Increase the minimum wage in 2024 to R$1,412; Has the new value been confirmed?

The Brazilian minimum wage, a source of income for workers, pensioners, retirees and individuals receiving sickness benefits or continuous payment benefits (BPC), is expected to be revised by 7% for 2024. This means that the value could increase to R$ 1,412, which is a significant increase. Considering that in 2023, the value was R$1,320.

This forecast was made by economic analysts, taking into account the national index of consumer prices (INPC) accumulated in the past 12 months until November, as well as the real growth of the gross domestic product (GDP) in the past two years. As of November, the cumulative internal inflation rate was 3.85% and the 2022 GDP registered growth of 3%.

Will the minimum wage be lower than expected?

However, despite the expected increase, if confirmed, the new value would be less than the R$1,421 expected by the minimum wage hike policy, which provides for an adjustment above inflation. In the annual budget bill proposed by Lula’s government, the minimum wage was estimated at R$1,413, based on inflation expectations of 3.9%, which ultimately ended up not being confirmed.

What is the ideal minimum wage?

By calculating the value of the basic food basket in 17 Brazilian capitals, the Department of Statistics and Inter-Union Social and Economic Studies (Dieese) was able to estimate the value of the minimum wage to adequately cover families’ expenses in terms of food and housing. Health, education, clothing, hygiene, transportation, entertainment and luxury. In light of these calculations, the Foundation indicated that the minimum wage in November 2023 should be R$6,294.71, 4.4 times higher than the expected value for 2024.

Felipe Salto, chief economist at Warren Investimentos, also performed calculations and came to the conclusion that the value of the minimum wage for 2024 should be R$1,411.95, but was rounded off to R$1,412. Salto explains that this 7% increase, if confirmed, should have a financial impact on expenses associated with the minimum wage, which is estimated at up to R$35 billion annually.

In any case, Salto emphasizes that details of the new value will not be published until after the national wage figure for November is determined, which will allow final calculations to be made to determine the exact minimum wage for 2024. “The weight in our scenarios has already been priced into the new value,” the economist concludes. .