March 29, 2023

Look at the average minimum wage in Brazil at the beginning of the Lula government

Brazil’s wage adjustments were very positive for workers in January. This is because in the first month of 2023, three out of four agreements and collective agreements were above the National Index of Consumer Prices (INPC).

In other words, the majority of workers in the country benefited from the increase in purchasing power earlier this year. By comparison, only 23.8% of collective agreements and agreements passed INPC standards in 2022. This shows how much more positive the scenario has become for workers in the country in January this year.

In short, the INPC is used as a reference for INSS salary adjustments and benefits in the country. Thus, organizations rely on this indicator to implement agreements and readjust workers’ wages.

High inflation reduces purchasing power

When the inflation in the country is at a very high level, the purchasing power of the factor decreases. Incidentally, when the INPC is very high, adjustments tend to be lower than the index, not least because most employers won’t significantly increase employee salaries, even with higher inflation.

In any case, it should be noted that the INPC measures the variance in the shopping basket of households with incomes from one to five of the minimum wage, that is, it focuses on the lowest-income people in the country. Thus, since it is used for wage adjustment, the INPC is very important for Brazilian workers.

All this data is part of the survey conducted by the Inter-Union Department of Statistics and Social and Economic Studies (Dieese) and published monthly.

Brazilian wage floor

According to the survey, the The average minimum wage in the country was R$1,406.26 in January, in the first month of Lula’s government. That is, this average value is “equal to the sum of the values ​​of all floors divided by the number of floors observed,” according to Dieese.

Of the four economic sectors surveyed, only one had a score above the national average. See below floors for each sector:

  • Services: 1,411.00 Brazilian reals
  • industry: 1,381.93 Brazilian reals
  • a job: 1380.71 Brazilian reals
  • rural: 1,329.24 Brazilian reals

It should be noted that the service sector represents approx 70% of the Brazilian GDP. For this reason, the sector pushed the country’s minimum wage higher, despite the fact that other sectors registered values ​​below the national average.

Although the services had the highest national level, they were industry It recorded the highest number of adjustments above the inflation rate in the country in January 2023, reaching 77.0% of the total adjustments. Trading under the INPC was 13.0%, while 10.0% was equal to the inflation measured by the index.

With very similar data, the a job January closed with 76.4% adjustments above inflation. On the other hand, only 5.6% of the negotiations were lower than the INPC in this period, while the remaining 18.0% of the agreements had a difference equal to inflation.

Although the industry and trade data were very positive, the services He failed to record such good results for the workers of the country. However, industry data remains positive for employees.

In short, 57.6% of adjustments were above inflation, meaning that more than half of service workers saw their purchasing power increase in the first month of this year.

On the other hand, 18.2% of the negotiations were lower than the INPC and did not represent a real win-win for the service worker. Thus, 24.2% of the remaining agreements were equivalent to INPC and did not result in real gains for employees in the sector.

See minimum salary in Brazilian regions

In addition, Dieese also revealed the national average of the Brazilian regions. All data released by Dieese is from the General Register of Employed and Unemployed Persons (Caged), of the Ministry of Labor and Social Security.

See below the average salary ranges in each Brazilian region:

  • south: 1,440.84 Brazilian reals
  • southeast: 1,440.40 Brazilian reals
  • north: 1380.19 Brazilian reals
  • Midwest: 1,377.60 Brazilian reals
  • the Northeast: 1348.74 Brazilian reals

According to Deiss, salary adjustments were very similar between Brazilian regions in January this year. Incidentally, the Midwest had the highest rate of conventions over the INPC (89.3%), followed by the Northeast (78.5%), Southeast (73.4%), North (72.7%) and South (72.1%).

On the other hand, the North had the highest in the country in terms of inflation-adjusted losses in January. In the region, 13.6% of agreements and collective agreements reduced the purchasing power of workers in the first month of the year. It is followed by the Midwest (10.7%), the Southeast (10.4%), the Northeast (6.6%), and the South (3.5%).

The survey also revealed that the south has the highest percentage of agreements and collective agreements equal to the INPC (24.4%), i.e. also the purchasing power of the worker did not increase. Then came the Southeast (16.2%), the Northeast (14.9%) and the North (13.6%). There were no conventions like the INPC in the Midwest in January.