from Jornal da Globo on the entry into force of the minimum wage of R $ 1,045 at the beginning of this year: