Mantega says government will veto any minimum wage above R$540

On Tuesday, January 4, the minister of Finance, Guido Mantega, declared that a minimum wage above R$540 would be vetoed by president Dilma Rousseff. Mantega called any attempt to increase the minimum wage above the amount established by the executive branch temerarious.

According to the minister, a higher minimum wage would complicate the government’s fiscal adjustment planned for this year. “It is rash to raise the minimum wage above R$540. If anything higher is sent to us we will veto it (the minimum wage must be approved by Congress). An increase above the established amount will exert pressure on the Social Security budget, cause a deterioration of public accounts and make any fiscal adjustments very difficult,” declared the minister.

However, there are politicians in Congress, especially those with links to organized labor, who are determined to increase the minimum wage.
Although both sides in the dispute say they will not yield, the fact is that during the congressional debates over the 2011 budget last year, some members of political parties in the government alliance accepted the R$540 minimum wage under the condition that the amount would be discussed again when the presidential decree (“medidia provisória”) that established it came up for a definitive vote. Therefore, the government set aside a reserve of R$5.6 billion, which could cover the cost of a minimum wage of up to R$560.