The reality of wages and workers’ struggle in Venezuela

Ricardo Vaz reports from a public conference held in Caracas by a number of social movements and trade union organisations.

The conference called on numerous trade union and pressure groups to participate (Aporrea)

By Ricardo Vaz, Venezuela Analysis

“Salaries in Venezuela have been pulverised” – this was the overarching message from a recent Caracas forum titled “The reality of wages and the workers’ struggle”. Organised by a number of leftist organizations and trade unions, the event was meant to be held in the auditorium at the headquarters of the state telecommunications company CANTV. But the night before the venue was cancelled, leaving the organisers scrambling to move participants to a new location.

Throughout the event, multiple speakers stressed how hyperinflation has eroded wages in Venezuela, drastically reducing Venezuelan workers’ purchasing power as prices continue to soar, with no apparent end in sight. This reality is common to workers both in public and private sectors. Some of the other points ubiquitously touched on were the need for stronger worker control over production, distribution and even price fixing, and the need to peg wages to inflation. A worrying trend that several speakers highlighted is a growing intolerance for dissent in state companies. Several speakers told stories, some of them personal, of union representatives being fired or criminalised for criticising management. A prominent example is the case of Elio Palacios, leading trade unionist of the state electricity company CORPOELEC who was arrested in February for warning of impending nationwide outages due to company management just weeks before numerous western Venezuelan states were hit with massive rolling blackouts. Palacios was later released due to popular pressure from trade unions and leftist parties.

Venezuela has been mired in a severe economic crisis over the past several years. The steep fall of global oil prices, from an average of $80 a barrel to under $40 in 2016, dealt a severe blow to Venezuela’s import-based economy, with petroleum accounting for over 90% of the country’s export income. The sharp decline in imports, coupled with government mismanagement as well as private sector hoarding and speculation, has led to shortages. The government has implemented regular wage increases, a large part of them through food supplements known as cestatickets, but these have been “eaten up” by inflation. Since late last year, it has also started delivering cash bonuses through the Homeland Card system (Carnet de la Patria), the last of which was of 1 million Bolivars, around $2 at the ever-rising black market rate and distributed on occasion of Venezuela’s independence day, April 19.

Wages and bonuses

Leander Pérez, from Lucha de Clases, a group affiliated with International Marxist Tendency, expressed critiques regarding the recent policy of Homeland Card bonuses as well as the supplementing of wages with cestatickets, which now comprise the majority proportion of worker salaries.

“The bonuses are an admission from the government that it is impossible to live on the minimum wage,” Pérez stressed, adding that by doing this the government is assuming a responsibility that should belong to employers. Moreover, bonuses reduce the value of labour, since social security payments, or severance fees, are based only on the actual salary.

Pérez also pointed out that so far the bonuses have worked in an ad-hoc fashion, with no regulating state body. Another issue is that if bonuses become larger than wages, and transportation costs keep on rising, there will be less of an incentive for people to go to work. Pérez argued that while mechanisms to protect the working class are welcome, a strong response against the economic war is what is really missing.

Stark numbers

“This is the biggest crisis in Venezuelan history” – this was the opening statement of Manuel Sutherland. A Marxist economist by training, he is the coordinator of the Centre for Worker Research and Training (CIFO), a political organisation dedicated to providing information that can allow the working class to understand their struggle.

Sutherland’s intervention focused on numbers that exemplify the current economic crisis. To name a few, GDP has shrunk by 50% after five successive years of recession, inflation between April 2017 and April 2018 was 8.200%, and purchasing power decreased by 75% in the same period. Oil production is also down to less than 1.5 million barrels per day, meaning that Venezuela is not taking advantage of the rise in oil prices, which have topped 56 dollars per barrel for Venezuela’s extra-heavy crude. State oil company PDVSA has suffered for years from a lack of investment, while it has also been increasingly targeted by US sanctions. Critics have also pointed at mismanagement and corruption, and a recent anti-corruption drive by attorney general Tarek William Saab has led to a series of high-profile arrests.

The government policy of “printing money”, that is, of giving bonuses, has no real backing and generates inflation, Sutherland said. Furthermore, money is not actually “printed”, since there is also a shortage of cash in circulation that keeps on worsening. The issue, according to him, is production, which is why trade unions have a tremendous challenge ahead of them.

What is to be done?

Inevitably, the discussion became more polemical when centred on the Maduro government and the upcoming elections on May 20. Members of Socialist Tide, a Trotskyist group that broke away from the ruling PSUV in 2015, mentioned the need to defend the wages and audit how state dollars have been granted for imports, but their assessment – namely that only the government is to blame and needs to be replaced – could easily be mistaken for mainstream opposition views.

Others hit back, calling for people to vote for Maduro on May 20, if nothing else because of what a return to power of the right-wing would entail. It was also highlighted, even by some who criticised the government’s policies, that the workers should not lose sight of who the class enemy is, nor of the overwhelming threat and presence of imperialism. What was clear for the around 120 participants in the forum was the need for the workers to fight for their rights and to defend (or revitalise, depending on the perspective) the Bolivarian Revolution.